We use cookies to provide you with a better experience. If you continue to use this site, we'll assume you're happy with this. Alternatively, click here to find out how to manage these cookies

hide cookie message
RSS FeedChange Management

Services sector activity falls despite growth forecast


Across the consumer as well as business and professional services volumes and values fell

Article comments

The dominant services sector reported further falls in business volumes and values in the three months to August, confounding expectations for growth, a new business study showed on Tuesday.

The latest quarterly CBI service sector survey found that across consumer as well as business and professional services, which accounts for around three quarters of output, activity fell.

The latest grim data will add pressure to the chancellor to loosen his austerity plan aimed at cutting the budget deficit and begin spending to instil confidence in businesses and consumers in order to kick start the economy, which is in its second recession in four years.

Consumer services reported volumes and values falling at a similar pace to the previous quarter, while optimism was much lower than three months ago.

Profitability among consumer services fell due to rising employee costs, falling volumes and flat prices, the CBI said. Those employed in the sector fell slightly as did training.

Expectations for the outlook continued to look bleak as respondents said they expected volumes to fall at a similar rate, the speed of the fall in values would accelerate and the decline in profitability would also accelerate.

Business confidence among professional services was also lower in the three months to August than it was three months ago, according to the survey.

“Conditions in the service sector have not improved as expected this quarter, with firms now more negative about the overall business situation than they were three months ago,” Anna Leach, CBI head of economic analysis, said.

“Companies selling services to consumers continue to face challenging times, with price-cost pressures and a weak business environment squeezing profits,” she added.

The survey, carried out between 27 July and 15 August with 196 businesses, polls accountancy, legal and marketing firms as well as hotels, restaurants and travel and leisure companies.

Share:

Recommended Articles

Comments

Services sector activity falls despite growth forecast
Change Management

How new technologies are 'disrupting' shared services

How new technologies are 'disrupting' shared services

A whole new model with less staff, more focus on intellectual capabilities and localised staffing is evolvingmore ..


Big increase in UK online sales tracked by IMRG Capgemini

Estimated £8.1 billion spent onlinemore ..

BHP Billiton names CFO Graham Kerr boss of new demerger business

BHP Billiton announced plans to separate its main business to simplify the group and boost shareholder valuemore ..

Online retailers to benefit from superfast broadband

Government hopes that 95 percent of the population will have superfast broadband by 2017more ..

Car industry’s greatest challenge is the shift to software

BMW’s outage illustrates the minefield manufacturers are navigating in light of the connected carmore ..

Is the FTSE 350 hiding behind token women appointments?

There are just 16 female executives in the first five FTSE 100 companies and technology firms fare even worsemore ..

Send to a friend

Email this article to a friend or colleague:


PLEASE NOTE: Your name is used only to let the recipient know who sent the story, and in case of transmission error. Both your name and the recipient's name and address will not be used for any other purpose.



In Depth
Can finance rise to the challenge of major transformation?

Can finance rise to the challenge of major transformation?

Outdated finance processes, systems and competencies leave too many questions unanswered more ..

In Depth
Interim CFO or consultant? The pros and cons

Interim CFO or consultant? The pros and cons

Ed Harding offers an insight into the life of an interim CFO and the advantages in driving transformation more ..

Advertisement

* *