Contributed by CBI
28/09/2020 - CBI
The final round of Brexit negotiations are starting today, with more than three-quarters of businesses (77%) saying they want a deal to be agreed, but only 4% have said they would prefer a no deal scenario. These results are unsurprising, as the latest Growth Indicator has shown the decline in activity within the private sector.
The impact of the pandemic has lessened businesses’ ability to prepare for Brexit, with nearly half (47%) saying that the impact of dealing with COVID-19 has negatively affected preparations.
The findings come as the CBI’s latest Growth Indicator reports that private sector activity fell in the quarter to September, but at a slower pace than last month (-23% from -39%), marking the third consecutive month in which the rate of decline has eased.
Dame Carolyn Fairbairn, CBI Director-General, said:
“Next week Brexit talks enter the eleventh hour. Now must be the time for political leadership and the spirit of compromise to shine through on both sides. A deal can and must be made.
“Businesses face a hat-trick of unprecedented challenges: rebuilding from the first wave of COVID-19, dealing with the resurgence of the virus and preparing for significant changes to the UK’s trading relationship with the EU.
“More than three-quarters of businesses want to see a deal that will support people’s jobs and livelihoods. This matters for firms and communities across Europe.
“For the whole continent, the pandemic has diminished firms’ ability to prepare for an abrupt interruption of restrictions on trade and movement between the UK and the EU.
“A good deal will provide the strongest possible foundation as countries build back from the pandemic. It would keep UK firms competitive by minimising red tape and extra costs, freeing much needed time and resource to overcome the difficult times ahead.
“Governments across Europe have shown a level of ambition to fight the pandemic many wouldn’t have believed – time to show that same creativity and flexibility on securing a Brexit deal.”
The composite measure, based on 648 responses (to surveys conducted between 26 August and 15 September 2020), saw activity in the distribution sector stabilise in the quarter to September (-1% from -26%), after five rolling quarters of decline. The pace of decline also slowed again in manufacturing (-20% from -46%), consumer services (-39% from -64%) and business & professional services (-28% from -32%).
Looking ahead, the fall in private sector activity is expected to ease again over the next three months (-11%). While distribution firms expect activity to fall (-23%), consumer services (-22%) and manufacturers (-6%) expect a further easing, while business & professional services firms (-2%) expect business volumes to stabilise.
A supplementary question found that private sector activity on the whole remains 16% below what would be expected under ‘normal conditions’ (i.e. in the absence of COVID-19).
On the findings from the latest CBI Growth Indicator, Alpesh Paleja, CBI Lead Economist, said:
“The pace of decline in private sector activity has continued to slow this month, with many businesses having sprung back into operation.
“Prioritising bringing infections down is the right move and the Chancellor’s new package of support will go a long way towards helping businesses and households through winter.
“But these are challenging times and we must still keep a close eye on those sectors that will remain under severe pressure in the coming months.”
All articles on this news site are submitted by registered contributors of SuffolkWire. Find out how to subscribe and submit your stories here »