Economy: Service sector growth to rebound after summer pause, says CBI
- Credit: Archant
Growth in the UK’s powerhouse service sector slowed slightly over the past three months, but optimism over the recovery continued to increase, according to a new survey.
The latest CBI Services Sector Survey also found that the rate of growth in the sector, which accounts for around three-quarters of the entire UK economy, is expected to improve once more in the coming quarter.
Growth in business volumes in the three months to August eased compared with recent surveys, and profitability also rose at a slower pace, but this came after multi-year highs in the previous quarter.
Other indicators in the survey painted a healthier picture of activity in the sector. Growth in numbers employed in the business and professional services sector, which includes accountancy, legal and marketing firms, reached its highest rate in nearly seven years, with expectations for the coming three months at a record high since the survey began in 1998.
And investment intentions for the year ahead in the consumer services sector, which includes hotels, bars, restaurants, travel and leisure firms, are particularly robust, with plans for spending on vehicles, plant and machinery also at a record high.
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However, the survey revealed increased concerns that the availability of professional and clerical or other staff is likely to limit business expansion over the next year.
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.
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“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.
“Employing more staff and planning to increase investment are positive steps in the quest for sustainable growth. However, skills shortages mean it is increasingly hard for firms to find and hire the right people.”