The UK economy is improving but is stuttering out of recession, according to the British Chambers of Commerce Q4 2009 Economic Survey.

The results reveal that several key measures are still negative in both the manufacturing and service sectors. In manufacturing, home orders, employment expectations, and investment in plant and machinery remain in negative territory.

The survey suggests that the service sector did not perform as well as manufacturing in Q4 as service balances are negative for home sales and orders, employment, cash flow, and investment in plant and machinery.

David Kern, chief economist at the BCC, says: “With improvements in most key national indicators, the Q4 results support the view that we are on the brink of leaving recession. However, with a number of critical measures still in negative territory, the economy is struggling to enter the recovery phase.

“All the Q4 domestic indicators are disappointingly feeble, especially in the service sector. Negative balances for investment in plant and machinery highlight the risks to Britain’s productive potential if sharp falls in business capital spending are not reversed.”