Growth holds steady but at slower pace than expected

UK private sector growth momentum held broadly steady in the three months to September, according to the latest CBI Growth Indicator.

The composite measure based on 728 respondents across the distribution, manufacturing and service sectors showed the balance of firms reporting a rise in output at +11%, compared with +14% in the three months to August 2017.

Growth was mixed across sectors, with the pace of growth easing in manufacturing and business and professional services firms reporting growth fizzling out.

Growth in consumer services fell slightly in the three months to September, while distribution reported an acceleration in growth over the same period.

Private sector firms expect growth to pick up over the next three months (+18%).

Rain Newton-Smith, CBI chief economist, said: “Growth in the economy has held steady through the summer, although at a slightly slower pace than expected by many firms. While we saw growth in most sectors, consumer-facing businesses are having a tougher time of it as inflation tightens purse strings a little more.

“As we head to the Conservative party conference, businesses will want to know that the Government is not allowing the domestic agenda to be put on the back-burner.

“Firms want to see plans set out to raise productivity across the country, by delivering on a modern Industrial Strategy, raising spending on innovation and improving educational attainment.”