Professional services sector records fastest growth since 2007, says CBI report
Business activity in the professional services sector grew to its highest level since 2007, with overall confidence levels in this sector also rising, the latest quarterly Service Sector Survey from the CBI (Confederation of British Industry) has revealed.
The business and professional services sector, which includes accountancy, legal, and marketing firms, witnessed business volumes rise (+20%) at their fastest pace since November 2007, in line with expectations. As a result, profitability recorded its strongest growth since February 2008, reaching (+9%), and is expected to grow further in the next three months (+15%).
As a direct result of these improved figures, the number of employees in the sector grew quite abruptly (+22%), the fastest rate of growth since November 2007 (+33%) and further growth in terms of number of employees is expected in the next three months (+36%).
Confidence levels are also quite high, as firms are expecting to expand their business (+39%) to the greatest extent since February 2006 (+42%), while planned spending on IT in the year ahead rose sharply on the previous quarter (+21% compared with +6%), but concerns that labour shortages will constrain capital expenditure have also risen.
Stephen Gifford, CBI Director of Economics, said:“We’ve seen a further build-up of momentum in the service sector this quarter, with business and professional services firms in particular seeing a turnaround in their fortunes. Confidence has risen strongly across the board, and the outlook is positive in the short-term. But consumer services firms are a bit more worried about the longer-term, and have scaled back their investment and expansion plans.”
“Conditions remain tricky as households grapple with the prolonged squeeze on real incomes and business confidence remains vulnerable to any adverse developments in the global economy. But, all being well, business should continue to pick up through this year and into next” he added.