Wealth buildingUK service industries: A case of first out last in
The initial fury of the current recession appears to be waning, and the World seems to be now well aware of what is required to control and contain it. There is a mood of cautious optimism around and the light at the end of the tunnel seems to be shining bright and clear. However when will we know when the global downturn is behind us? The answer is when the UK service industry gets back to full steam.
It is both logical and inevitable that when any form of cutbacks need to be made in the private sector, the first port of call for the red pen is in services and the last place where the doors to the personnel department swing open is in the service sector. And in this global recession, the worst in living memory, this also appears to be the scenario.
According to a recent survey taken during the last quarter, firms in the service sector, including both the professions and leisure sectors, are being especially hard hit and redundancies are way above the national average.
According to a representative of the Confederation of British Industry (CBI) the cut back in spending both by British consumers as well in the business sector is down to levels not seen for decades, and jobs are being lost at an ever increasing pace. The chances of a recovery in the services sector seems far away and the chances of job levels returning to where they were even a year ago is almost impossible.
With the UK man in the street looking only to survive the downturn, the areas of expenditure that they have down on first and most severely is on personal spending for such luxuries as holidays, entertainment and leisure. And these are the sectors that have been hardest hit. Office staff, particularly in low level administration positions, has also been particularly vulnerable, as companies look to cut costs. Outsourcing has made a strong comeback as well as companies applying pressure on existing employees to work harder and more hours to take up the slack.
Sharp falls in volume and profit have been gradually taking their toll with companies scaling back on investing for the future, with services and jobs suffering. The feeling is that a lack of demand is likely to prevail in the service sector for at least the next 12 months, fired by uncertainty and the lack of liquidity that the current credit squeeze is causing.
As things gradually improve within the economy, then some time in the spring of 2010, job opportunities may return.
This article was written by eCommerce Associates for Bank -- Accounts and our Finance Blog