Lockdowns hit sentiment in services sector - survey
By Abigail Townsend
Date: Friday 27 Nov 2020
(Sharecast News) - Optimism across the service sector tumbled in the last three months, hit by a resurgence in Covid-19 infections and fresh lockdown measures, a closely-watched survey showed on Friday.
According to the latest Quarterly Service Sector Survey from the Confederation of British Industry, sentiment about the general business situation across business and professional services firms came in at -21%. That compares to +9% in the three months to August.
Sentiment also declined among firms working in consumer services, coming in at -34% compared to -20% in the three months to August.
Volumes fell in both sub-sectors, off -21% in business and professional services, though that was a slowdown on the previous quarter's -32. Volumes are expected to fall at a slightly faster pace next quarter, however, at -25%.
Volumes also fell at a slower rate in consumer services, -42% compared to -64% previously, with the pace of decline set to pick up over the next three months, at -46%
Profitability continued to fall, and while employment dropped at a slower pace across the sector as a whole, the consumer services sub-sector reported the second sharpest fall on record, -56% compared to -63% three months previously. Headcount is forecast to drop at a slower pace in the next quarter, at -48%.
The CBI warned that the outlook for the next survey remained "challenging".
Ben Jones, principal economist at the business organisation, said: "Unsurprisingly, sentiment waned across the services sector as Covid's second waved crashed on UK shores. The worrying fall in service sector volumes profitability and employment continues.
"The impact has been more pronounced in consumer services, which have been hit the hardest by shifts in consumer behaviour, social distancing rules and the autumn lockdowns. But many business-facing services are also struggling from weaker demand, from recruiters and building managers to advertising firms, accountants and lawyers."
The November survey was conducted between 28 October and 15 November across 229 respondents.
Email this article to a friend
or share it with one of these popular networks:
You are here: news
10 Lower Thames St,
London EC3R 6EN