Surge in business for services sector: CBI
Business has surged in the UK services sector - covering everything from estate agents to restaurants - over the last few months, a survey today said.
The CBI services sector survey said there was strong growth in the three months to February, with consumer services and professional services recording their first rise in profits in more than two years.
And growth in firms such as solicitors and accountancy practices was expected to accelerate further in the next quarter.
Consumer services, including hotels, bars, restaurants, travel and leisure firms, grew at their fastest in a year.
Employment continued to grow in business and professional services, while growth in headcount picked up in the consumer services sector.
Prices continued to rise in consumer services but were flat in business and professional services. Next quarter, price growth is expected to accelerate in both sub-sectors.
The CBI said sentiment was mixed in both sectors, though consumer services was more optimistic than before. Such firms were at their most optimistic for over three years about their plans for business expansion in the year ahead while business and professional services firms were more negative in their views.
CBI chief economist Rain Newton-Smith said: "It's great to see the services sector start the year off on a firm footing. Despite feeling the pinch from high inflation, business volumes have bloomed, profits have grown for the first time in over two years and hiring is on the up.
"But there are still some telling signs that the underlying challenges for business, professional and consumer services firms have not gone away.
"Investment plans are muted amid uncertainty, and plans for expansion among business and professional services firms have turned downwards.
"Up and down the country, businesses are plainly worried at the lack of clarity over the UK's future relationship with its biggest trading partner, the EU.
"Belonging to a comprehensive customs union would go a long way to allaying these concerns, thus alleviating some of the uncertainty weighing on investment and expansion plans."
Meanwhile, investment intentions for the year ahead remain positive for IT. However, spending in other areas is set to be cut back slightly or left unchanged.