The struggling UK economy has bucked up slightly in past months but remains in the doldrums, a new survey shows.

The manufacturing and service sectors showed a modest improvement in the second quarter after a very bad first three months, according to the Quarterly Economic Survey by the British Chambers of Commerce.

But many areas of the economy are in a significantly worse state than last year and performance remains weak across almost all sectors, the survey of 5,720 BCC member companies showed.

BCC economic adviser David Kern said: "Disappointing and worrying is how we would describe these results,"

The troubled manufacturing sector, tussling with strong competition from the Far East and Central Europe and the impact of the strong pound against the euro, registered "a very modest improvement" in the second quarter.

But the upturn was weak, reversing only a small part of the marked worsening in the first quarter and remaining well below the levels recorded during most of 2002, the survey said.

Balances of employment and job expectations in the sector worsened, with actual employment levels falling from minus 5 per cent in the first quarter to minus 6 per cent in the second - the worst since the fourth quarter of 2001. Job expectations sank into negative territory, from 0 per cent to minus one per cent.

While the second quarter figures point to a shallow manufacturing recovery many threats persist, one of which is overseas competition, Mr Kern said.