Economic growth reaches record high in May, CBI survey reveals

Business activity and economic growth reached a record high in May, posting the highest reading since data began in 2003, according to the latest CBI growth indicator.

The survey undertaken by the CBI interviewed 726 business managers and directors across the manufacturing, retail and service sectors, and their answers point to a record high growth in business activity, with a balance of +35%, up from +25% in April.

Statistical figures suggest that the UK economy has continued to perform strongly going into the second quarter of 2014. Furthermore, the CBI forecasts that the rate of growth will remain firmly above average for the coming quarter as well, with a balance of +30 for expected output growth for the next three months.

Growth trends were visible across all economy sectors, but grew specifically in retail sales and business volumes for the business & professional and consumer services sectors in the three months to May, with manufacturing output continuing to grow at the same solid pace as the previous two months.

Katja Hall, CBI Deputy Director-General, commented on these findings: “The UK economy is performing strongly and this is thanks to rising business and consumer confidence, better credit conditions at home and improving global economic conditions.

“What’s encouraging is that growth is becoming more broad-based, with solid increases in business investment over the past year. This bodes well for the year ahead.

“But there are risks to the UK’s outlook from global developments, including the possibility that the situation in Ukraine and Russia could impact on global commodity prices. And with the Eurozone crisis still far from being fully resolved, the UK continues to be exposed to a prolonged period of subdued activity in the region.”