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

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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,

 link source - East Midlands Business Link General

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