Optimism Among Service Sector Businesses ‘Down Sharply’

Written by: Keith Tully

Published: 26th August 2019

Hotel reception deskOperators within the UK’s service sector saw their sense of optimism for the future slump significantly during the three months to August, according to the Confederation of British Industry (CBI).

The CBI’s latest numbers suggest that sentiment within what is a crucial engine of the UK economy declined sharply in recent months, with “Brexit uncertainty” and “slower global growth” both cited as key contributing factors.

Figures point to declines in sentiment matching those recorded towards the beginning of 2019, which were the sharpest falls in positivity seen since 2016.

Optimism fell in the three months to August within both aspects of the services sector, namely the ‘business and professional services sector’ and the ‘consumer services sector’.

According to the CBI, expectations about business volumes among consumer service sector companies, which includes hotels, bars, restaurants and travel businesses, were weaker in recent months than they’ve been at any point since February 2012.

Meanwhile, business volumes were stable among professional and business service firms in the three months to August but their “profitability plummeted” during that same period.

In fact, profitability among the UK’s business and professional service companies, which includes lawyers, marketing firms and accountants, fell at the sharpest pace seen since November 2011.

In both areas of the wider service sector, positivity on the issue of business expansion is now in very short supply and the underlying conditions within the economy for service sector companies is described by the CBI as being “subdued.”

“UK services firms are operating in a tough environment: activity is sluggish and profits are expected to fall in the coming months. It’s little wonder that business sentiment has plummeted again,” said Rain Newton-Smith, the CBI’s chief economist.

Ms Newton-Smith went on to say that the British government should be doing its utmost to avoid a situation in which the UK leaves the European Union without a deal at the end of October.

“The idea of a no-deal Brexit is clearly weighing down the economy and is affecting businesses both big and small,” she said in a statement.

Keith Tully

Keith Tully

Join Keith Tully on Linked In Follow Keith Tully on Twitter

Keith has been involved in Business Rescue since 1992, during which time he’s worked for both independent and national firms. His specialties include company restructuring matters and negotiating with HMRC on his clients behalf.

Meet our Team of Experts
Director Support - Business suffering from Cash-Flow Problems?
If your company is financially distressed, we also offer the below services:
Business debt recovery

  • Recover Unpaid Invoices of £5k+
  • Expert Credit Control Services
  • Stop Late Payers & Bad Debts
Visit Site
Time to pay experts

  • Get Breathing Space with HMRC
  • Support with Business Tax Arrears
  • 35 Years HMRC Negotiation
Visit Site
UK Business Finance

  • Rejected for a CBILS Loan?
  • Get Emergency Business Funding
  • Supporting 1000+ UK Companies
Visit Site
Who we help
  • Company Directors
  • Finance Directors
  • Sole Traders
  • Accountants
  • Small Businesses
  • Large Businesses
  • Partnerships
Contact our team
Jonathan Munnery
Gillian Sayburn
Julie Palmer
or Find your Nearest Office

Here at Real Business Rescue we take your privacy seriously and will only use your personal information to contact you with regards to your enquiry. We will not use your information for marketing purposes. See PRIVACY POLICY

Business Rescue Advice for Directors
Free Guide for Limited Company Directors
Business Rescue Advice for Directors
  • How to manage company cash flow problems
  • Advice on dealing with HMRC
  • Understanding rescue and closure options
  • And much more...
Free Guide Download
Dealing with your Insolvent Clients
Business Rescue Guide for Accountants
Dealing with your Insolvent Clients
  • Helping you advise insolvent clients
  • Spotting signs of client distress
  • Exploring business rescue options
  • And much more...
Free Guide Download
Our numbers speak for themselves
Number of UK Offices
Directors Helped
Licensed Insolvency Practitioners

This site uses cookies to monitor site performance and provide a more responsive and personalised experience. You must agree to our use of certain cookies. For more information on how we use and manage cookies please read our PRIVACY POLICY