Private sector activity has fallen for five consecutive rolling quarters – CBI Growth Indicator

Private sector activity continued to fall in the three months to December (balance of -13%), at a slightly faster pace than in the previous month (-7%) - according to the CBI’s latest Growth Indicator. Private sector activity has now fallen for five consecutive rolling quarters.

The faster fall in December was largely due to an accelerated decline in consumer services volumes (-54% from -32% in November), and manufacturing output falling slightly (-9%) after a brief return to growth in November (+18%).

Distribution sales saw a slower decline (-12% from -23% in November) and business and professional services remained stagnant (-1%) for the second successive survey. 

Private sector activity is expected to fall at a faster pace in the next three months (-22%), due to quicker declines in business and professional services (-17%) and distribution (-30%).

 A somewhat slower fall is expected in consumer services (-40%), though this would still mark a heavy decline in volumes. Manufacturing output is expected to continue falling modestly (-10%).

Martin Sartorius, Principal Economist at the CBI, said: “The decline in private sector activity over December extends a downward trend that looks set to deepen going into 2023. 

“Businesses continue to face a number of headwinds, with rising costs, labour shortages, and weakening demand contributing to a gloomy outlook for next year. 

“It is essential that the Government supports firms with their growth ambitions through this tough economic climate. Businesses are looking for concrete plans to support investment and put the UK on a road to a sustainable growth economy.”