Bumper growth in private sector activity continues
In the three months to July, private sector activity across the economy grew robustly once again, at the fastest pace since May 2015 – with a net balance of +33%, marking similar growth to last month (+32%). That’s according to the CBI’s latest monthly Growth Indicator.
However, some sectors saw growth ease a little. Distribution (+48% from +60%) and business & professional services activity (+34% from +38%) grew strongly, but at slower rates compared to last month. Consumer services activity stabilised (+3% from -34%) – marking the highest outturn since September 2019 – while manufacturing volumes grew at the same pace as last month, a joint survey-record (+37%; record since July 1975).
Looking ahead, growth is expected to remain similarly strong over the next three months (+34%). Manufacturers (+44%) and consumer services firms (+9%) expect a faster rate of growth, while distribution firms expect another slight easing (+44%) and business and professional services firms expect a similar pace of growth (+33%).
The composite measure featured responses from 533 firms between 24 June and 15 July.
Alpesh Paleja, CBI lead economist, said: “The economy has been motoring ahead since restrictions began to lift a few months ago. In particular, it is a welcome relief to see consumer services getting a chance to steady the ship as one of the last industries to open up properly. For some sectors, growth is inevitably starting to settle towards more “normal” rates, after the initial surge in recent months.
“We must not take our eye off the ball, though. The economic recovery remains at risk from a number of supply-side bottlenecks, most notably the pingdemic. Businesses in all sectors and parts of the country are reporting staff shortages due to self-isolation, significantly impacting their day-to-day operations.
“While a growing exemptions list might help, the best solution is to fast forward the move that allows those people who are double-jabbed to avoid self-isolation, if they are not infectious.”