CBI: Firms business volumes 'falling back'
CBI: Firms business volumes 'falling back'
Monday 11th January 2010
There has been "disappointing" activity in the financial services sector with no further growth expected in early 2010, a new report has claimed.According to a quarterly study by the Confederation of British Industry (CBI) and PricewaterhouseCoopers (PwC) the modest growth seen in the last quarter was less than expected.
The CBI/PwC report said firms expect volumes of business to fall in the coming quarter. Business volumes rose slightly in the quarter to December, with profitability up, helped by cost reduction and increased spreads; but the modest growth was "less than expected" the report said.
Ian McCafferty, CBI chief economic adviser, said: "The bounce in UK financial services activity over the past six months is not expected to last as we enter 2010. Firms see their business volumes falling back again, with no further improvement in profitability over the next three months.
"On a more positive note, financial services firms' confidence in the general business situation has continued to increase, profitability improved and a much slower reduction in numbers employed was seen in this survey. Job losses are also expected to be minimal in the coming quarter."
Asked how their business volumes fared in the three months to December, 32 per cent of businesses said that volumes rose, while 28 per cent said they fell. The resulting balance of four per cent is slightly lower than September's seven per cent, and less than the expected 16 per cent.
A balance of 13 per cent of firms expects a reduction in business volumes over the coming quarter – the most negative expectation since December 2008, the report found.
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