02 December 2025
Firms across the private sector once again expect activity to fall in the next three months (weighted balance of -27%), according to the CBI’s latest Growth Indicator. This extends a run of negative predictions that began in late 2024.
The downturn is expected to be broad-based, with business volumes in the services sector set to decline (-26%), driven by weak expectations in both business & professional services (-23%) and consumer services (-40%). In both sectors, predictions for growth are at their weakest in six months. Both distribution sales (-26%) and manufacturing output (-30%) are also expected to fall, the latter seeing the most negative expectations in almost a year.
The disappointing outlook comes as private sector activity fell in the three months to November (-35%), at the fastest pace since August 2020. All sub-sectors reported falling activity.
The CBI’s November surveys – which comprise this month’s Growth Indicator – were in field before the Budget.
Alpesh Paleja, CBI Deputy Chief Economist, said:
“Growth expectations weakened in November, some of which may be down to jitters ahead of last week’s Budget. Businesses tell us that much of the month passed in limbo ahead of that, with big discretionary spending and investment on hold. “However, this only compounded the headwinds to growth that have been apparent throughout the year: cautious spending behaviour by households and clients making demand conditions tepid, against a backdrop of persistent cost pressures for corporates.
“Stability is the precursor to growth. While last week’s Budget is likely to add further costs to businesses, notably with the addition of NICs to salary sacrifice pension contributions, the fiscal headroom created may provide some stability going forward.
“The government must now leverage enterprise expertise to unlock economic growth. This starts by applying the effective model of compromise and partnership achieved on the Employment Rights Bill, by collaborating directly with business to boost growth.”
A balance is the weighted percentage of companies reporting an increase minus those reporting a decrease.