WIREDGOV

Private sector growth picked up in the three months to April, according to the latest CBI Growth Indicator.

The survey of 764 respondents across the manufacturing, distribution and service sectors showed the pace of growth improved after falling to its slowest rate since May 2013. A balance of +10% of firms reported a rise in output in the quarter to April, compared with +2% in March.

Steady manufacturing output, together with a rebound in consumer services, were the main drivers of the pick-up in overall performance. Business and professional services also saw growth edge higher, but retailers reported an unexpected dip in sales volumes over the period.

Expectations for continued output growth over the next three months remain healthy, moderating slightly to +15% from +19%, but remaining above the long-run average.

Rain Newton-Smith, CBI Director of Economics, said:

“There are signs that the economy is picking up as we put the tough start to the year behind us. Manufacturing is stabilising, the services sector is performing well, and it’s good to see solid expectations for further growth.

“We expect to see a bit more wind in the sails of the economy in the coming months, as low oil prices and a healthy labour market continue to support incomes and spending. The recent fall in the pound has already taken some of the pressure of manufacturers, and should spur export growth.

“But global risks to UK growth remain in the path as our course steadies. The possibility of more volatility in financial markets, concerns about debt positions in China, and uncertainty ahead of the EU referendum could impact on activity.”