CONSUMER-facing firms such as hotels and restaurants enjoyed a sharp upturn in business in the past three months, helping Britain’s dominant service sector post solid growth and regain confidence.
The latest quarterly survey by the CBI, published today, shows the consumer sub-sector made up for weaker-than-expected growth in business and professional services and helped optimism rise across the board at the fastest rate in three years.
Consumer services businesses such as hotels, bars, restaurants and the travel and leisure industries saw their first rise in profitability since the financial crisis, and confidence levels made their biggest single-quarter gains since 1999. Business volumes rose at their fastest pace since August 2007.
The CBI’s director of economics, Stephen Gifford, said: “There appears to be a sense of growing confidence in the service sector. We’ve seen some turnaround in activity this quarter, and a more positive outlook for the next.”
Gifford said it was promising that consumer services have seen growing activity and expect it to continue, pointing to a greater willingness from people to go out and spend. But he warned: “There is concern around getting access to finance, so it’s vital that growing firms look at the full range of funding options on the market.
“Conditions remain tricky, with consumers still grappling with a squeeze on real incomes, and business confidence vulnerable to any adverse developments in the global economy.”