Firms that offer professional services and business services have seen their business continue to grow at a rate that is faster than what was seen during the middle of 2008 before the recession according to last quarter’s survey of the services business sector. What was seen was that even in the face of an increase in costs profits finally stopped falling.
The news was not so good for consumer service firms that include travel companies, hotels, and restaurants as they continued to struggle barely keeping their heads up over the last quarter and ever since the recession hit.
Also suffering are consumer based businesses as Britons are noticing that their budgets are tightening as a result of inflation and salary freezes while still facing austerity cuts from the Government.
There were 170 service business firms included in the survey which makes up about ¾ of the output from the UK which may show that the economy is not stabilizing due to its own household’s spending, but instead from the spending of consumers outside of the country.
Chief economic advisor for the CBI, Ian McCafferty, stated that while consumer spending is still tight due to the tight incomes and inflation, there are still signs that business spending is starting to increase which is helping to build the market without any dependence on consumer growth in order to do so. Most businesses in the survey expect that the sector will remain flat over the next quarter.