The UK economy’s growth prospects for the next three months are “exceptionally strong”, according to the Confederation of British Industry (CBI).
According to the CBI’s latest data, output in April rose above March’s eight-month low and continues to be above average.
The survey of 675 firms in the retail, services and manufacturing sectors reveals that:
- growth expectations for the next quarter are the highest since the survey began, recording a balance of +42%
- businesses recorded solid growth in April with a balance of +25%
- this compares to the +19% recorded in March
- the retail and services sectors continued to strengthen
- output growth in manufacturing remained stable.
Katja Hall, chief policy director at the CBI, said:
“While consumer spending accounted for the lion’s share of GDP growth last year, there are firm indications of growth becoming more broad-based. It’s good to see that business investment has consistently contributed to quarterly growth since 2013.
“We expect growth to strengthen in 2014, underpinned partly by rising business and consumer confidence and supportive monetary conditions. Productivity and earnings are also expected to start recovering this year.”
Elsewhere, official data from the Office for National Statistics showed that retail sales volumes in March were 4.2% higher than the same month in 2013. The amount spent also grew by 3.9% on the year. Growth was driven mainly by non-food retailers, in particular clothing, footwear and household stores.
David Kern at the British Chambers of Commerce welcomed the figures but echoed Katja Hall’s comments that growth needs to be more broadly-based:
“While consumer spending must remain a crucial part of the economy, it is becoming increasingly important that the recovery becomes more balanced. Exports and investment must make a bigger contribution than they have done over the past year.”
