Pessimism is growing in Britain’s service sector, according to a new report from the Confederation of British Industry.
The business body’s quarterly confidence survey (produced with Grant Thornton) registered a decline over the three months to February, reflecting increasing uncertainty over the direction the economy is taking.
This fall was particularly acute among consumer services firms. In this sector, the number of respondents saying they were less confident about the current business situation than they were in the last survey stood 41% higher than those expressing increased optimism. Three months ago, the gap was 31%.
However, confidence is holding up better at business and professional service companies (including ad agencies), where both the volume and value of business rose in the last three months and is expected to rise again this quarter. Among this group, the gap between the downbeat and the upbeat was just 13%.
“Despite low unemployment and interest rates,” commented Grant Thornton’s Scott Barnes, “the risk of war, predictions of a drop in house prices and a flat stock market are beginning to dampen consumer confidence and spending, which have been the main drivers of economic growth since 9/11.”
Data sourced from: Confederation of British Industry; additional content by WARC staff