Boom in the City as professional services output increases quickly

 
Tim Wallace
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Professional services are leading the recovery, though growth has been held back by debt (Source: Getty)
Business services firms are seeing a boom on a scale not experienced for almost a decade, with sales volumes rocketing and hiring up, according to a study today from the Confederation of British Industry (CBI).

Profits are picking up sharply at accountancy, law and marketing firms, with 39 per cent of business and professional services companies reporting rising profitability in the last three months. Just 16 per cent suffered a fall in profitability, making the net improvement the strongest seen since late 2007.

Business volumes also shot up in the sector, with 49 per cent reporting an increase in work levels, and only seven per cent experiencing a decline – the strongest overall position since early 2006.

As a result, 31 per cent of business and professional services firms have taken on more staff in the past three months, and seven per cent have cut headcount.

Consumer services firms, like hotels and bars, are also taking on staff, though business volumes are rising more slowly than in the professional services sector.

“Strong confidence and activity in the services sector reinforces our view that weaker growth over the first quarter of 2015 will prove temporary,” said the CBI’s director for economics Rain Newton-Smith.

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