Growth slows but outlook remains bright
Economic growth slowed in the three months to August, but expectations for the next quarter remain strong, according to the latest CBI growth indicator.
Read the CBI's Growth Indicator Survey here
The survey of 771 respondents across manufacturing, retail and services showed continued growth in the private sector, with a balance of +21% in August. Whilst the pace of growth slowed to a five-month low (down from +29% in July), it remained well above average.
Sales volumes in the retail sector grew strongly, but growth eased in the manufacturing, and business and professional services sectors.
The outlook for the next three months is particularly robust, with expectations for growth (+38%), only marginally below the record high (since 2003) set in April (+42%).
Rain Newton-Smith, CBI Director of Economics, said:
"There are a few early signs that momentum in the economy may ease slightly in the second half of the year.
"However, growth is set to remain robust, and there are positive signs that the recovery is continuing along the right track.
"Alongside the strong showing from the retail sector, it’s encouraging that firms feel particularly upbeat about growth prospects as we head into the autumn.
"Businesses will continue to keep a weather eye on developments overseas, as subdued prospects in the Eurozone and international political uncertainty make the global economic environment that bit more challenging."
Notes to Editors:
The CBI composite survey indicator, first published in January 2014, brings together CBI surveys of economic activity into an aggregate index. The indicator includes survey results for output volumes as reported on a monthly basis for the manufacturing, distribution, consumer, business & professional services sectors. It offers an early perspective on the pace of economic growth and covers around 75% of the private sector economy.
The indicator results are reported in a similar way to other CBI surveys and uses the ‘balance’ statistic — the difference between the percentage of respondents replying ‘up’ minus the percentage replying ‘down’. The ‘balance’ provides a simplified method of interpreting the results and over a period of time, the trend in the balance gives a good indication of the trend in the economic indicator.
The CBI Growth Indicator for August 2014 is a composite of the following monthly economic data:
· Industrial Trends Survey
· Distributive Trades Survey
· Service Sector Survey.