By Ron Coates, 8 March 2004 16:20
NEWS The UK's business and professional companies are expecting their best time for five years, according to a CBI survey.
Companies are preparing to start IT spending and hiring next quarter and there are already fears that skills shortages could limit growth.
Steve Edmonds, head of entrepreneurial business services at accountancy firm Grant Thornton, said, "there is real evidence of an upturn in the services sector. We've always felt that investment intentions are a good indicator and that planned in IT is certainly the first real positive indication of investment.
"And, on the business side, we see the first positive figures for employment in computers and telecoms for four quarters - it's an upswing."
Edmonds added that the survey, sponsored by Grant Thornton, showed that recruitment companies' confidence had jumped from an index of 40 to 60 and that consultancies' stood at 61.
He said: "The recruitment agencies are seeing a slackening of demand in the public sector and strength in banking, finance and IT. They are already concerned that the skills shortage could limit growth."
Companies now expect the largest rise in employment since May 2001, and while they may be prepared to splash out on IT and staff, they are cutting back on land and buildings. They expect an increase in both the volume of business and in profitability.
Another report from the Centre for Employment and Business Research found that City firms were hiring back the people they have been sacking for the past two years. The survey expects that the headcount could reach a record high by mid 2006.
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