Private sector activity levels dip in the wake of Brexit
THE UK private sector saw only mild growth in the three months to September as the economy struggled to react to the shock of the vote to leave the Single Market.
However, the latest CBI Growth Indicator predicts that the downturn my only be a bump in the road, with firms expecting the pace of growth to pick-up during the final quarter.
The study shows output growth across the manufacturing, distribution and service sectors was low but still in positive territory (+3%). However, this was a marked slowdown on last month (+8%).
Growth continued at a similarly healthy pace to last month in manufacturing and distribution, but there was a small fall in business volumes in the services sectors. The survey of 778 respondents showed that over the next three months, firms anticipate strong private sector growth (+22%) underpinned by a rise in expectations across manufacturing, distribution and service sectors.
The survey will occupy the thoughts of many at today’s session of the Conservative Party Conference in Birmingham, where the focus will be on the economy.
Rain Newton-Smith, CBI Chief Economist, said: “While the economy has seen slight growth this month, firms are confident that autumn will bring a surge in activity.
“Exporters continue to reap the benefits of a weaker sterling, but our services sector has not only felt a rise in uncertainty over demand, but also a drop in their sales volumes.
“With businesses keen to build momentum for the rest of the year and into 2017, they want the Government to outline clear plans for negotiations to leave the EU and deliver an Autumn Statement that will drive investment and deliver economic growth and prosperity.”
