Economic growth slowed in March to an eight-month low after hitting record levels in February, according to the latest CBI Growth Indicator.
Despite slowing down, growth remains strong and well above average, as the recovery in the UK economy continues to bed down.
All sectors contributed to the slowdown in output growth, although the majority was accounted for by the consumer services, business and professional services and retail sectors.
The outlook for the next quarter is bright however, with growth expected to accelerate again, driven by strength in the service sector.
The survey of 622 respondents across manufacturing, retail and services registered robust growth in output volumes, with a balance of +19%, down from a record +32% in February. Firms are optimistic about the outlook for output growth over the next quarter with the expectations balance at +36%.
Anna Leach, CBI Head of Economic Analysis, said:
“Although growth has slowed from record levels last month, it remains strong and firms are optimistic it will pick up again in the next quarter.
“As this year progresses, we expect further increases in business and consumer confidence. Productivity and earnings should also start to recover.
“However, global developments continue to pose a risk to UK growth, not least the risk of renewed problems in the Eurozone. And although our direct trade and financial links with the Ukraine and Russia are relatively small, the crisis could have potential implications for global commodity prices which may impact inflation in the UK.”