In the second quarter of 2015, the service sector continued its trend of steady progress, but manufacturing firms reported much weaker growth, the survey said.
It revealed that all the key manufacturing balances fell in Q2 2015 and most balances are now lower than their average 2007 pre-recession levels.
The intentions to raise prices balance rose markedly in manufacturing (+23% in Q2 2015, up from +11% in Q1 2015), but fell slightly in services (+20% in Q2 2015, down from +23% in Q1 2015).
The balance for pressures on capacity fell slightly in manufacturing (+34% in Q2 2015, down from +36% in Q1 2015) and was up slightly in services (+46% in Q2 2015, up from +43% in Q1 2015).
John Longworth (pictured), director general of the BCC, said the difference in results raised the prospect of the UK experiencing two-tier growth – with modest expansion in services and markedly slower growth in manufacturing and goods.
He added: "The manufacturing sector has battled against structural problems for years but, even in that context, the scale of the slowdown being experienced by our manufacturers is a surprise and a concern. Part of the reason might be down to the strength of sterling against the euro and the dollar. But currency fluctuations are not the only issues at stake.
"We have three structural problems that are also hurting our manufacturers and growth companies. First, chronic underinvestment, exasperated by lack of capital and lack of long-term incentive. Second, underinvestment in infrastructure and third, insufficient focus on helping more businesses succeed in new markets overseas. The Chancellor's Budget, the forthcoming spending review and the remainder of this Parliament should focus on tackling these issues for the long-term.
"If we are to secure long-term, sustainable, diversified growth, the government must tackle these structural problems, which act as a brake on our economy."
The BCC survey is based on almost 7,500 responses from firms, employing around 800,000 people.
