Partner Article

Service sector confidence on the up

Confidence has grown in the service sector in the last three months, although many businesses remain uncertain about the future according to the latest survey from CBI.

Findings have shown that optimism about the business climate has grown by 5% over the last quarter, while the number of firms planning to expand went up by 32%, which is the strongest rise since August 2007.

Activity in the service sector was mixed, and CBI found that 22% more companies were optimistic about the business outlook, however 91% felt a lack of certainty around demand would stunt growth.

CBI’s Head of Economic Analysis, Anna Leach, said: “There are encouraging signs here, particularly with employers increasing headcount and training expenditure at the fastest pace since November 2007 and investment plans for the year ahead a little better.”

Business and professional services firms are relatively bullish about the coming 12 months and confidence has rebounded sharply, following a surprise pickup in business.“Intentions to invest over the next year were stronger, with an expected 27% increase in IT investment, and an 8% rise in land and buildings expenditure.

The responding 153 companies also said they had upped investment in employment and training, which they expect to continue in the coming quarter, while costs per worker rose by 22%.

Ms Leach concluded: “Consumer services continue to face more challenging conditions: although profits and confidence have stabilised, business volumes continued to shrink this quarter and no material improvement is expected.”

This was posted in Bdaily's Members' News section by Miranda Dobson .