Partner Article

Job creation on the cards as service sector optimism rises

Service sector businesses are continuing to take on more staff as their confidence in an economic upturn increases, research from the CBI suggests.

A survey from the business lobby group showed service sector businesses were increasingly confident in the three months to May and business volumes rose across the same period.

Hotels, bars, restaurants, travel and leisure firms and others in consumer-facing sectors regarded levels of business to be comfortably above normal - and, despite higher costs, these firms were at their most profitable since 2006.

The business and professional services sector - which includes accountancy, legal and marketing firms saw average selling prices rise following a prolonged period of falling or stable prices.

Elsewhere the survey indicated that consumer services firms plan a strong increase in IT capital spending over the next 12 months, driven mostly by a desire to replace existing capital.

Inadequate net returns were seen as the single biggest factor likely to limit capital expenditure over the next year, while the proportion of respondents citing demand uncertainty dropped to its lowest level since May 2006.

Katja Hall, CBI deputy director-general, said: “With a full year of growth under their belts, service sector firms are more upbeat than they have been for a long time.

“The recovery continues to strengthen with both consumer and business-facing firms taking on more staff and investing in training and IT.

“But a rising number of firms, particularly in business and professional services are having problems finding the right staff. This survey identifies a skills gap as a growing constraint on business expansion in the sector over the year ahead.”

This was posted in Bdaily's Members' News section by Tom Keighley .