Private sector business activity fell again in the three months to February amid weak consumer spending.

According to the Confederation of British Industry (CBI)’s latest growth indicator, all sectors reported falling business volumes, resulting in a 27% fall in economic activity.

In the service sector, volumes are anticipated to decline further by 23%, driven by a predicted fall in business and professional services (-14%) and the weakest expectations for consumer services (-55%) since September 2022.

Distribution sales are also expected to fall “significantly” in the three months to May (-24%). However, manufacturers anticipate output to return to growth, with an increase of 8%.

CBI deputy chief economist Alpesh Paleja said that despite this “glimmer of hope” the overall data “Paints a picture of a tough operating environment for businesses, with consumer-facing sectors faring particularly badly.”

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She explained: “Private sector businesses are looking to the government to take steps to restore confidence and encourage investment – whether through long awaited reforms to the apprenticeship levy, increased incentives for occupational health, or changes to business rates.

“Further ahead, companies want to see an industrial strategy which offers the stability and certainty needed to drive innovation and investment, as well as fostering sustainable economic growth that benefits both businesses and households.”