Private sector growth accelerates in the three months to March
Private sector activity grew at a slightly faster pace in the three months to March (+18% from +13% in February), according to the CBI’s latest Growth Indicator.
Activity within business & professional services grew at the quickest rate since the three months to November (+25% from +3% in February). Growth remained solid in the distribution sector (+27% from +24%) and the manufacturing sector (+27% from +26%). But activity fell across consumer services (-23% from +10%).
Looking ahead, private sector activity is expected to grow at an even faster rate in the next three months (+27%).
Within this, consumer services firms expect a strong return to growth (+35%), business & professional services firms (+27%) and manufacturers (+30%) expect a similarly firm rate of growth, while distribution firms expect sales growth to slow somewhat (+18%).
The CBI Growth Indicator is a composite measure of activity, based on responses to CBI surveys. In total, 454 firms responded between 24 February 2022 and 15 March 2022.
Alpesh Paleja, CBI lead economist, said: “While it’s encouraging that growth has picked up, these positive results may not yet fully reflect the headwinds facing business from the conflict in Ukraine. Companies are having to grapple with higher costs, continuing supply chain disruption, and are mindful of an intensifying cost of living crunch.
“While the Spring Statement moved to restore confidence with a welcome commitment to investment incentives, firms cannot wait until Autumn to get growth going.
“Businesses will also be keen for ministers to use the forthcoming Energy Strategy to outline plans now on how we get new nuclear, hydrogen and onshore wind investment – combining short-term measures to address higher energy costs with longer-term solutions”.