"Business sentiment and activity dropped further across the services sector in the quarter to November, according to the CBI's latest Service Sector Survey. Business volumes dropped sharply across both sub-sectors, marking over a year of declines. Meanwhile, average selling prices were unchanged despite cost growth remaining elevated. Notably, this is the first time the sector hasn't witnessed growth in selling prices since the first half of 2021. As a result, service sector profitability and employment fell sharply, particularly in consumer services."
"Looking ahead, service sector firms are set to see volumes decline again over the next quarter, albeit at a slower pace in business and professional services. Cost growth is expected to remain broadly the same and consequently, selling price growth is expected to return in the three months to February. Nevertheless, with the rise in costs expected to outpace selling price inflation again, profits are expected to fall significantly - albeit at a slower pace in business & professional services."
"With conditions remaining challenging in the services sector, firms remain pessimistic regarding their plans for investment over the year ahead. All investment categories are expected to be cut back in both sub-sectors, except for IT in consumer services where plans are set to remain unchanged. Uncertainty about demand remains the main limitation to capital spending across the services sector, while financial concerns have grown, particularly in consumer services."
Business sentiment and activity in the services sector fell in the quarter to November, with business volumes dropping sharply across both sub-sectors and marking over a year of declines. Average selling prices were unchanged while cost growth remained elevated, the first time without selling-price growth since the first half of 2021. Profitability and employment dropped sharply, particularly in consumer services. Firms expect volumes to decline again next quarter, softer in business and professional services. Cost growth is expected to stay broadly the same, prompting selling-price growth to return but with costs outpacing prices and profits falling. Investment plans are pessimistic, with cuts across most categories due to demand uncertainty and financial concerns.
Read at London Business News | Londonlovesbusiness.com
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