Light at the end of the tunnel for finance firms
Hopes of an economic recovery have been raised by news that the financial organisations have seen a net rise in business levels for the first time in two years. In the latest Financial Services Survey conducted by the CBI and PricewaterhouseCoopers, 32% of firms said their business volumes had risen in the last three months. 24% said that their volumes had decreased during the period, meaning a net balance of seven per cent of firms saw an upturn. While levels of business are still considered to be below normal levels, the results are a boost, coming after two years of falling volumes and profitability in the financial services sector. It is the first increase the survey has recorded since September 2007, when a net balance of 23% of firms reported growth. "After nearly two years of exceptionally tough operating conditions, signs of a brighter outlook are appearing in the financial services sector," said Ian McCaffrey, CBI chief economic adviser. "Business volumes have increased for the first time since the onset of the credit crunch, and a fall in running costs helped lift profitability. This is concrete evidence of the gradual path to recovery that firms were anticipating in our June survey of the sector." Securities traders and investment managers recorded strong growth in the quarter, while banks and building societies indicated growth was expected over the coming three months.