Finance Industry Recession Hits Jobs

Article excerpt

Byline: Steve Pain

The country's financial services industry is in recession for the first time in ten years, according to research released yesterday by the CBI and PricewaterhouseCoopers.

And the two consecutive quarters of falling output have prompted companies to reduce their cost bases, with job cuts running at the highest rate for six years.

David Waller, Midlands chairman of PwC, said: 'A second quarter of declining profitability has triggered a sharp fall in business confidence, made worse by uncertainties about the future outlook.

'The extent of job cutting suggests that companies believe an upturn is not imminent,' he added.

The quarterly survey found that 43 per cent of firms had cut their staff numbers during the first quarter, compared with just 13 per cent who had increased them.

This gave a balance of minus 30 per cent, indicating jobs were cut at their fastest rate since September 1996.

Around 40 per cent of firms also said their volume of business was down during the past three months, while 28 per cent said it was up, giving a balance of minus 12 per cent, which is the weakest figure since December 1992.

Overall companies said business levels were well below normal.

In the face of declining levels of business, weak stock markets and global tensions, optimism among financial firms nosedived, with 55 per cent of companies less optimistic than theywere three months ago, while just four per cent said they were more optimistic. …