Profits continue to fall across UK service sector - CBI

28th Feb 2024 13:10

(Sharecast News) - The UK service sector continued to falter in February, an industry survey showed on Wednesday, as weak demand weighed heavily.

The latest service sector survey from the Confederation of British Industry displayed a mixture picture across the sector. Business and professional services firms thought the general business situation had improved slightly, with the net balance rising to 4 from -14 in the previous quarter.

Business volumes also returned to growth for the first time since June 2023, with a balance of 4, and were expected to pick up further in the coming quarter, with a balance of 12.

However, sentiment deteriorated sharply among consumer services firms. The net balance tumbled to -24 from -6, the fastest pace of decline since November.

Volumes also declined rapidly for the second month in a row, falling to -27 from -25. A net balance of -22 expect them to continue sliding in the coming quarter.

Profitability, meanwhile, fell across the sector, with a net balance of -15 for business and professional services and -36 for consumer services.

Charlotte Dandy, the CBI's economic surveys manager, said: "Our latest survey emphasises that firms continue to face challenging conditions, with profits falling for the ninth quarter in a row.

"Additionally, prospects for investment remain weak across the sector, with firms telling us that uncertainty regarding demand continues to be the greatest factor holding business back.

"At next week's spring budget, firms will be looking out for measures that build confidence to invest in our economic future and prop up the UK's labour market."

A total of 426 service sector firms were surveyed between 26 January and 14 February.