0800 644 6080
Call FREE from Landline and Mobile
Est. 1989

Optimism and Profits Down Across UK Service Sector

Written by: Keith Tully

Published: 29th May 2019

Optimism and Profits Down Across UK Service SectorService sector companies operating across the UK economy saw their profits slide and their confidence decline again during the three months to May.

That’s according to the latest quarterly survey of the sector carried out by the Confederation of British Industry (CBI), which also revealed that business volumes fell among service firms in the period.

Consumer-facing service businesses, who include hotels, bars, restaurants, as well as travel and leisure firms, became notably less positive in their overall outlook for the third consecutive quarter, the latest figures show.

Meanwhile, those consumer-facing operations also saw their profitability fall, on average, for the fifth consecutive quarter.

Among business and professional service companies, volumes fell at their sharpest rate since August 2012 in the most recent quarter and profitability is described as having “plummeted” at the fastest pace since November 2011.

Business and professional services as a sub-sector incorporates accountancy practices, legal firms and marketing companies across the country, and they are generally believed to be “extremely negative” about their prospects for expansion in the coming year, according to the CBI’s data.

A share of the blame for the challenges and negative outcomes being recorded across Britain’s services sector is being attributed to Brexit-related uncertainty.

“Brexit paralysis continues to take a toll on the UK’s services firms. Profits, optimism and investment spending are falling sharply amidst a torrid operating environment,” said the CBI’s deputy chief economist Anna Leach.

“Politicians have wasted six critical weeks, allowing uncertainty to tighten its stranglehold on the British economy. Business and the country need Westminster to rule out No Deal, and deliver an urgent resolution to the Brexit mess,” she added.

The CBI and its spokespeople have been consistently warning about the potential dangers of leaving the EU without a deal and urging the UK government to find some way of resolving the uncertainty that continues to surround the Brexit process and cause concerns for businesses.

Speaking recently after prime minister Theresa May announced her intention to bring a new EU withdrawal plan before the UK parliament, the CBI’s director general Carolyn Fairbairn described Brexit as having “left the economy stranded in no man’s land”.

“Businesses urge them [politicians] finally to find the spirit of compromise that has eluded them so far. Jobs and livelihoods depend on it,” she said.

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