BusinessCompany NewsPlans in place for downturn

Plans in place for downturn

Accountancy firms have confirmed contingency plans are in place to deal with the fallout of the economic downturn as confidence and output drops in the professional services sector.

Quarterly sector research by the Confederation of British Industry and Deloitte & Touche this week revealed that employment in professional services fell for the first time since the survey began in 1998. The trend is expected to continue.

It soon emerged that plans for a worsening economic climate are in place and widespread, a development that follows scores of redundancies across the Big Five firms.

Grant Thornton said it was prepared to take action if the economy worsened. ‘Contingency plans will be implemented if there is a marked further deterioration in economic confidence,’ said a spokesman.

Output in the professional service sector fell in the last quarter with expectations of worse to come. It was down to a balance of minus 14% for business and professional services compared to plus 3% in the last survey.

Sudhir Junankar, the CBI’s associate director of economic analysis, said: ‘The downturn in the service sector has deepened, with business activity dropping particularly sharply in consumer services.

‘For business and professional services, however, the pressure is set to intensify into the New Year.’

PricewaterhouseCoopers said: ‘It was best practice to maintain a staffing level and skills set that meet our business and client needs.’

A third consecutive fall in business confidence has been partly linked to the impact of the 11 September attacks, according to the quarterly survey.

Business confidence in the professional services sector dropped to a balance of minus 50%. The downward slide is expected to continue over the next three months.

Prices in professional services fell in line with expectations. Further falls are expected across the whole sector in the coming months.

A spokesman for Ernst & Young said: ‘The continually changing situation means we are keeping our eyes on things.’

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