According to a recent Confederation of British Industry (CBI) survey, it’s been a dismal start to the year for the service sector, with optimism across the service sector falling sharply in the three months to February, while business volumes and profitability continuing to fall.
The quarterly report revealed that in the business and professional services sector, which includes accountancy, legal and marketing firms, optimism fell at the fastest pace since the financial crisis. In the consumer services sector sentiment deteriorated at the fastest pace since August 2016.
Rain Newton-Smith, CBI Chief Economist, says: “With just over one month until we leave the EU, the effect uncertainty is having upon the sector is unmistakeably negative. Volumes and profits continue to fall across both services sub-sectors, while optimism has fallen at the quickest pace since 2009.
“Dimmed expectations for the year ahead mean it’s more important than ever for the UK to avoid a no-deal scenario, which would create a perfect storm of issues for our world-leading services firms.
“Until politicians can agree a deal that commands a majority in Parliament and is acceptable to the UK and protects our economy, sentiment will continue to deteriorate.
“It is essential politicians act to remove the cliff edge from a sector that provides so much of Britain’s prosperity.”
In this rapidly changing economic landscape, it is essential that all business owners and managers be aware of income and expenditure by keeping proper records and monitoring trends and patterns. Profit and loss accounts will help you understand how your business is progressing, as well as alert you to any potential issues which might arise, giving you ample warning to rectify the problems or make the necessary adjustments to keep your business on track and successful.
At Beavis Morgan, our specialist advisers to SMEs are available to provide general business guidance and to structure your business for tax. We can also assist with long and short-term forecasts, budgets, business plans, sensitivity analysis, and calculating and checking compliance with covenants.