The CBI yesterday predicted that growth in the UK economy would “ease” in the second half of the year.
The comments from the business body which has more than 190,000 members across the UK came as the group released its latest quarterly services report, which showed the powerhouse sector had “slowed somewhat” in the three months to August.
The survey found that growth in business volumes eased compared with recent quarters, while profitability rose at a slower pace than in the three months to June, when it reached a multi-year high.
However, CBI deputy director general Katja Hall said the data did not mean the recovery had stalled altogether, but rather pointed to a levelling of the long-term growth trend.
The study, which took into account the views of more than 200 firms, also found that levels of optimism had increased overall and that business volumes were expected to return to levels seen earlier in the year in the coming quarter.
“The slowing in the pace of growth and profits in the service sector reflects our view that momentum in the economy will ease in the second half of the year,” Ms Hall said.
“But this doesn’t necessarily mean a gear change in the recovery. It’s encouraging that our service sector firms continue to feel upbeat, especially when looking ahead to the next quarter.”
On a sectoral basis the business and professional services firms which responded to the survey reported a slowdown in work and a decrease in profitability growth to the lowest level this year, with no immediate upturn expected.
However, recruitment remained strong. New staff engagement was running at the highest level for almost seven years during the quarter, despite concerns about a looming skills shortage.
In consumer services, business volumes slowed sharply in the period in a move that defied City expectations for a significant improvement.
Employment growth slowed in the period but companies remained confident in their longer-term outlook, with “notably strong” investment intentions for the year ahead.
Ms Hall said concerns over the availability of qualified staff to fill roles as they became available remained a major concern for firms.
“Employing more staff and planning to increase investment are positive steps in the quest for sustainable growth,” she said.
“However, skills shortages mean it is increasingly hard for firms to find and hire the right people.
“It’s important that business and Government address this issue together, to put the economy of the future on the right footing.”