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Economic News

Private sector activity weakens again in December, CBI data shows

By Benjamin Chiou

Date: Friday 22 Dec 2023

LONDON (ShareCast) - (Sharecast News) - Activity in the UK's private sector declined again in the three months to December, marking the 18th month in a row without growth, according to the Confederation of British Industry's Growth Indicator released on Friday.
The CBI Growth Indicator, which surveyed 661 firms about their output, sales and business volumes across manufacturing, services and distributive trades, found that the composite index of output volumes was -8 this month.

The figures represent percentage balances, indicating the difference in the number of firms reporting higher/above-average/more-than-adequate volumes and those reporting lower/below-average/less-than-adequate volumes.

This was slightly better than the -11 registered in November, but worse than the -7 seen in October. Output volumes haven't been in positive territory since July 2022.

Manufacturing output volumes were unchanged in the three months to December, distribution sales declined again, while services business volumes continued to fall at a modest pace.

The CBI said December's figures suggest "underlying momentum remained very weak in the fourth quarter".

Looking ahead, the CBI expects the UK economy to grow by just 0.8% in 2024, up from 0.6% in 2023, before rising to 1.6% in 2025.

"Although real incomes will rise as inflationary pressures recede, we expect higher interest rates and a weaker labour market to constrain household spending. At the same time, a subdued near-term outlook will weigh on business and housing investment," it said.

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