Firms across the private sector expect activity to fall in the
three months to October (weighted balance of -18%), according to
the CBI's latest Growth Indicator.
However, expectations are the least negative since March, just
after the outbreak of the Iran conflict. But looking back
further, the latest results extend further a period of negative
predictions for growth that began in late 2024.
Modest falls in activity in business & professional services
(-14%) and consumer services (-14%), along with a larger fall in
manufacturing output (-30%), are expected to drag on activity.
However, while distribution sales are also expected to decline
(-20%), these mark the least pessimistic expectations since
August 2025.
The subdued outlook comes as private sector activity fell in the
three months to July (-21%), though at the slowest pace since
February (-19%). All sub-sectors reported falling activity.
Alpesh Paleja, CBI Deputy Chief Economist,
said:
Businesses are slightly less pessimistic about the outlook than
they were a few months ago, but they are far from breathing a
sigh of relief. Firms continue to report subdued demand, hesitant
customers and weak confidence, while persistent cost pressures
are keeping margins squeezed. Renewed tensions in the Middle East
have added another headwind that had previously begun to ease.
The result is an economy that appears to be finding a floor, but
not yet a firm footing.
The persistently negative data in our surveys highlights the
economic challenge facing the new Prime Minister and his team, as
they begin to set out their agenda. Recent announcements around
support for households and the high street are welcome but if
government wants growth that lasts, it needs to make the UK a
better place to invest, hire and scale. That means cutting the
cost of doing business from energy bills and labour costs to tax
and planning speeding up delivery, and creating the conditions
for private capital to crowd in.
"Fostering conditions that inspire businesses to create jobs and
invest is imperative to lowering the cost of living for
households, allowing all to benefit from consistent economic
gains."
Key findings from our monthly Services Sector Survey
showed:
-
Hiring intentions within the services sector remained
negative (-14%), though are at their least pessimistic since
October 2024. Business & professional services expect
headcount to be cut slightly (-10%) in the three months to
October, while consumer services expect a larger reduction
(-22%).
A balance is the weighted percentage of companies reporting
an increase minus those reporting a decrease.
Full results are in the embargoed attachment accompanying
this release.
29 JULY 2026
Notes to Editors:
The CBI Growth Indicator is a composite measure of activity,
based on responsesto CBI surveys.In total, 904 firms responded
between 25 June and 14 July.
It 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 the next three months.
