Survey results released this week by business lobbying organisation, The Confederation of British Industry (CBI), show improvements in the retail and service sectors for the third consecutive quarter.
According to the latest reports from the quarterly Distributive Trades Survey, retail sales grew at the fastest pace since June 2012 – exceeding expectations and giving retailers a glimmer of hope.
Similarly, the Service Sector Survey showed increased activity across both the hospitality and professional industries with the fastest growth seen since this survey began in 1998.
Hope for the High Street?
The survey of 120 firms highlighted an increase in growth and investment opportunities for the year ahead.
While grocers, clothing, furniture and carpet retailers, along with motor traders and wholesalers, had strong sales, specialist food and drink retailers experienced a dip for the second month in a row; although this was said to be consistent with expectations for this time of year. Despite these signs of growth, employment levels have decreased and are anticipated to fall slightly again next month.
Barry Williams, Asda Chief Merchandising Officer for Food, and Chair of the CBI Distributive Trades Survey Panel said there have been healthy signs of more resilience and increased consumer spending. He said: “Although we are by no means seeing a universally confident shopper, the positive indicators have perhaps given some people the urge to spend.
“Overall sales have been remarkably resilient in the face of disruption from the exceptional weather across the UK, which has badly affected many families and businesses.”
Increase in profit and employment in service industries
Out of 139 businesses surveyed in the service sector, including hotels, bars, restaurants and travel companies along with accountancy, marketing and legal firms, the results showed increased activity and intentions for future expansion. There was also an increase in employment and business volumes rose at the quickest pace since 2005, resulting in improved profitability for the first time since 2007.
Anna Leach, CBI Head of Economic Analysis, said: “It is encouraging that strong growth is being reported across the whole sector. Headcount is predicted to rise next quarter and expectations for an expansion of business over the year ahead are the strongest for a decade.
“As the recovery gets more firmly entrenched, there are positive signs that 2014 could be a good year.”