UK economy stagnating - CBI
By Abigail Townsend
Date: Monday 29 Jan 2024
(Sharecast News) - The UK's private sector continued to struggle over the last three months, a survey showed on Monday.
According to the Confederation of British Industry's latest Growth Indicator, private sector activity in the three months to January fell, with a weighted balance of -11. That compares to December's balance of -8.
Activity has now been either flat or falling for the last 18 months, the CBI noted.
Within the services sector, volumes fell sharply in consumer services, with a balance of -25. Business and professional services volumes were unchanged, however.
Manufacturing output, meanwhile, fell into negative territory once again, sliding to -10 from 0, while distribution sales fell at their fastest pace since July 2020, with a balance of -29.
Conditions were not forecast to worsen over the next quarter, however. Activity is expected to remain broadly stable, with a balance of 3.
Hiring intentions also returned to a positive position in the services sector, rising to 11 from -2 in December.
Alpesh Paleja, CBI lead economist, said: "The new year has so far failed to breathe new life into the UK private sector, with our latest surveys signalling a continuation of last year's weak growth momentum.
"There is some room for encouragement, with both services and manufacturing firms hopefully of seeing a pick-up in activity.
"However, it does look like the economy overall is set to remain stagnant at best in the near term."
Alpesh called on the government to use the March budget to address "acute" labour shortages, improve competition and invest "meaningfully" in high-growth industries.
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