Strong growth in private sector activity continues into three months to November
Private sector activity grew at a similarly strong pace in the quarter to November as the previous month (balance of +32% from +29%). Activity has now been growing at an above average pace for seven consecutive surveys, according to the CBI’s latest Growth Indicator.
The composite measure is based on responses to CBI surveys from 551 firms between 26 October and 16 November.
Growth remained broad-based and above average across all subsectors. Growth accelerated in consumer services (+28% from +24%) and business & professional services (+40% from +34%), with the latter seeing the fastest rise in activity seen since May.
Distribution volumes (+32% from +32%) and manufacturing output (+17% from +15%) grew at broadly similar rates to the previous month.
Looking ahead, growth in private sector activity is expected to continue at a firm pace, albeit easing in the coming quarter, taking expectations for growth to their lowest since March (+24%). However, expectations nonetheless remain above the long-run average.
Quicker growth in distribution volumes (+42%) and manufacturing output (+32%) are expected to be more than offset by growth in consumer services coming to a halt (+2) and slower growth across business and professional services (+21%).
Alpesh Paleja, CBI lead economist, said: “Given challenges across supply chains and rising cost pressures, the resilience shown by the private sector across the past seven months has been encouraging.
“Our surveys were conducted before concern over the Omicron variant grew, so any impact on activity and confidence will need to be watched closely. Some turbulence had been expected anyway in the three months to December, with consumer services diverging from other sectors.
“Looking further ahead, we should build on the economy’s resilience as we head into next year and focus on delivering the high wage, high skill, high growth economy we all want for the country.”