Consumer firms are recovering more quickly

COMPANIES that serve consumers directly – such as hotels and restaurants – are recovering more quickly than business-to-business suppliers such as law and accountancy firms, according to a report out today from the CBI.

In the consumer services sub-sector, the value and volume of business both rose slightly in the past three months – in part due to the rise in VAT – while business and professional services reported little change, the CBI said.

CBI chief economic adviser Ian McCafferty said: "Business activity has stabilised across the service sector. However, the fortunes of consumer services and business and professional services differ, with firms selling to households doing slightly better.

"Prices in the business and professional services sub-sector have continued to fall, reducing profits, and making conditions tougher."

He added that, overall, optimism was returning to the services sector.