Growth across the UK private sector remained steady at 9% over the past three months until November, according to the latest growth indicator survey by the Confederation of British Industries (CBI).
While growth was marginally better than the 8% expansion seen in the three months to October, it was mixed across sectors. The survey of 715 respondents showed that performance in the UK's manufacturing sector was slow, while growth in business and professional services in the country remained flat. However, on the upside, consumer-facing sectors witnessed good growth amid a pick up in the consumer services and retail business.
While growth since the Brexit vote had been better-than-expected, CBI said it would slow down significantly going forward. Annual growth in 2017 was pegged at 1.3% – downgraded from its May forecast of 2%.
It attributed the downgrade to cost pressures increasing for businesses, which was amid the weakness in the sterling that was driving up import costs. It added that while capital investment intentions for the year had stabilised after a sharp decline following the Brexit vote, it was still below pre-Brexit highs.
With regards to future growth expectations, the survey report said that businesses were on average expecting a higher growth rate of 11% in the next three months. While the manufacturing sector expects production to rise firmly over the coming quarter, consumer retail and wholesale sector could witness the same rate of sales growth. However, on the downside, business and professional services firms said they expected growth to decline in the next quarter.
Commenting on the survey, Rain Newton-Smith, CBI chief economist said: "It's encouraging to see that growth in the private sector continues to perk up, and that steady growth is expected as we head into 2017.
"The High Street has had a good month, even before we see the impact of Black Friday and Christmas shopping, whilst our manufacturers and services sector are seeing subdued growth.
"Businesses will be pleased by the welcome measures in the Autumn Statement to unlock research and development spending, spur innovation and upgrade crucial infrastructure. By further prioritising spending, the Government can seize the opportunities to deliver growth and prosperity across the UK's regions and nations."