A dip in confidence across the services sector will limit growth heading into the new year, according to a wide ranging business survey.
High demand going into the pre-Christmas period for leisure, hotels and professional services was unable to maintain the buoyant confidence levels seen earlier in the year, the CBI said in its quarterly report on the sector.
A price freeze will also dent the profitability of business and professional services as intense competition limits inflationary pressures, it added.
But the overall growth of the sector was assured, it said, following a long period of expansion and healthy employment numbers.
Rain Newton-Smith, CBI director for economics, said there were encouraging signs that firms had increased investment in IT and skills, though skills shortages were beginning to limit the room for many firms to expand.
She said: “Growth across the services sector is expected to continue into the new year. And it’s good to see investment spending in IT at near record levels.
“But skills shortages are starting to bite, putting more of a brake on investment and future growth in consumer services. Therefore the spending rise in training in the sector is particularly encouraging.”
Many of Britain’s key industries have reported skills shortages over the last six months as the unemployment register has shrunk and employment levels hit all-time highs.
via The Guardian