Service sector companies enjoy growth but costs bite

Demand in the UK services sector held up in the three months to August, with volumes in business and professional services growing at the fastest pace in more than a year, a survey today suggests.

Consumer services firms including bars and restaurants reported steady quarterly growth. Picture: John Devlin

Business and professional services firms, which include accountancy, legal and marketing practices, reported that business volumes grew at the fastest rate since May 2016.

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Meanwhile, consumer services companies, such as hotels, bars, restaurants, travel and leisure, saw volumes rise at a similar pace to the last quarter, the CBI’s latest quarterly service sector snapshot reveals.

Business volumes are expected to accelerate in consumer services over the next quarter while business and professional services expect to see stable growth.

However, while optimism among business and professional services providers continues to improve, sentiment among consumer services companies deteriorated. Rising costs are eroding profitability in both sub-sectors.