Companies selling consumer services are seeing improved fortunes according to the latest research from the CBI.
The volume of business in the sector increased by 7% over the previous quarter mainly from hotels, bars and restaurants. At the same time, businesses providing services to other companies have seen their business volumes stabilise.
Although this should be seen as good news, the outlook for employment is not so promising. Both the consumer and professional services sectors are still trimming their headcounts.
The chief economic adviser to the CBI said that the results were consistent with their claims that whilst the economy is recovering slowly, there is still a way to go before we see an increase in growth.
In a separate survey run by the EEF, the manufacturers’ lobby group, both the electronics and motor industries have seen a rise in output over recent months.
UK manufacturers as a whole are a lot more optimistic now than at any time in the last 2 years. 9% of firms increased their output in the last 3 months; orders rose and although local demand declined there was an increase in export orders. Some of this increase is no doubt attributed to the weak value of sterling.
The EEF does however believe that we are not out of the woods yet. Profit margins have shrunk and business investment reduced by 5.8% in the final quarter of 2009. There are also a wide range of businesses that are struggling to increase their credit due to stricter lending criteria.
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