WIREDGOV

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

The survey of 672 respondents across the manufacturing, distribution and service sectors showed that growth rose to a balance of +18% - the highest since December 2015 – climbing from the balance of +11% in the three months to March.

The uptick was largely driven by an acceleration in the business & professional services and distribution sectors – the latter driven by wholesaling and motor trades. Manufacturing output continued to rise firmly, but growth in the retail sector and consumer services remained lacklustre in the three months to April.

Looking ahead, firms expect the pace of growth to hold broadly steady (+20%) over the next quarter.

Rain Newton-Smith, CBI Chief Economist, said:

“It’s good to still see momentum in the economy according to our surveys, but while firms expect to see steady growth over the next three months, the headwinds countering this are also picking up strength.

“Rising inflation has taken the edge off real household incomes over the last few months. And with inflation set to rise further still, real earnings are likely to take a greater hit, which will put a larger dent in households’ spending power.

“Taking concerted action to tackle the productivity puzzle is vital if we are to boost living standards, particularly ironing out regional differences. Investing in a modern Industrial Strategy will catalyse innovation and skills development, which will enable the British economy to thrive.”