Insight 42 - Magazine - Page 18
Private sector expects no
growth in final months of 2024
P
rivate sector firms expect no
change in activity over the next
three months (weighted balance
of -1%), according to the latest Growth
Indicator.
This marks the second consecutive
rolling-quarter where survey respondents
did not expect any growth over the nearterm.
The tepid picture was echoed across all
major sub-sectors. Business volumes
in the services sector are anticipated
to be broadly unchanged (+2%), as
mild growth in business & professional
services (+6%) is expected to partly offset
a modest decline in consumer services
(-10%). Distribution sales are expected to
fall (-10%) and manufacturers anticipate
output to be broadly unchanged in the
three months to January (-1%).
The flat outlook comes as private
sector activity fell marginally in the
three months to October, though at a
slower pace than in the three months
to September (-4%, from -15% in
September). Activity has been flat or
falling since August 2022.
Key findings from our monthly
Services Sector Survey showed:
• Business volumes in the services
sector were unchanged in the three
months to October (+1%), after
falling in September, marking 16
consecutive rolling-quarters of flat or
falling volumes. Within this, business
& professional services volumes rose
marginally (+4%), after falling slightly
in the three months to September.
Consumer services volumes also fell
(-9%), but at a much slower pace than in
September.
• Hiring intentions within the services
sector are mixed. Business &
professional services expect headcount
to rise marginally over the next three
months (+4%), but consumer services
companies anticipate numbers
employed to fall (-12%).
• Price growth expectations were broadly
18
"Many businesses are
very concerned about
potential increases
to Employers’ NICs
and the impact it will
have on pay, hiring
and investment. "
unchanged from September (+9%) and
remain close to the long-run average
(+7%). Inflation expectations for business
& professional services eased in October
(+6%, from +13% in September), and
strengthened for consumer services firms
(+17%, from +9%).
Alpesh Paleja, CBI Interim Deputy Chief
Economist, said of the CBI survey:
“Our latest surveys paint a picture of
bIZ4BIZ INSIGHT MAGAZINE | DECEMBER 2024
an economy shifting down a gear as
we head into the final quarter of 2024.
Weaker growth expectations are weighing
on firms’ hiring intentions, which have
treaded water since the beginning of the
summer.
“In the budget, the Chancellor has an
opportunity to boost confidence despite
the difficult fiscal picture. Business will
want to see messages of hard choices
balanced with interventions that deliver a
vision of optimism.
‘Many businesses are very concerned
about potential increases to Employers’
NICs and the impact it will have on pay,
hiring and investment. If the government
does follow through, then they will want
to see the government act on other key
areas of investment, such as reforming the
Apprenticeship Levy
“Giving firms certainty over future
tax plans in the form of a business
tax roadmap, measures to enhance
productivity, and the country’s net zero
trajectory can all help cement the path to
long-term growth.”
