CBI services sector survey: confident firms are ramping up investment plans despite slowdown in growth
The UK’s service sector, which makes up around 80 per cent of the economy, is in fine fettle, according to new survey figures published this morning, with a record number planning to invest in new technology.
The service sector survey from the Confederation of British Industry showed that business volumes in consumer services – hotels, bars and restaurants – rose at 40 per cent of 67 surveyed firms in the three months to November. It compares with nine per cent who said they were down. While the balance of 31 per cent is strong, it is slight slowdown on August’s survey when the balance was 33 per cent.
For business and professional services, where 109 firms from accountancy, legal and marketing sectors were surveyed, the balance dropped sharply to 13 per cent from 33 per cent. It implies the business and professional services growth was at its lowest since 2013.
Despite the drop, optimism levels climbed with firms expecting greater business volumes over the next three months. Hiring and investment plans were also robust.
Companies are increasingly investing to improve their efficiency and exploit new technology, with the share of companies citing this motive rising to a record high in the consumer services sector, and to a three-year high in business & professional services, the CBI said.
“The UK services sector’s good run continues, and it’s encouraging that business volumes are expanding across the board, and that companies still expect healthy growth in profits,” said CBI director of economics Rain Newton-Smith.
“Employment growth is expected to slow a little in the quarter ahead, and given concerns over a lack of skilled workers – remaining close to a seven year high in business and professional services – companies are increasingly looking to invest in new technologies that could raise their productivity.”