RTTNews - Business levels in the British services sector continued to be below normal in the third quarter, but not as bad as those were in previous three quarters, the service sector survey conducted by the Confederation of British Industries showed Monday.
The quarterly survey, conducted between July 29 and August 12 covering 184 service-sector firms, found that in business and professional services, the value and volumes of business both rose very slightly on the previous quarter for the first time since May 2008. However, both measures remain below normal for the seventh consecutive quarter.
In consumer services, business values and volumes fell slightly, at much slower rates than in the previous three quarters.
Service sector activity has not been anywhere near as weak as in recent quarters and things are starting to look up, particularly for business and professional firms, Lai Wah Co, head of economic analysis at the CBI said.
CBI's forward-looking indicator showed that firms in consumer services expect business values to stabilize and volumes to decline marginally in the next three months. In business and professional services, they are expected to rise, with more firms expecting rises than at any other point since November 2007, the CBI said.
We are still seeing consumers rein in their spending on services, but no longer at rapid rates. And across the service sector, prospects for business expansion and investment are the least gloomy for some time.
However, the survey revealed that firms' profits have been hit by falling prices in the sector.
In consumer services, 32% of firms cut prices and just 11% raised them, giving a balance of minus 21%, the lowest since the survey began in 1998. The balance for business and professional services was lower still at minus 31%. In both sub-sectors, firms expect prices to fall, but at slower rates, over the next three months.
Employment in the services sector was stable in consumer services, but continued to fall in business and professional services. In the latter, employment fell for the fifth successive quarter, but the rate of decline has moderated from the very steep falls seen earlier this year.
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