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Latest CBI study shows service sector optimism fall

26 May 2016

Professional service suppliers were slightly less optimistic about general business performance over the three months compared to the previous quarter, according to the CBI's latest quarterly Service Sector Survey.

However, consumer service companies showed an increased level of optimism, although this had risen at its slowest rate since 2013.

Overall, the survey of 175 companies suggests that employment growth, training expectations and investment intentions remain "robust", said the CBI.

Its survey showed a relatively small increase in business volumes for professional service firms over the last three months, which indicated stability after a sharp fall in the previous quarter.

For the consumer services sector, business volumes saw a reduced level of growth combined with a rapid increase in costs, resulting in declining profitability for the first time since 2013.

The survey also showed that volumes are expected to increase slightly in both sectors in the next quarter to August, while profitability is predicted to be flat for consumer services and improve slightly in business and professional services.

Both sectors saw a "strong" increase in employment numbers during the last quarter and this is expected to continue to grow for the next three months.

Those responding to the survey said they were slightly less concerned that labour shortages would limit business expansion over the next 12 months.

Spending on training has increased across both sectors, which is expected to continue through the summer months.

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