CITY firms went on a hiring spree in the first quarter as profits jumped and optimism grew on the stabilisation of the economy and calming of the Eurozone crisis, a survey showed today.
Business volumes expanded, fees increased unusually quickly and investment expectations rose, although costs also increased an the value of non-performing loans rose slightly, the Confederation of British Industry’s (CBI) quarterly financial services survey showed.
Business volumes rose for the eighth consecutive month, with a net balance of 23 per cent of firms reporting increases and a balance of 34 per cent expecting further increases over the coming three months.
Banks, building societies, insurers and investment managers all reported growth in volumes, although a net balance of 73 per cent of securities traders said volumes were down.
A balance of 32 per cent said they are more optimistic about the overall situation of their industry, the first positive figure in a year.
The quarter saw an unexpected jump in headcount with a balance of 19 per cent reporting increased employment compared with an expected balance of minus 18 per cent and in stark contrast to the balance of 13 per cent reporting falling headcount in the final quarter of 2011.
Investment expectations have also risen, with a balance of 44 per cent expecting to increase IT spending and two per cent expecting to increase marketing spending over the next year, up from minus 46 per cent three months ago.
However, a balance of 75 per cent said low demand will limit growth in the coming year, while recruiters Astbury Marden said new vacancies in the City fell 11 per cent in March as firms only replaced leaving staff.