Private sector activity expected to fall

05 Mar 2025

Activity in the private sector is expected to fall for the fourth consecutive quarter, according to a growth indicator from the Confederation of British Industry (CBI).

Business volumes in the services sector are expected to decline to -23% and distribution sales are anticipated to fall significantly in the three months to May.

Private sector activity fell in the three months to February at a faster pace than the quarter to January.

However, manufacturers expect output to return to growth.

Alpesh Paleja, Deputy Chief Economist at the CBI, said: 'There are some glimmers of hope in our latest surveys. Growth expectations have become marginally less negative, driven by a predicted return to growth in the manufacturing sector. But overall, the data still paints a picture of a tough operating environment for businesses, with consumer-facing sectors faring particularly badly.

'We do expect some tailwinds to growth over the year ahead. Rising real incomes will hopefully give households more confidence to spend, giving some relief to the sectors suffering the most.'