Business volumes in the services sector are expected to see a sharp decline of 23%, particularly impacting business and professional services (-14%) and consumer services (-55%). Distribution sales are predicted to drop by 24%, contrasting a projected 8% growth in manufacturing output. The CBI reported a continued downturn in private sector activity, falling 27% in February. However, Alpesh Paleja expressed cautious optimism due to improved growth expectations in manufacturing and rising real incomes, which may bolster consumer spending. Businesses are calling for government action to restore confidence and support investment initiatives.
"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."
"Private sector businesses are looking to the government to take steps to restore confidence and encourage investment - whether through long awaited reforms to the apprenticeship levy, increased incentives for occupational health, or changes to business rates."
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