The manufacturing sector continued to be battered by the recession but the service sector has shown some grounds for optimism, according to a new report from the British Chamber of Commerce (BCC).

The report shows that manufacturing’s employment balance fell 19 points in Q1, to -36%, the lowest for 20 years. The sector’s employment expectations balance improved 6 points, to -35%, but is still very weak by historical standards, while sector’s Q1 confidence plunged to new record lows. The turnover confidence balance dropped 6 points to -38%, with profitability confidence dropping 9 points to -48%.

The service sector’s employment balance increased 4 points to -18%. The sector’s employment expectations balance rose 12 points to -12%. Confidence balances also improved, but remained negative. Turnover confidence rose 11 points to -12% and service profitability confidence rose 11 points to -23%.