Private sector activity continues to grow at above average pace in quarter to October - CBI Growth Indicator

Private sector activity grew at a similarly firm pace in the quarter to October as the previous month (balance of +29% from +27%). Activity has now been growing at an above average pace for six consecutive surveys, according to the CBI’s latest Growth Indicator.

The composite measure is based on responses to CBI surveys from 524 firms between 24 September and 14 October.

Growth remained broad-based, with business and professional services activity still growing strongly, albeit at a slightly slower pace compared with last month (+34% from +39%).

Consumer services growth accelerated (+24% from +6%), while both manufacturing output (+15% from +16%) and distribution sales (+32% from +29%) grew at broadly similar rates to last month.

Looking ahead, private sector activity is expected to grow at a similar pace once again in the next three months (+27%). Growth is expected to ease in business and professional services (+27%) and consumer services (+7%), offset by expectations of improved manufacturing (+33) and distribution (36%) growth.

Alpesh Paleja, CBI Lead Economist, said:

“Given the headwinds business has faced, achieving above average growth for the past six months shows real resilience in the UK economy.

“By business and government continuing to work together – to unblock supply disruption and unlock investment – the UK can realise the high productivity, high skill, high wage economy that everyone wants.

“The Chancellor made some important strides towards this in the Budget, by making business rates more bearable in the short term and introducing skills bootcamps.

“Sticking to R&D targets will be vital for crowding in investment that the UK sorely needs if we’re to compete globally, especially on decarbonisation opportunities.

“As thoughts turn to COP26, it’s essential that action follows ambition, on net zero and the skills needed to deliver it. This will be fundamental for levelling up communities across the UK.”