Consumer facing businesses, such as bars and restaurants, have a pessimistic outlook about their economic recovery, according to a CBI survey.
In the three months to August, optimism about the general business situation fell from +47 per cent in the previous quarter to -17 per cent despite an uptick in sales volume.
The biggest concerns raised by consumer businesses were uncertainty about demand, which stood at 56 per cent, and growing worries about labour shortages, which jumped from 9 per cent to 46 per cent in the latest quarter.
“Firms in sectors such as hotels, restaurants and travel, do not expect this strength to persist into the next quarter, reflecting the pressure that consumer services firms continue to face,” said Charlotte Dendy, CBI’s principal economist.
“With the vaccine roll-out continuing to deliver, it is vital that this autumn is used by the Government to help unlock investment in the private sector to cement the economic recovery,” Dendy added, suggesting the reforming the business rate system would be a good place to start.
The survey emphasised that as many businesses are continuing to struggle as a result of Covid-19 other sectors are bouncing back. Business and professional services companies had a far more cheery outlook with sentiment that the general situation would improve increasing from +31 to +63 per cent.
While the professional services industry is expecting volume growth of 30 per cent in the next quarter consumer facing businesses are facing a contraction of 10 per cent, the survey said.