Private sector growth prospects freeze over this winter

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31 Oct 2023

Private sector activity continued to fall in the three months to October, according to the Confederation of British Industry's (CBI) latest Growth Indicator.

Services saw business volumes continue to fall, reflecting weaker activity in both business & professional services and consumer services. Distribution sales and manufacturing output also declined in the quarter to October.

Private sector activity is expected to remain flat at 0% over the next three months, according to the CBI.

Alpesh Paleja, CBI Lead Economist, said: 'October's Growth Indicator signalled another contraction in private sector activity, with businesses having long been stifled by high costs, staff shortages, and febrile demand conditions.

'Firms largely expect activity to remain in the doldrums going into next year, though it's encouraging that manufacturers are hopeful of a modest revival.

'Chronically weak activity underscores the scale of the challenge the Chancellor faces to break the UK's low-growth cycle. Bold action to mobilise the workforce, streamline planning processes, and make full expensing for investment permanent, is crucial to boosting UK productivity.

'Without a clear and convincing commitment to sustainable growth, the government's ambitions to bolster public services and improve living standards will likely go unrealised.'