The CBI's latest Growth Indicator reveals that private sector firms anticipate further decline in activity for the upcoming months, marking the weakest expectations since September 2022. Anticipated drops in services, distribution, and manufacturing sectors are forecasted, with business and consumer services facing the most considerable setbacks. This grim outlook stems from rising costs due to higher employer NICs and the National Living Wage, alongside global trade uncertainties and weakened domestic demand. Firms are urging the government for proactive measures to bolster economic confidence and growth, especially with upcoming policy reviews.
There is little sign of summer cheer in our surveys, with private sector activity expected to remain subdued over the next three months.
Firms highlight numerous headwinds: the continued impact of higher employer NICs and the National Living Wage hike on their costs and operations.
Against this backdrop of uncertainty, private sector firms are looking to the government for decisive action to restore business confidence and boost growth.
The anticipated fall is driven by predictions of decline in both business & professional services and consumer services volumes.
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