5 March 2001, 12:42 Business confidence in the UK service sector
LONDON (MktNews) - Business confidence in the UK service sector
rose in February versus November, particularly in consumer services,
according to the latest quarterly service sector survey published Monday
by the Confederation of British Industry and Deloitte and Touche.
The optimism balance in consumer services rose to +11% in February,
the highest level since September 1999, after -9% in November.
Meanwhile, business and professional services recorded a balance of +12%
versus -11% in November.
"The recovery in optimism in both service sectors is based on
business growth which is so far unaffected by the slowdown in the US
economy," said Sudhir Junankar, the CBI's associate director of economic
analysis.
However, he noted there are marked differences between the two
sectors. "Business and professional services firms are facing acute cost
pressures and falling profitability as prices fall, but they plan
substantial IT spending to boost efficiency.
"Consumer service firms, by contrast, have been able to pass on
some of the cost increases into prices but intend to scale down their IT
investments over the coming year," Junankar said.
Overall profitability grew strongly in consumer services over the
past three months with a balance of +36%, but in business and
professional services it fell substantially, to -17%.
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