UK Services Shed Jobs, Advertising Hard Hit
The UK business services sector will lose more than half of the jobs it gained during the last five years by 2013, a report by the Centre for Economics and Business Research showed Monday.
The sector, which relies on the investment cycle, discretionary budgets and public sector spending, will lose 334,000 jobs from 2008 to 2013, according to the leading economics consultancy.
Public sector expenditure set for cutbacks from 2010 onwards will make the prospects for business services "necessarily diminish as well," the CEBR report explained.
"Steep drops in business investment, the collapse of the property market and construction industry, upcoming cuts in public sector spending as well as continued difficulty for firms to find capital imply difficult times ahead for this sector," Ben Read, a managing economist, at CEBR said.
Business services jobs increased by 616,000 from 2003 levels to 2008 levels and signaled that there will be 311,000 fewer business services jobs in 2013 compared to 2008, the report showed.
The sector reversed its initial strong performance in the UK economy, where it had contributed around a third of all new jobs created and 5 percent per year GDP growth since 1997.
The worst hit sector will be advertising, due to a prediction that there will be a continued trend of job cuts stemming from falling revenues in this area, the report said.
The Advertising Association showed revenues in 2008 were down by 3.9 percent year on year compared with a 4.6 per cent increase in 2007.
Other sectors include real estate activities, IT services, accountancy and audit and R&D services, according to the CEBR report.