Businesses expect growth as activity reaches 2 year high, CBI survey
Businesses are looking forward to growth in the coming months, as activity across the private sector showed its strongest performance in nearly two years.
According to the Confederation of British Industry's composite growth indicator, private sector activity stabilised with 2% growth in the three months leading up to May, compared to 14% growth between January and March. This increase in activity is mainly due to the services sector stabilizing, which saw only a 1% fall in May after a much sharper 21% decline in April.
While businesses have been cautious about growth prospects, bosses are still optimistic about future expansion in a sign that things are "heading in the right direction", the CBI said.
Alpesh Paleja, lead economist at the CBI said: "The expectation for growth remain positive should give further reassurance that things are heading in the right direction, alongside our survey data showing hiring intentions are holding up."
"But the recovery remains in its early stages, and firms in some sectors – particularly consumer-facing ones – continue to struggle."
Firms across various sectors are preparing for modest but widespread growth, with expected increases in activity in distribution, manufacturing and services.
Stephen Paterson, Chief for Technology and People at AND Digital, commented: "It is encouraging to see green shoots in the business economy as confidence is beginning to return among CEOs. The past couple of years have challenged businesses with a turbulent economy but now we are on our way out the other side, leaders can focus on growth and expansion once again."
"To ensure growth, CEOs feel they need to be ahead of the curve when it comes to data and technology, which is why 78% have signed up for digital training this year, according to our CEO Digital Divide research. Having CEOs lead from the top when it comes to tech innovation and skills galvanises the workforce and promotes a culture of ingenuity and productivity which is key to maximising developing technologies such as AI. Armed with new digital skills and knowledge, CEOs can drive unprecedented efficiency for their businesses and position themselves to grow as the business economy continues to pick up."
