CBI: Service sector sees a slump in profitability

PROFITABILITY in Britain’s service sector unexpectedly fell last month and firms expect no end to the current gloom engulfing the sector, the CBI will reveal today.

A net 14 per cent of consumer services firms reported overall profitability to be down over the past three months while a net 29 per cent of business and professional services firms saw a fall in profitability. Both sectors expect profitability to continue to fall over the coming quarter.

Business levels also were below normal with consumer services reporting both the value and volume of business to be well below normal in August. Firms expect a slight improvement in both measures over the coming quarters. In business and professional services, value also fell while volume of business was little changed, prompting a fall in confidence for the first time in over a year.

The CBI’s Ian McCafferty, said: “These survey results highlight that activity across the economy is patchy, with some sectors doing better than others. And such conditions are likely to continue into next year.”