Growth in the UK’s private sector picked up in the three months to February, exceeding expectations for modest growth, according to the latest CBI Growth Indicator.
The composite measure, based on 671 respondents across the distribution, manufacturing and service sectors, showed the balance of firms reporting a rise in output at +20%, up from +9% in the three months to January.
Growth strengthened across the board and was far above the long-run average in most sectors. Within distribution, however, retail volumes declined once again, although at a slower pace than in the previous month.
Looking ahead, the pace of growth is expected to edge higher over the three months to May (+24%), underpinned by a pick-up in retail and robust growth across all other sub-sectors.
During this year and next, the CBI expect conditions to remain challenging for consumer-facing companies and retailers, with higher inflation and weak wage growth squeezing household budgets. Meanwhile, manufacturers should continue to benefit from the lower level of Sterling and the improving global economic environment. Please see the CBI’s December 2017 economic forecast for further details.
Rain Newton-Smith, CBI Chief Economist, said:
“It’s good to see firm growth in the UK economy this month and expectations of growth into next quarter also look positive.
“However, both businesses and consumers continue to grapple with uncertainty over the economic outlook and Brexit, so the Government must help counter this by intensifying its focus on the domestic agenda, with industrial strategy leading the way to deliver higher productivity and living standards.”
Notes to Editors:
The CBI Growth Indicator is a composite of data on output, sales and business volumes drawn from three of the CBI’s long-running qualitative UK business surveys: the Industrial Trends Survey (ITS, covering manufacturing); the Distributive Trades Survey (DTS, covering retail, wholesale and motor trades); and the Service Sector Survey (SSS, covering business, professional and consumer services).
The Growth Indicator covers the volume of output for the ITS, volume of sales for the DTS and volume of business for the SSS for the past three months and next three months.
A ‘balance’ is the difference in percentage points between the weighted percentage of firms answering that output is “up” and the percentage answering “down” (for example, if 30% of firms say that output is up, 60% that it is unchanged, and 10% that it is down, the balance statistic is +20%).
Across the UK, the CBI speaks on behalf of 190,000 businesses of all sizes and sectors. The CBI’s corporate members together employ nearly 7 million people, about one third of private sector-employees. With offices in the UK as well as representation in Brussels, Washington, Beijing and Delhi, the CBI communicates the British business voice around the world.