WIREDGOV

Private sector growth slowed slightly in the three months to March, according to the CBI’s latest Growth Indicator.

The survey of 714 respondents across the manufacturing, distribution and service sectors showed the pace of output growth easing to a balance of +11%, from +15% in the three months to February.

While manufacturing output growth expanded strongly in the three months to March, growth in consumer services and retail slowed and activity among business and professional services firms was unchanged for a second month.

However, firms’ expect growth to pick up (+25%) over the next quarter, with the survey balance the strongest since September 2015.

Rain Newton-Smith, CBI Chief Economist, said:

“Momentum eased towards the end of the first quarter, particularly among consumer service and retail companies. However, expectations for the quarter ahead are healthy across all sectors.

“But headwinds are strengthening, as higher inflation drives up costs for businesses and eats into household incomes, particularly against the backdrop of subdued wage growth.

“Businesses are committed to playing their part in addressing regional differences in productivity across the UK, which is the only sustainable route to higher pay and increased living standards across the UK’s regions and nations.

“To go on creating prosperity, business leaders will need to see positive progress in the EU negotiations and clarity on what a future deal looks like.”