Growth remains strong but eases from recent highs
Private sector growth continued to perform strongly in the three months to September, with expectations for a mild pick up in the next quarter, according to the CBI’s Growth Indicator.
The survey of 817 respondents showed growth ticked upwards. A firmer performance in business and professional services, and manufacturing, was balanced by slower growth in the retail and motor trades sectors, to give a survey balance of +23%. Although this is below the record high seen in May (+35%), it remains well above the long-run average.
The outlook for the next three months remains robust, with a modest increase in growth anticipated (+27%). However, expectations have eased from last month’s near record high (+38%) and from the generally stronger predictions seen over the course of the year.
Looking at the CBI’s Growth Indicator for the third quarter as a whole, economic growth has slowed slightly over the period, but nonetheless remains strong.
Rain Newton-Smith, CBI Director of Economics, said:
“While optimism in the private sector may have lost a little of the spring in its step, this is in line with our forecast for a slight easing in the second half of the year.
“Growth remains robust though, and the recovery is progressing along the right path.
“However, companies will continue to monitor the fast moving international situation. Subdued activity in the Eurozone, together with increased geopolitical risks from tensions in the Middle East and Ukraine, make global economic waters more challenging to navigate.”