CBI Growth Indicator - August 2024

Private sector firms expect activity to rise modestly in the three months to November (weighted balance of +9%), according to the CBI’s latest Growth Indicator. Expectations for growth have remained positive throughout this year so far. 

Activity is anticipated to be driven by growth in services (+14%) as growth in business & professional services (+19%) is set to offset a small decline in consumer services activity (-4%). Manufacturing output is also expected to rise (+9%), though expectations for growth have softened compared to the last couple of months. Furthermore, distribution sales are expected to fall again (-4%), albeit at a much slower pace than declines seen in recent months.

Expectations for growth follow a decline in activity over the three months to August (-8%), though at a slower pace than in the three months to July (-14%). Activity remains weak, having been flat or falling for two years. The latest decline was broad-based across sectors, with distribution sales falling sharply, alongside a milder decline in manufacturing output. Services business volumes were unchanged over the quarter. 

Alpesh Paleja, CBI Interim Deputy Chief Economist, said:

“It’s encouraging that business’ expectations for growth remain positive, which suggests that the recent momentum in economic growth has been sustained into the second half of this year. But our surveys paint a very mixed picture across sectors – it’s notable that consumer-facing businesses are still struggling, and that momentum in manufacturing remains tepid at best.

“As Parliament returns from the summer break and ahead of the autumn Budget, firms will want to see policies which can help turn a mixed outlook into a far more positive outcome for all sectors for the rest of the year. Whether that’s reducing costs – for instance through long overdue business rates reform - or setting out a business tax roadmap to attract investment. All this can help to deliver the return to long-term sustainable growth that new government has promised, and firms across all sectors want to see.”