The three months to December 2019 saw the fourteenth consecutive rolling quarter – equivalent to one year and two months – of flat or falling volumes in the UK’s private sector. That’s according to the latest Growth Indicator – a composite measure based on 624 respondents – published by the Confederation of British Industry (CBI).
The deterioration in this month’s survey reflected a faster decline in business volumes across all sectors (manufacturing, distribution including retail, consumer services and business and professional services).
Looking forward, private sector activity is forecast to stabilise in the quarter to March 2020 (+1%). Volumes in business and professional services are expected to grow slightly, while retail volumes are tipped to stabilise. Meanwhile, consumer services and manufacturing volumes are set to fall at a slower pace.
According to the CBI’s December economic forecast, UK economic growth looks set to improve gradually from 2020, on the assumption that Brexit uncertainty diminishes and global growth revives. GDP is forecast to grow by 1.2% in 2020 (after estimated growth of 1.3% in 2019), with a somewhat brighter outlook for 2021, with growth picking up to 1.8%.
“A matter of grave concern”
According to Anna Leach, the CBI’s Deputy Chief Economist, “Our surveys suggest that the UK’s private sector activity has fallen at the fastest pace since the financial crisis in December. This should be a matter of grave concern with marked falls in every sector of the economy, and the next quarter providing only a slither of optimism.
“With the General Election having delivered a stable majority, and firms having certainty on the UK’s departure from the EU next month, the Government must now work quickly to give a renewed focus to domestic priorities, which will give the economy the boost it is crying out for.”
For advice on preparing your business for the UK’s departure from the EU, email me or call me on 020 7099 2621.