Business confidence: private sector

Data on the outlook for the private sector from CBI business surveys.

Headline figures

Business confidence: manufacturing industry
Manufacturing optimism: -32% (July 2019) (CBI)
Next release date: October 2019.

Business confidence: services industry
Business and professional firms' optimism: -8% (May 2019) (CBI)
Consumer firms' optimism: -12% (May 2019) (CBI)
Next release date: August 2019.

Business confidence: financial services industry
Financial services firms' optimism: -32% (July 2019) (CBI/PricewaterhouseCoopers)
Next release date: September 2019.

Business confidence: manufacturing industry

Growth in manufacturing output fell in the three months to July 2019 - the first drop in output since March 2016, according to the most recent quarterly Industrial Trends Survey from the CBI.

According to the survey, 24% of businesses reported an increase in new orders and 38% reported a decrease, giving a rounded balance of -15% (from +5% in the three months to April 2019). Looking ahead, new orders over the next three months are expected to pick up again (+10%), with domestic orders broadly flat (+3%) and export orders growing at an above average pace (+9%).

Employment has fallen, with 19% of organisations reporting an increase in the number of people employed and 27% saying employee numbers were down, giving a rounded balance of -8% from the previous quarter (+9%).

Business optimism fell at the fastest pace since July 2016, as 10% of firms said they were more optimistic about the general business situation than three months ago and 42% were less optimistic, giving a balance of -32%. This compares with -13% recorded in the three months to April 2019.

The findings are based on a survey of 291 manufacturing firms conducted between 25 June 2019 and 15 July 2019.

Rain Newton-Smith, CBI chief economist, said: "As the tailwind from stockpiling weakens, clouds are gathering above the manufacturing sector. It's being hit by the double-blow of Brexit uncertainty and slower global growth".

"With orders, employment, investment, output and business optimism all deteriorating among manufacturers, it's crucial for the new Prime Minister to secure a Brexit deal ahead of the October deadline."

Source: CBI Quarterly Industrial Trends Survey, July 2019, on the CBI website.

Business confidence: services industry

Business volumes fell at the fastest pace since August 2012 among business and professional services companies, while business volumes fell at a similar pace to the previous quarter among consumer services firms in the three months to May, according to the CBI's latest quarterly survey of the services industry.

The survey analyses consumer services (such as hotels and restaurants) and business and professional services employers (such as accountancy, legal and marketing).

In the consumer services sector, the survey shows that optimism about the general business situation continued to deteriorate in the three months to May (-12%), but at a slower pace than in the three months to February (-28%). Overall, consumer services firms remain extremely negative about the outlook for business expansion in the year ahead (-31%, compared with -44% in February). Growth in business volumes over the past three months fell to -7%, from -5% in February. Business volumes growth is expected to recover slightly in the three months to August (+5%).

In the business and professional services sector, optimism about the general business situation fell to -8%, compared with -34% in February. Growth in the volume of business over the past three months dropped to -19% compared with -12% in February. Volumes are expected to decline further in the three months to August (-6%).

Growth in average selling prices in business and professional services firms was stable at +4% and is expected to remain stable in the three months to August (+4%). In the consumer services sector, average selling price growth eased (+9%) from the previous quarter (+21%) and selling price inflation is expected to pick up in the next quarter (+15%).

Anna Leach, CBI deputy chief economist, said: "Brexit paralysis continues to take a toll on the UK's services firms. Profits, optimism and investment spending are falling sharply amidst a torrid operating environment."

The quarterly study, conducted between 29 April and 14 May 2019, was based on responses from 93 business and professional firms and 36 consumer services firms.

Source: CBI Service Sector Survey, May 2019, on the CBI website.

Business confidence: financial services industry

Business volumes in the financial services sector were -3% in the three months to June 2019, according to the latest CBI/PricewaterhouseCoopers Financial Services Survey. Business optimism in the quarter to June continued to fall at a fast pace to -32%, compared with -43% recorded in the three months to March 2019.

Business volumes were down, with a balance of -3% over the three months to June; this compares with -12% recorded in the quarter to March. Looking ahead, business volumes are expected to fall sharply, with the level of optimism in terms of business volumes increasing at -24% compared with -30% in March.

Overall, 26% of financial services firms said that they had increased employment, while 13% said that employee numbers fell, giving a balance of +13% in the three months to June, compared with -21% in the three months to March. Employment growth is expected to pick up further in the next quarter (+19%).

Rain Newton-Smith, CBI chief economist, said: "Clouds continue to hang over the financial services sector. Optimism has been flat or falling for three and a half years, while business volumes are weak and investment is suffering."

The quarterly survey conducted between 14 May and 7 June 2019 received 79 responses.

Source: CBI/PricewaterhouseCoopers Financial Services Survey, July 2019, on the CBI website.

Note: unless otherwise stated, all figures are percentage balances, ie the difference between those replying "more", "up", "above normal" or "more than adequate" and those replying "less", "down", "below normal" or "less than adequate".