UK’s professional services sector weathers economic headwinds
The UK’s professional services sector has continued to grow its turnovers in the face of major economic headwinds, new UK government data shows.
The accountancy sector’s turnovers increased 3.7 per cent, from £3.41bn in May to £3.54bn in June, the Office for National Statistics (ONS) data shows.
The country’s legal sector also saw its turnovers increase by 10 per cent from May to June, as the legal services industry’s revenues jumped from £3.23bn in May to £3.59bn the following month.
The growth came as the entirety of the UK’s services sector, which dominates the country’s economy, saw its turnovers increase 5.7 per cent, to £240bn.
The services sector currently accounts for 78 per cent of the UK’s total economic output and provides 82 per cent of UK jobs.
The statistics come as a sign Britain’s services sector has stayed resilient in the face of the surging inflation that saw the UK’s wider economy contract by 0.1 per cent from April to June 2022.
Julie Matheson, a partner at London law firm Kingsley Napley LLP said: “Accounting as a sector remains robust despite various economic headwinds and global inflation.”
However, the figures also come amid warnings that legal sector revenues could suffer over the coming year due to the economic downturn.
Analysts from Thomson Reuters this week warned a slowdown in dealmaking could hit law firms’ revenues as the M&A boom, that has buoyed the sector’s profits, begins to subside.
“Firm leaders need to be attuned to these macro issues in order to maintain stability over the second half of the year,” Matheson said.
The top-tier salaries being paid out by major professional services firms, in their efforts to attract top talent, could also begin to dent the sectors’ profitability, as turnovers start to dip.