CBI Growth Indicator: The Private Sector’s Grim Forecast

According to the latest CBI Growth Indicator, private‑sector firms are bracing for another steep dip in activity over the next three months. The weighted balance of forecasts is a shocking -22% – a drop that’s holding steady since December, the lowest sentiment in more than two years.

What’s Behind the Downturn?

Services sector: -20% – The fallout’s coming from business & professional services slipping by -12%, and consumer services taking the hardest hit with a stinging -49% since September 2022.
Distribution sales: -30% – The good news? Even their decline is less bleak than when they were at the bottom in December.
Manufacturing output: -19% – A step up from last month’s -31%, but still gloomy.

Why the Pessimism Is So Persistent

In the last three months up to January, private‑sector activity crunches again at -23%, echoing the -21% slump that hit the same period in December. Since August 2022, the trend has been a flat‑or‑falling road trip with no sign of a fresh start.

In short, it’s a case of the private world looking at its reflection and saying, “We’re in a bit of a dry spell.” Fortunately, when you throw in a sprinkle of optimism and a dash of humor, you won’t have to take all of tomorrow’s news too seriously.

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What the Finance Chief Actually Said

After a bleak pre‑Christmas period, the day after New Year’s hasn’t sparked economic optimism.
Businesses are bracing for a steep drop in activity, still reeling from the latest budget moves.
Staff cuts and rising prices loom on the horizon, tightening the policy juggle even further.
Consumer caution and lagging demand combine to push companies into a “needs more breakfast” phase.

Getting the Economy Off Its Down Turn

There’s an urgent push to reignite the UK’s economic engine. Here’s the chancellor’s playbook:

Reform the business rates system – curb the cost curve for operating shops and offices.
Introduce a flexible Apprenticeship Levy – keep young talent in the workforce.
Support people staying at work by expanding employer occupational health benefits.

The Bottom Line

Gov‑factors and firms must lock hands and roll out a game plan to ignite confidence and get the economy humming again. With growth forecasts looking like a rainy weekend and low investment headroom, the flame is waiting to be rekindled.