(Sharecast News) - UK private sector firms expect activity to decline over the next three months, according to the Confederation of British Industry's latest Growth Indicator, with business sentiment remaining subdued amid weak demand and ongoing cost pressures.
The CBI said on Monday that firms across the private sector expect activity to fall in the three months to September, with a weighted balance of -28%, marginally weaker than in May and extending a run of negative growth expectations that began in late 2024.

Distribution firms were the most pessimistic, posting an expectations balance of -44%, followed by manufacturing at -31% and business and professional services at -26%. Consumer services firms expected only a slight decline in activity (-5%), marking their least downbeat outlook since August 2024.

The survey also showed private sector activity contracted over the three months to June, with an overall balance of -34%, as all major sectors reported falling activity.

Within services, business volumes fell by -34%, while hiring intentions remained negative at -26%, suggesting firms continue to trim headcount in response to subdued trading conditions. However, selling price expectations eased for a second consecutive month to +11%, returning to around their historical average.

Alpesh Paleja, the CBI's deputy chief economist, said: "Our June surveys paint a picture of an economy that remains soft, cautious and under pressure. Weak demand, fragile confidence and persistent cost pressures still dominate the business landscape, while geopolitical uncertainty continued to hit investment and major purchasing decisions."

Paleja added: "While there are isolated pockets of resilience, particularly in aerospace and some service niches, there is little sign yet of a sustained improvement in underlying activity."

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