CBI: UK private sector activity falls into downturn

The latest research from CBI has highlighted that the UK private sector is experiencing a significant downturn as businesses and professional services experienced the sharpest fall since 2009. 

CBI: UK private sector activity falls into downturn

CBI has revealed that business & professional services activity has dropped to -28% from 0%, as manufacturing saw business activity plummet to -21% from -8%.

Consumer services posted the biggest decline in business since November 2011 (-41% from -26%). Distribution sales volumes saw a slower decline than consumer services in the three months to April, though nonetheless at the sharpest pace in three months (-13% from +4%).



Looking ahead, activity is set to see deep declines over the next three months, with expectations at all-time lows in each survey.

For manufacturing, this is now the worst expectation for growth since 1958, when the survey began (-61% from -20% in March). Similarly, for both business & professional services (-84% from +15%) and consumer services (-94% from -47%), these are the lowest expectations in the survey’s history (since 1998). For distribution (-74% from -5%) and the overall composite balance (-81% from -5%), these are also the weakest set of expectations since records began in 2003.

The research is based on 860 respondents and starkly illustrates the impact that measures to tackle the COVID-19 pandemic are having on private sector activity. 

Additional questions asked in relation to COVID-19 revealed that (percentage of respondents, weighted):

  • 65% of businesses reported that the outbreak had had a significantly negative impact on their domestic operations, with 43% in a state of complete shutdown in the UK.
  • 29% of firms reported shipping delays and 26% reported shortages of goods or materials.
  • Around half (48%) of firms have temporarily laid off some staff, while 13% have done so on a permanent basis.
  • 79% of businesses report cash flow difficulties and 33% experiencing constraints on the availability of external finance. 

Alpesh Paleja, CBI lead economist, said: “Our latest surveys confirm that no sector is being left untouched by the pandemic. Activity is expected to drop at unprecedented rates across the economy, so we are in for a rocky few months ahead.

“However, the social distancing measures put in place are vital for preserving public health, and the government’s swift action has saved many businesses and livelihoods so far. They should continue to remain agile as the situation evolves, ensuring that money gets to those who need it fast. The greater the number of companies helped to survive, the sooner the UK economy can restart and revive.”

  • Read all of our articles relating to COVID-19 here.
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