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Households ''still reluctant to spend on services''
Contractors working with service sector companies may have been caught in an unexpected drop in profitability in the past few months, according to the results of a new survey.Research carried out by the Confederation of British Industry (CBI) found that, between July and August, the levels of business for the country's service sector firms were "well below normal".
These results come despite a recent survey released by the organisation which indicated that rising levels of demand and increased stock had stimulated production by the country's small manufacturers.
Economic adviser for the CBI Ian McCafferty predicted low growth levels for the upcoming months.
"Although our recent surveys have shown increased sales of high street goods, this survey shows that households are still reluctant to spend on services. Conditions remain difficult for consumer-facing firms," he said.
He went on to express uncertainty about the impact which impending public sector cuts will have on UK firms, but claimed that service sector companies were "not optimistic" about their future prospects for expansion
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By Helen Smith
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