Output growth across the manufacturing, distribution and service sectors rose steadily over the summer despite fears about the Brexit vote, according to figures from the Confederation of British Industry (CBI).
Private sector activity rose +8% in the three months to August, up from +5% in the three months to July. Volumes grew at a more moderate pace in consumer services and held steady among professional services firms, while sales stabilised in the retail sector after four months of decline.
The CBI’s survey of 833 firms shows that businesses remain reasonably optimistic about the near term: over the next three months, firms expect private sector growth to see a rise of +7% – a higher figure than in July.
Rain Newton-Smith, Chief Economist at the CBI, said: ‘While it’s still early days following the EU vote, the economy is continuing to grow at a steady pace, despite mixed performances across different sectors.
‘Exporters are seeing some competitiveness benefits from the fall in sterling and low interest rates are helping to fuel some consumer-focussed parts of the economy. But the flip side of the weaker pound is higher import prices, which will put upward pressure on inflation and erode household spending power going forward.
‘Business optimism and investment plans have deteriorated in the wake of Brexit, so as the summer draws to a close, firms want the Government to communicate its plans for negotiations to leave the EU.
‘At the same time, they want to see a robust Autumn Statement to set the economy on the right path to deliver growth and prosperity.’