UK Service Sector Volumes Still Falling But Set to Level Off, CBI Figures Show

Business and professional services firms expect volumes to stabilise next quarter while consumer services face a further, smaller decline, according to the latest CBI Service Sector Survey.

More firms in the UK service sector are reporting falling business volumes than rising ones — and that’s been the case for several consecutive quarters, the figures show. The Confederation of British Industry’s Service Sector Survey, which measures net balances across business and professional services and consumer services, recorded an overall services balance of around -21 per cent in one recent quarter, with consumer services faring considerably worse at around -30 per cent or lower.

The CBI posted on social media that volumes declined at a slower pace in consumer services last quarter compared with the quarter before, while business and professional services fell at a broadly similar pace to the previous period. Next quarter, business and professional services firms expect volumes to stabilise. Consumer services firms, by contrast, expect another fall — but a more modest one.

For Kent, the picture is pointed. The county’s coastal and tourism-dependent areas — Thanet, Folkestone and Hythe, Dover, Canterbury — rely heavily on hospitality, leisure and visitor spending, exactly the kinds of activity captured under consumer services. Residents working in restaurants, hotels and attractions may face continued pressure on hours and hiring even as the pace of decline eases. Business and professional services firms in Maidstone, Ashford, Canterbury and Dartford could see conditions level off, which would help support office-based employment and demand for commercial space near the M2, M20 and High Speed 1 corridors.

Services output accounts for around 80 per cent of UK gross domestic product, according to the Office for National Statistics, and the South East — which includes Kent — has a chiefly high concentration of service sector employment. So national trends in this survey land harder here than in some other regions.

Yet stabilising volumes aren’t the same as recovery. CBI commentary has described profitability as under pressure across the sector, with cost growth remaining elevated and squeezing margins even where volumes hold steady. Employment balances in consumer services have been negative in several recent quarters, with business and professional services showing only flat or marginally positive readings. Some economists and commentators have questioned whether stabilisation alone is enough to support investment or meaningful pay growth — and the data, for now, don’t settle that argument either way.