Private‑Sector Forecast: A Little Bit of Anticipated Slump
The CBI Growth Indicator predicts a modest dip of about -15% in private‑sector activity across the three months leading up to November. That’s a continuation of the negative tone that started last year.
Who’s Feeling the Chill?
- Services: Down by -15%, led by a rough haul in business & professional services (-13%) and an even steeper slide in consumer services (-22%).
- Distribution sales: Expect a contraction of -19%.
- Manufacturing output: Forecast to shrink by -13%.
While the outlook remains shaky, it isn’t as bad as the first half of the year. Earlier in August, activity fell sharply by -26% across all sub‑sectors.
Voices from the Front Lines
Alpesh Paleja, CBI’s Deputy Chief Economist, summed it up: “The private‑sector mood stays muted. Businesses are still wrestling with weak demand, soaring labour costs, rising uncertainty, and tighter margins. Yet, expectations haven’t plunged as far as they did a few months back – a silver lining in a dim forecast.”
He added, “There’s no clear sign of a major turnaround yet. Companies are moving towards resilience and efficiency, which means less investment in capital and shorter‑term growth goals.”
What the Government Needs to Keep Heads Above Water
“Firms are already bearing the brunt of fiscal policies. Any further tax hikes from the Autumn Budget could tip the scales against growth. To spark real expansion, governments should reduce business costs, provide tax certainty, offer more flexibility on the Growth and Skills Levy, and rethink the Employment Rights Bill.”
