12 March 2015

  |  CBI Updates Team

Intelligence, Update

Economic Update 13 March 2015

The CBI’s growth indicator, a composite of its manufacturing, distribution and services surveys, reported that UK private-sector growth over the three months to February remained relatively robust, although easing slightly. The mild slowdown was due mainly to the retail sector, while growth picked up a little in the manufacturing sector.

Economic Update 13 March 2015

Markit’s Purchasing Managers Index (PMI) survey also pointed to continued firm growth in February. The composite index (which includes manufacturing and services) was stable at 56.7, up slightly from the 56.3 recorded in Q4 2014. The manufacturing index hit a seven-month high while the construction data also improved.

However, official data showed that British manufacturing got off to an underwhelming start in 2015, contracting by 0.5% in January. Overall production also fell, by 0.2%. Since that leaves manufacturing output 0.2% below its average level over Q4 2014, a substantial contribution to overall GDP growth from the sector in the first quarter is looking unlikely.

Survey indicators also show a slight slowing in the pace of growth in the United States. The ISM manufacturing index fell for a fourth-consecutive month in February, showing activity growth at a thirteen-month low. The non-manufacturing index has improved only slightly after hitting a six-month low in December.

Elsewhere, the Eurozone remains in technical deflation, with consumer prices having fallen 0.3% in the year to February. While a slight improvement from a 0.6% fall in the year to January, this was due mainly to a modest rebound in energy prices, with core inflation (excluding food & energy) stuck at January’s record low (since 1991) of just 0.6%.

For more information, contact mia.andersson@cbi.org.uk