UK private sector activity was stable in the quarter to December, according to the latest CBI Growth Indicator. 

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The composite measure – based on 609 respondents across the distribution, manufacturing and service sectors – showed the balance of firms reporting a rise in output at +3%, broadly unchanged from +2% in the three months to November.

Falling services volumes were partially offset by strong manufacturing growth and steady distribution growth, underpinned by a solid expansion in wholesaling and motor trades. Meanwhile, retail volumes fell at the fastest pace since November 2014 in the three months to December. 

Looking ahead private sector activity is expected to remain steady over the three months to March (-1%), with declining services volumes set to continue alongside slower distribution and manufacturing growth.

The latest CBI Growth Indicator is consistent with slow and steady growth momentum as detailed in our December economic forecast. Underlying conditions remain lacklustre, with household spending under persistent pressure from squeezed real earnings and Brexit uncertainty restraining business investment.

Rain Newton-Smith, CBI Chief Economist, said:

“Private sector growth appears to have tailed off towards the end of 2018 and is now pointing to a slowdown in the fourth quarter, following a stronger weather-buoyed showing earlier in the year.”

“The spectre of a no deal Brexit continues to loom large and businesses are staying extra vigilant. With less than 100 days left before the UK leaves the EU, it’s time for no deal to be taken off the table once and for all. Firms are desperate for that reassurance to continue investing and supporting job creation across all sectors of the economy.”