Private sector activity fell in the three months to September (balance of -19%, from -5% in August), according to the CBI’s latest Growth Indicator, and businesses expect the decline to accelerate over the next quarter.
The fall over the past quarter was the fastest since February 2021 with activity declining across all sectors. Business volumes in both business & professional services (-14% from -1%) and consumer services (-57% from -37%) fell at a faster rate than in the quarter to August.
Meanwhile, distribution sales fell after having grown slightly in the quarter to August (-13% from 7%), and manufacturing output fell at a similar pace as last month (-4% from -7%).
Looking ahead to the next three months, private sector activity as a whole is expected to decline at an even quicker pace (-30% from -19%). Prospects have deteriorated across all sectors: services activity (-30% from -25%), manufacturing output (-17% from -4%), and distribution volumes (-44% from -13%) are all expected to decline at a faster rate in the next three months.
Alpesh Paleja, CBI lead economist, said: “Across the private sector, firms have had to contend with significant uncertainty surrounding energy costs as well as ongoing supply chain challenges and weaker consumer demand.
“While there are fears that economic activity may fall even quicker still next quarter, the Government has only [last] week made some significant moves to shield all businesses from high energy costs, while also setting out its plans to kickstart economic growth.
“These bold plays will help in building up fragile business confidence and get firms on the front foot once more.”
