23 December 2020
Private sector activity fell at a faster pace in the three months to December (balance of -21% from -16% in November). That’s according to the CBI’s monthly Growth Indicator.
The composite measure was based on 595 respondents between 23 November and 14 December. Within this, consumer services (-59% from -42%) fell at a sharper pace which is to be expected given the 2nd national lockdown in England fell within the survey field period, while distribution volumes were flat (-2% from +10%).
Manufacturers (-6% from -6%) and business & professional services firms (-21% from -21%) reported the same pace of decline as last month.
Looking ahead, the pace of decline is expected to remain broadly similar in the three months ahead (-18%), although it should be noted that the survey was carried out before the introduction of tier 4 and other new restrictions announced within the devolved nations.
Charlotte Dendy, CBI Principal Economist, said:
“The economy is having a bad end to a dreadful year. These figures show that private sector activity continues to decline, with the second lockdown in England having a particularly significant impact on our all-important services sector.
“But while public health must come first, businesses will now be wrestling with the increased restrictions into the new year. The Government has helped by making clear that there will be no changes to the furlough scheme until at least Spring next year, while applications for Government-backed loans can also continue.
“That said, there is no doubt that a fresh look will be needed in January as to how the Government can support UK businesses, given a renewed tightening in restrictions after an already tough year. All efforts must be made to accelerate the roll out of mass rapid testing and the vaccine so they can start to have a material impact.”