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CBI - Private sector activity unlikely to see growth through year's end - CBI Growth Indicator

Private sector activity fell slightly in the three months to September, according to the CBI’s latest Growth Indicator. This month’s contraction matched the pace of decline seen last month and extended the mild downturn seen over the last year.

Services reported another fall in business volumes in September (-9%), reflecting mild contractions across both business & professional services (-9%) and consumer services (-7%). Manufacturing also saw output decline in the quarter to September (-10%), while distribution sales were broadly unchanged (-3%).

Despite services activity falling over the last three rolling quarters, employment in the sector looks set to grow moderately over the next three months, driven by the strongest hiring intentions in business & professional services since July 2022. Meanwhile, selling price growth expectations eased to the greatest extent in over two years. Consumer services firms anticipate slightly faster price growth than in business & professional services.

Looking ahead, private sector activity is expected to remain stable over the next three months. Activity in both services (+1%) and manufacturing (0%) looks set to remain broadly unchanged. This is expected to offset another contraction in distribution (-10%).

Alpesh Paleja, CBI Lead Economist, said:    

“September’s Growth Indicator continues to highlight broad-based weakness in private sector activity, as tighter financial conditions, persistent skills shortages, high costs, and an uncertain outlook weigh on growth.   Although the private sector is expected to narrowly avoid a contraction in the fourth quarter of 2023, it’s concerning that no sector anticipates meaningful growth.

The upcoming Autumn Statement provides an urgently-needed opportunity to lay the groundwork for sustainable growth and renew the Government’s vision for the UK as an internationally competitive destination for investment. As outlined in the CBI’s Autumn Statement submission, bold action is necessary to give firms the confidence to invest in and expand our economy’s productive capacity.”

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Original article link: https://www.cbi.org.uk/media-centre/articles/private-sector-activity-unlikely-to-see-growth-through-years-end-cbi-growth-indicator/

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