UK private-sector growth was steady in the three months to October, according to the latest CBI Growth Indicator (based on responses from the manufacturing, distribution, and service sectors); this showed a 10% rise in output — the same as in the three-month period to September.
The CBI says that while private-sector activity is expected to continue to grow at a similar pace over the three months to January (due to a ‘solid expansion’ in services), growth in retail is expected to weaken, while manufacturing growth “is set to stall due to a weakness in new orders”.
CBI chief economist Rain Newton-Smith (pictured) said: “Growth has settled down on a more subdued path after the summer boost,
with momentum maintained across most sectors; and although steady growth is expected next quarter, there are signs of weakness emerging within distribution and manufacturing.
“To help businesses invest more in buildings, skills and new technologies, firms will welcome the Chancellor’s action through the improved Annual Investment Allowance and changes to the Apprenticeship Levy.”
Commenting on the Budget, Ms Fairbairn said: “This was a rock-solid Budget that recognises the enormous contribution enterprise has made to balancing the UK’s books through jobs, pay and tax, and it responds to many of the recommendations that firms have made; but while the Chancellor has reduced some of the biggest barriers to growth, he has missed some opportunities.”
However, she added: “On-going reform of the apprenticeship levy and collaboration with business on retraining reflects long-standing business advice and will help individuals adapt to a fast-changing world of work.”
On investment proposals, she said: “The Chancellor has come up trumps with a package to spur firms to invest more in their factories and machinery, with the improved Annual Investment Allowance and incentives for spending on buildings.”
With regard to a digital services tax, she said: “The picture on tax is more mixed. Going it alone on a digital services tax is high risk. The Government should move in step internationally, leading multilateral solutions, or risk losing our global competitive edge in digital.
“All businesses should be at the cutting edge of digital technology. If the UK is to break ranks with the international community, any new approach must be carefully built on evidence from a wide range of enterprises of all sizes.
“With regard to business rates, smaller businesses will be relieved by the support on business rates at a time where the current system is crippling many High Streets.
“However, larger retailers and manufactures — and the millions they employ across the UK — will continue to suffer needlessly until there is a full in-depth review.”