London: Job losses in the service sector are expected to increase significantly in the coming months as firms predict steep fall in their volumes and profitability in the next quarter, the Confederation of British Industry said.
Summarising the latest service sector survey by CBI, Chief Economic Adviser Ian McCafferty said, “So far, job losses have been relatively small across the whole of the service sector, but with firms predicting faster falls in volumes, values and profitability in the next quarter, we can expect to see significant job losses in the coming months.”
Firms providing services to businesses saw their volume, profitability and people employed fall at record rates, the sharpest declines since the survey began in 1998, CBI said.
Companies are also cutting investment plans sharply as worries about future demand intensified, it added.
Besides, firms operating in consumer services saw profitability fall sharply for a third successive quarter, while the workforce grew slightly for the first time in a year, businesses are predicting much larger cuts to their head counts in next quarter.
Meanwhile, the volume of business at hotels, bars and restaurants was almost flat in the three months to November. It, however, saw a strong growth in staffing numbers for the first time in a year, which is predicted to worsen significantly in the next three months, the CBI survey said.