UK private sector growth was “broadly steady” in May despite “clear signs” that businesses are concerned about the EU referendum and a slowdown in global growth, a report said.
The pace of output growth was about the same as the previous month, with plus 11% of companies reporting a rise in May compared with plus 10% in April, according to the Confederation of British Industry’s (CBI) Growth Indicator.
The study, which questions 785 firms across the manufacturing, distribution and service sectors, said businesses expecting to see growth within the next three months hit plus 13%, but came in well below the average of plus 26% for the past three years.
It added that UK manufacturers saw a rise in output, while the services sector recorded a rise in business volumes and retailers were hit by falling sales in the three months to May.
Rain Newton-Smith, CBI director of economics, said: “While underlying conditions for the UK economy are looking pretty stable, the risks are clear as day with uncertainty still brewing over the global outlook and the EU vote around the corner.
“Expectations for growth have slipped and are well below the levels of the last few years, with uncertainty swirling around the pace of output and the impact from risks on the horizon.
“Manufacturers and consumer services are faring better with a modest growth in output, but our retailers have seen a quieter time in the quarter to May.”
It comes after a separate study by the CBI, published on Wednesday last week, revealed that concerns over the European referendum had dealt a blow to optimism in the services sector.
The Service Sector Survey found that firms were more cautious about the business climate than at any other point in the last three years.
Its findings revealed that 27% of companies in business and professional services were less optimistic in the three months to May, while 22% were more optimistic, leaving a balance of minus 5% - its lowest result since August 2012.