Private sector returns to growth as Brexit tensions lift
Expectations among private employers have improved ‘markedly’
Private sector activity is expected to grow at an above-average pace in the quarter to April as Brexit uncertainty begins to lift.
Each of the three major sectors will enjoy an uplift but the CBI says the government must act quickly to secure a deal with the EU.
The rise in confidence follows a fall in activity in the last three months, albeit as a slower pace than the preceding quarter (-16% from -20%).
The CBI’s latest monthly Growth Indicator shows that business volumes across the private sector have failed to register any growth for over a year as the country suffered the impact of Brexit uncertainty.
Looking ahead, however, expectations for the coming quarter have improved markedly.
GDP is forecast to grow by 1.2% in 2020 (after estimated growth of 1.3% in 2019), with a somewhat brighter outlook for 2021, when growth is forecast to pick up to 1.8%.
Rain Newton-Smith, CBI chief economist, said: “It’s great to see business confidence improve but it remains to be seen whether this will feed through to activity.
“While firms in many sectors are expecting a return to growth over the coming quarter, the tough times faced by retailers look set to continue.
“With the General Election delivering a stable majority and the Withdrawal Agreement now secured, the Government must work quickly to establish a future relationship with the EU that can deliver prosperity across the whole economy, as well as re-focussing its attention on important domestic priorities.”