Service sector firms fret over gloomy outlook

HOPES that activity in Britain’s massive services industry would pick up over the summer were dashed this morning when fresh data revealed pessimism has returned among firms in the sector as the eurozone debt crisis has a knock-on effect on consumer spending.

Accountants, lawyers and other professional service providers reported a drop in the amount of work they have carried out in the past three months, compared with previous expectations for a rise.

Hotels, restaurants and other consumer services businesses also reported a fall in both the value and volume of their work having previously forecast rises, according to the CBI, which compiled the quarterly report.

Further gloom came yesterday from Germany, where business sentiment fell for the fourth month in a row, dropping to its lowest level since March 2010 as the eurozone debt crisis and a slowdown in China took their toll.

Meanwhile, analysis of major retail insolvencies since 2011 – including Aquascutum, Blacks and Clinton Cards – claimed that 53 per cent of jobs are preserved during the insolvency process, according to insolvency practitioners trade body R3, which carried out the study.

R3 Scottish council member John Hall said: “These figures show the insolvency process, while never good news, can result in significant parts of the business surviving. Store portfolios are simply too large at present, so shedding some unprofitable stores is part of this evolution.”