Private sector activity fell by at its sharpest pace since July 2009 – down to minus 25 per cent from minus four per cent – in the three months to April, according to the latest CBI monthly Growth Indicator.
And there is more bad news to come with the survey recording expectations of much deeper decline in the coming months.
The composite measure based on 860 respondents, starkly illustrates the impact that measures to tackle the COVID-19 pandemic are having on private sector activity.
Business & professional services experienced the sharpest fall since 2009 (minus 28% from 0%), as did manufacturing ( minus 21% from minus 8%).
Consumer services posted the biggest decline in business since November 2011 ( minus 41% from minus 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 (minus 13% from four per cent).
Looking ahead, it shows activity 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 ( minus 61% from minus 20% in March).
For distribution ( minus 74% from minus 5%) and the overall composite balance ( minus 81% from minus 5%), these are also the weakest set of expectations since records began in 2003.
Additional questions asked in relation to COVID-19 revealed that :
- 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.
CBI lead economist Alpesh Paleja 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.”
