UK: Growth in service sector slows
PUBLISHED: 14:00 26 August 2014
(c) Ryan McVay
Growth in the dominant services sector slowed in the three months to August, according to latest figures from business lobbying organisation the CBI.
It found that consumer services - including hotels, bars, restaurants, as well as travel and leisure firms - experienced the weakest expansion in a year.
Meanwhile, business and professional services - including accountancy, legal and marketing firms - grew at the slowest pace since November.
The services sector represents more than three-quarters of UK output and has led the economy out of recession.
Katja Hall, CBI deputy director-general, said: “The slowing in the pace of growth and profits in the service sector reflects our view that momentum in the economy will ease in the second half of the year.
“But this doesn’t necessarily mean a gear change in the recovery. It’s encouraging that our service sector firms continue to feel upbeat, especially when looking ahead to the next quarter.”
The CBI said the poll of 215 firms revealed increased concern that the availability of professional or clerical staff was likely to limit expansion over the next year.
The survey found that in consumer services, 43% of firms said business volumes were up compared with three months ago and 17% said they were down, giving a balance of plus 25%, down from 42% in May and the lowest level since last August.
Optimism over the business situation was at plus 43%, lower than in May.
In business and professional services, business volumes showed a balance of plus 16%, down from May and last lower in November. Optimism fell to plus 31%, its lowest level since May last year.