You are here > Home > News
CBI reveals profits downturn in professional services
Accountancy News |
08/09/2010
The profitability of the professional services sector, which includes accountancy providers, dropped between June and August, it has been reported.
According to the Confederation of British Industry's (CBI) Service Sector Survey, business levels remained well below average during the quarter.
Some 13 per cent more companies said they witnessed a fall in business value than those who experienced a rise.
The volume of business also fell in real terms, although the CBI survey showed a positive balance of two per cent due to reclassification of the index structure.
A 16 per cent drop in selling prices was witnessed, however, total costs per person employed rose by eight per cent, eating away at firms' bottom lines.
CBI chief economic adviser Ian McCafferty commented that activity across the economy is patchy, with some sectors doing better than others.
He suggested that such conditions were likely to continue into next year.
"Firms selling to business and professional firms have seen their volumes move sideways over the past three quarters, and no growth is expected over the next three months," Mr McCafferty said.
"Unsurprisingly, business confidence in this sector has fallen for the first time in over a year."
He claimed that the precise impacts of public sector spending cuts will not be seen until after the autumn's Comprehensive Spending Review.
"In the meantime, there is uncertainty about the strength of demand in the coming year, and services firms are not optimistic about prospects for business expansion," Mr McCafferty added.
Last week, Stephen Overell, associate director of The Work Foundation, claimed that government spending cuts are set to have severe impacts on the UK's economic recovery.
Posted by Stephen Wilkinson
------------------------------------------------------------------------
Accountancy Recruitment Agency - Transparent Recruitment Fees Since 1999 - 12.5% Fee / 3 Month, 100% Rebate.
Sign up to our e-newsletter service to receive our headline news directly to your inbox
