LONDON (MNI) – The UK service sector had a mixed quarter with
business volumes among consumer services languishing and firms operating
in business and professional services seeing modest growth, according to
the latest quarterly CBI Service Sector Survey.

In consumer services, the volume and value of business have now
declined for five consecutive quarters, the survey showed.

Of those surveyed, 16% said volumes rose and 39% said they fell.
The resulting balance of -23% is lower than in February, and is the
weakest since November 2009.

Meanwhile, the decline in the value of business over the past
quarter to -16% was similar to the -15% reported in February’s survey.

In business and professional services, volume growth over the past
quarter (a balance of +5%) did not pick up as expected, but firms
predict much stronger growth in the coming three months (+20%). Firms
also expect a faster rise in the value of business next quarter (+20%).

Commenting on the survey, CBI Chief Economic Adviser Ian McCafferty
said:

“Business and professional services firms are feeling more
optimistic about their business situation. They have seen further growth
in the volume and value of trade in the past quarter, albeit fairly
modest, and these look set to strengthen in the coming three months,
with expectations the highest since 2007.

“Numbers of employees have also increased and are expected to
continue to do so. These are all sure-fire signs that business spending
is picking up, which will help drive the recovery,” he said.

“There is a stark contrast with the performance of consumer
services firms, however. This survey shows further evidence of weak
demand for consumer services in the UK, though firms expect that
conditions will not be as difficult over the next quarter.”

“When times are tough, consumers cut back their discretionary
spending on holidays, leisure pursuits and meals out, and we are seeing
that rising prices and squeezed incomes are holding back household
spending,” McCafferty said.

–London Bureau; Tel: +442078627492; email: ukeditorial@marketnews.com

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