Service sector sales drop

Sales in the service sector dropped for the sixth quarter running, says the Confederation of British Industry (CBI).


Sales in the service sector dropped for the sixth quarter running, says the Confederation of British Industry (CBI).

Sales in the service sector dropped for the sixth running quarter, says the Confederation of British Industry (CBI).
 
Profits were also down, with 48 per cent of companies seeing profits fall, compared with 21 per cent reporting an increase.

Ian McCafferty, CBI chief economic adviser, says: ‘The recent weakness in the service sector is disappointing, particularly as business and professional firms had hoped conditions would strengthen this quarter. This confirms the weakness reflected in third quarter GDP data and underlines the fragility of the economic recovery.’

The average selling price of the 179 firms surveyed dropped by 4 per cent in the three months to November.

Adds McCafferty: ‘Consumers and businesses are continuing to cut back on spending on goods and services, and firms operating in the sector are responding by cutting prices to stay competitive. It is worrying that so many firms cite the ability to raise funds as a constraint on future investment and business expansion.’

According to a survey by the British Chambers of Commerce, a third of businesses found it more difficult to access finance over the last three months than the previous quarter.

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