Financial services employment booming

Jul 05 2004 by Brian Amble Print This Article

Financial services companies increased staff numbers in the past quarter at the fastest rate for at least fifteen years, according to new figures - but business may have peaked for now.

The latest quarterly survey of the industry by the CBI and PricewaterhouseCoopers shows that just five per cent of companies in the sector reduced employment between March and June while 41 per cent took staff on.

The balance of plus 36 per cent is the highest since the survey began in 1989 and is a huge rise on the plus five per cent balance in the first quarter of this year.

More than half (53 per cent) of firms said volume of business was up in the quarter with only nine per cent saying it was down, the highest balance for four years.

But volumes are expected to fall modestly over the next quarter, the first time falls have been expected since March 2003.

The expectation that activity levels may have peaked for now is reflected in business optimism. On balance respondents are still more optimistic about their business situation than three months ago but the rise was less marked than in the previous three surveys.

However, it appears activity levels may have peaked with only marginally more respondents more optimistic than less optimistic about their business situation than there were three months ago.

Ian McCafferty, CBI Chief Economic Adviser, said: "The financial services industry has had a really strong twelve months and the recovery, which began this time last year appears to have reached a short-term peak.

"The fastest growth in business for nearly five years has led to a rapid pick up in financial services jobs. The expectation that future growth is unlikely to repeat the rapid recovery of recent months is not surprising but implies that profitability will grow more slowly next quarter."

The strongest employment growth was among fund managers, general insurers and building societies. Only life insurers reported they had cut staff.