The services sector continued to recover in March but the manufacturing sector remains weak, according to the British Chamber of Commerce (BCC) Quarterly Economic Survey 2010.

The survey shows that the balance, which represents changes to the workforce over the previous quarter, dropped dramatically in the manufacturing sector (from +3% in Q4 2009 to -16% this quarter), equivalent to levels seen between the end of 2008 and beginning of 2009, at the height of the recession.

Conversely, in the services sector the balance switched from negative (-3%) to positive (+3%), the first time it has been in positive territory since Q3 2008, and the highest result since Q2 of that year.

Half of manufacturing firms tried to recruit in Q1 2010, down from 65% in Q4 2009, while the percentage of manufacturing firms experiencing recruitment difficulties was at its lowest since Q1 2009 (43%). Firms seemed to have the greatest difficult finding skilled manual/technical (28%) and professional/managerial staff (19%).

In the service sector, the proportion of firms trying to recruit was 53%, with two-thirds of those responding attempting to recruit full-time staff and 43% encountering difficulties recruiting.

On prospects of changes to the workforce, the manufacturing sector saw virtual stagnation, with a

balance of -2% (down from -1% in Q4 2009), marking the third quarter in a row that the balance has been

in negative territory, while the services sector saw a mild improvement of four percentage points to reach a balance of +8%, the highest recorded balance since the recession began in Q2 2008.