Sunday, September 19, 2021

Private sector growth remains strong, but two-speed recovery a concern

In the three months to June, private sector activity across the economy grew at the fastest pace since May 2015 – with a balance of +32%, marking similar growth to last month (+30%). That’s according to the CBI’s latest monthly Growth Indicator.

Manufacturing and distribution activity grew at record rates (+37% and +60% respectively), while growth in business and professional services remained strong – although somewhat slower than the previous month (+38% from +50%).

Conversely, consumer services activity continued to fall, but at an even sharper pace (-34% from -19%).

Private sector growth is expected to cool slightly over the next three months (+28%), albeit remain strong, with growth in the manufacturing and distribution sectors set to slow (+33% and +40% respectively).

Business and professional services expect a similar pace of growth (+39%), while consumer services are set to see a slight easing in the pace of decline (-30%).

The composite measure featured responses from 590 firms between 25 May and 14 June.

Alpesh Paleja, CBI Lead Economist, said: “With much of the economy having now reopened, we’re seeing a boost in activity across the economy. With robust expectations for the months ahead, and real positivity in terms of vaccine uptake, CBI forecasts show that UK GDP is on course to return to pre-Covid levels by the end of the year.

“Where we need to remain vigilant is the emergence of a two-speed recovery. While sectors like manufacturing, distribution and business & professional services look well on the road to recovery, consumer services firms – particularly those in international travel, where the government must show more urgency to implement a truly risk-based system.

“And greater support is now needed for the travel industry to prevent the loss of skilled jobs, protecting the UK’s long-term global competitiveness.”

A message from the Editor:

Thank you for reading this story on our news site - please take a moment to read this important message:

As you know, our aim is to bring you, the reader, an editorially led news site and magazine but journalism costs money and we rely on advertising, print and digital revenues to help to support them.

With the Covid-19 pandemic having a major impact on our industry as a whole, the advertising revenues we normally receive, which helps us cover the cost of our journalists and this website, have been drastically affected.

As such we need your help. If you can support our news sites/magazines with either a small donation of even £1, or a subscription to our magazine, which costs just £33.60 per year, (inc p&P and mailed direct to your door) your generosity will help us weather the storm and continue in our quest to deliver quality journalism.

As a subscriber, you will have unlimited access to our web site and magazine. You'll also be offered VIP invitations to our events, preferential rates to all our awards and get access to exclusive newsletters and content.

Just click here to subscribe and in the meantime may I wish you the very best.

Latest news

Related news

By continuing to use the site, you agree to the use of cookies. more information

The cookie settings on this website are set to "allow cookies" to give you the best browsing experience possible. If you continue to use this website without changing your cookie settings or you click "Accept" below then you are consenting to this.