CBI Confederation of British Industry : Economic Update 4 December 2014
4 December 2014
| CBI Updates Team
Our regular roundup of the key economic indicators
November's Purchasing Managers' Indices (PMIs) signalled that the pace of growth in UK activity remains strong, but is likely to cool modestly going into the final quarter of the year. Overall, this is consistent with the CBI's November economic forecast, which assumes a slight moderation in GDP growth from 0.7% in the third quarter to a still-healthy pace of 0.6% in Q4.
The service sector led the way, with growth strengthening in November (a reading of 58.6, up from 56.2 in October), offsetting slowing growth in the construction sector (59.4). While the slowdown in the manufacturing sector has halted, growth in the sector nonetheless remains weak (53.5, up slightly from October's 53.3).
Also echoing this is the CBI's latest Growth Indicator, which shows the UK economy maintaining a healthy trajectory, with the rate of growth broadly stable in the three months to November. The resulting overall balance of +20% is little changed from October's survey balance of +19%. However, expectations for growth are not as strong as earlier in the year but are well above their long-run average.
Meanwhile, official data showed that UK GDP growth was unrevised at 0.7% in the third quarter of 2014. The breakdown of expenditure components showed that consumer spending was the key driver of growth, rising at the fastest pace since early 2010. The fall in business investment looks concerning, but more likely than not reflects a correction after the previous quarter's stellar growth rate. Indeed, our business surveys show that investment intentions for the year ahead - while softer than earlier in the year - remain robust. While the recovery has been more balanced domestically, the data indicates little rebalancing on trade, which provided a sizeable drag on growth in Q3.
For more information please contact email@example.com