Firms across the private sector expect activity to fall modestly
in the three months to November (weighted balance of -15%),
extending a run of negative predictions that began in late 2024,
according to the CBI's latest Growth Indicator.
The downturn is expected to be broad-based, with business volumes
in the services sector set to decline (-15%), driven by weak
expectations in business & professional services (-13%) and
consumer services (-22%). Distribution sales (-19%) and
manufacturing output are also set to contract (-13%).
Nonetheless, expectations across most sectors are less weak than
those seen in the first half of the year.
The fragile outlook comes as private sector activity fell in the
three months to August (-26%). All sub-sectors reported falling
activity.
Alpesh Paleja, CBI Deputy Chief Economist,
said:
“The outlook remains subdued across the private sector, as
businesses continue to grapple with sluggish demand, higher
employment costs, increasing uncertainty, and squeezed margins.
However, expectations for activity are less negative than in the
first half of the year, which is a thin silver
lining.
“Even so, there's little evidence yet of a meaningful turnaround,
and firms are increasingly focusing on building resilience and
efficiency as they navigate a challenging economic environment –
at the expense of capital spending and longer-term growth
ambitions.
"Firms are already shouldering the cost of the government's
fiscal decisions. The Autumn Budget must not add to that strain
with further tax rises that risk undermining investment and
growth. If the government wants to unlock growth, it must cut the
cost of doing business, give firms tax certainty, deliver further
flexibility to the Growth and Skills Levy, and rethink the
Employment Rights Bill.”
A balance is the weighted percentage of companies reporting an
increase minus those reporting a decrease.
Full results are in the attachment accompanying this
release.
01 SEPTEMBER 2025
Notes to Editors:
The CBI Growth Indicator is a composite measure of activity,
based on responses to CBI surveys. In total, 877 firms responded
between 25 July and 14August.
The CBI Growth Indicator is a composite of data on output, sales
and business volumes drawn from three of the CBI's long-running
qualitative UK business surveys: the Industrial Trends Survey
(ITS, covering manufacturing); the Distributive Trades Survey
(DTS, covering retail, wholesale and motor trades); and the
Service Sector Survey (SSS, covering business, professional and
consumer services).
The Growth Indicator covers the volume of output for the ITS,
volume of sales for the DTS and volume of business for the SSS,
for the past three months and next three months.
