Despite the tough marketplace of the past quarter, numbers employed in Business & Professional Services grew (+10%) for a fourth quarter running, defying expectations of a decline (-11%). Firms expect headcount to continuing rising at a similar pace in the coming three months (a balance of +8%).

And the slowdown is not as rapid as previously predicted. Over the past three months business volumes declined at a slower pace (-11%) than had been expected (-20%). The decline in business values was more marked (-31%).

The February quarterly CBI Service Sector Survey was conducted between 30 January and 15 February, and covered 167 firms. Respondents are divided into Business & Professional Services, such as accountancy, legal and marketing firms, and Consumer Services, such as hotels, bars and restaurants, travel, and leisure.

Ian McCafferty, CBI Chief Economic Adviser, said: “Although volumes of business activity continued to worsen across the UK services sector in the past quarter compared with the previous quarter, there are some tentative signs that conditions may be levelling out. Firms providing business and professional services have seen business activity deteriorate, but not to the extent they had anticipated, and they too are expecting a more modest decline in the coming quarter.

“Business confidence remains fragile, and will continue to be so given the continuing uncertainty in the Eurozone. However, there are some signs that after the very sharp fall in confidence at the height of the crisis last autumn, sentiment is stabilising.”