Economy  

Private sector growth picks up

Private sector growth picks up

The Confederation of British Industry’s latest Growth Indicator showed private sector growth improved in the three months to February.

The survey of 778 respondents across the manufacturing, distribution and service sectors showed growth in these areas rose to 15 per cent, climbing from 10 per cent in the three months to January.

The uptick was largely driven by a rebound in consumer services, which saw the fastest growth in business volumes since August 2015.

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Retail sales and manufacturing output also grew at solid pace but the business and professional services sector saw no change in volumes.

Rain Newton-Smith, the CBI’s chief economist, said: “The economy is growing solidly, with consumer-facing sectors leading the way for now. And it’s encouraging that firm growth is expected to continue over the next three months.

“However, with inflation set to rise even further, this will dampen households’ spending power, and growth is likely to slow as the year progresses.

“Rising costs will add to the pressures on businesses too, so they will be looking for a steady hand on the tiller at the Budget and action on the rising burden from business rates.”

Despite these warnings, companies across sectors expect to see growth of 17 per cent over the next quarter.

Ms Newton-Smith said the government should commit to invest in skills and innovation, through the industrial strategy.

damian.fantato@ft.com