Partner Article

Services sector stabilises

Firms operating in the UK’s service sector saw volumes of business stabilise in the last three months, according to the latest CBI Service Sector Survey.

However, the situation differed between the consumer services sub-sector, where there was a slight improvement in business, and the Business and Professional Services sub-sector where conditions were more difficult.

The quarterly research, conducted between 27 January and 10 February, covered 180 service sector firms. They are divided into Business and Professional Services, such as accountancy, legal and marketing firms, and consumer services, including hotels, bars and restaurants, travel and leisure.

In consumer services, the value and volume of business both rose slightly. Over the last three months, the balance for value of business was +10%, the highest since November 2007, and for volume of business was +7%, the highest since August 2007.

Overall profitability was little changed, with a balance of -2% as costs rose, though this figure was the most encouraging since November 2007, when it was +27%.

There were rises in selling prices in consumer services, but these were probably caused in large part by the increase in VAT at the start of the year.

38% of companies said prices rose, and 8% said they fell, giving a balance of +30%, the highest since May 2008. Prices are expected to rise further over the next three months by a balance of +37% of companies.

This was posted in Bdaily's Members' News section by Ruth Mitchell .