Signs of stabilisation in UK service sector


< continued from page one the coming three months, with an expectations balance of +2%.

The number of people employed in Consumer Services fell for the tenth consecutive quarter (-12%), although less rapidly than in the previous quarter (-19%), and less than expected (-20%). Firms expect the fall in employment to slow further in the coming three months (-4%).

In Business & Professional Services, business volumes declined moderately over the past three months (-15%), but faster than expected (-6%).
The decline in the value of business was less marked (-10%), however, and was considerably slower than in the previous three months (-31%), defying expectations of that trend continuing to May (-26%).

Firms have positive expectations for both the volume (+4%) and value (+7%) of business in the coming three months, for the first time in a year.

Optimism about the general business situation among Business & Professional Services firms rose compared to three months ago, for the first time in a year, with a balance of +8%.

Total costs per employee rose (+21%), but by less than expected (+31%), while the rate of deflation in average selling prices (-4%) eased to its weakest since August 2008 (-2%).

The combination of weaker deflation in selling prices and falling volumes left profitability flat in the three months to May (-1%), slightly better than expected (-6%). Business & Professional Services firms predict a slight increase in profitability in the coming quarter (+6%).

Despite persistent cost pressures over the quarter, employment continued to grow for a fifth consecutive quarter (+4%), although slightly slower than expected (+8%). The rate of growth in headcount is expected to accelerate over the next three months (+18%).

“Despite the continued uncertainty emanating from Europe, there are some signs that conditions in the UK service sector are beginning to improve slightly," Ian McCafferty, CBI Chief Economic Adviser, said.

“In Consumer Services firms, confidence is... continued on page three >


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