Private sector activity flatlines - CBI Growth Indictator

The composite measure, based on 532 respondents across the distribution, manufacturing and service sectors, showed the balance of firms reporting growth as 0%, marking a sixth consecutive rolling quarter of flat or falling volumes.

Activity continued declining in business & professional services, balanced by a pick-up in growth in manufacturing and distribution. Within distribution, retail sales recovered after falling for five consecutive rolling quarters, possibly due to the Easter trading period.

Looking ahead, private sector activity is expected to pick up only slightly over the three months to July (+5%), reflecting a recovery in services volumes.

The CBI’s growth indicator suggests that underlying economic activity remains subdued, chiming with other business surveys. While GDP growth in Q1 is likely to see a temporary boost from stockpiling, our view of the outlook ahead remains unchanged. For more detail, see our last economic forecast.

Rain Newton-Smith, CBI Chief Economist, said:

“Underlying growth remains subdued, highlighting the need for the fog of uncertainty to be lifted so businesses can plan and invest with confidence, allowing the UK to tackle issues other than Brexit.

“As recent protests have highlighted, climate change requires urgent attention and global leadership. There are plenty more projects, from combating underperforming productivity to making our workforce match fit for the future, which are left unfinished while the current Brexit impasse continues.

“Getting growth going again needs a relentless focus on the UK’s domestic agenda and progression to the second stage of talks with the EU, our biggest trading partner. Time-wasting is not an option.”