UK private sector activity was broadly unchanged in the quarter to February, according to the latest CBI Growth Indicator.
The composite measure, based on 650 respondents across the distribution, manufacturing and service sectors showed the balance of firms reporting growth stood at -3%, the weakest since April 2013. This marked the fourth consecutive month of no growth in activity.
The stagnation in overall volumes reflected falling services volumes and slower manufacturing growth, which were partially offset by a rebound in distribution growth. Within distribution, retail volumes continued to fall, for the fourth consecutive month.
Looking ahead, private sector activity is expected to fall slightly over the three months to May (-4%), with services volumes set to fall at a sharper pace alongside similar manufacturing growth. Meanwhile, distribution volumes growth is expected to pick-up.
The CBI Growth Indicator is consistent with slow momentum as detailed in our December Economic Forecast. Underlying conditions remain subdued, with household spending under persistent pressure from squeezed real earnings and the prospect of a no-deal Brexit tightening the vice on business investment.
Rain Newton-Smith, CBI chief economist said, “Economic momentum is ebbing away as consumer confidence weakens and businesses brace themselves for the possibility of a no-deal Brexit. More and more companies are hitting the brakes on investment and day-to-day business decisions are becoming increasingly problematic.
“Until politicians can agree a deal that commands a majority in Parliament and protects our economy, growth will continue to suffer and long-term damage will be done. Politicians must steer our country away from the cliff edge to avoid further lost jobs and investment.”