The private sector has experienced a year of decline in the face of persisting economic challenges, according to the latest growth indicator from the Confederation of British Industry (CBI).
The three months leading up to December saw a marginal decrease in private sector activity, with a weighted balance of -8% - a slight improvement from the -11% reported in the three months to November.
This decline marks an enduring trend, extending over one-and-a-half years without growth, and businesses anticipate this trend to persist in the new year with a forecasted decline of -6%.
The services sector witnessed a modest contraction, particularly in business and professional services (-10%), while consumer services remained unchanged. Distribution sales, however, saw a notable decline of -16%, signalling significant ongoing challenges.
Manufacturing emerged as the sole sector to avoid a downturn during this period, with output stabilising at 0% - a significant improvement from the -17% reported in November after four consecutive quarters of contraction.
Alpesh Paleja, CBI lead economist, said:
"December's growth indicator rounds off one-and-half years of either stagnation or falling activity in the private sector. While households and businesses have shown remarkable resilience in the face of strong headwinds, our surveys do not paint a picture of an economy that is thriving or growing sustainably.
"The Government must press ahead with a wider programme of measures around innovation, skills and decarbonisation that provide the foundations for sustainable economic growth."
Talk to us about your business.
