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Strong employment growth in services sector

Employers in the business and professional services sector increased headcount at the fastest rate for seven years in the past quarter, according to a report by the Confederation of British Industry (CBI).

The Service Sector Survey is based on a poll of 136 companies in the business and professional services sector, as well as 79 in the consumer services sector.

Almost half (44%) of employers in the business and professional services sector reported employment growth from April to July this year, while only 11% said it had slowed.

Around two-thirds (63%) of employers within the sector expect to see further growth in the upcoming quarter and 36% do not predict any. A lack of available staff is seen as the main obstacle to expansion, with 45% of companies saying this is the biggest restriction.

Employment in the consumer services sector grew at a slower rate. Only 17% increased the rate of employment compared to 12% that saw it slow down. Again a lack of available talent is seen as the biggest challenge when trying to increase business, with 12% of employers citing it as the main obstacle.

CBI deputy director-general Katja Hall called the "upbeat feel" in the service sector encouraging.

"Employing more staff and planning to increase investment are positive steps in the quest for sustainable growth," she said.

"However, skills shortages mean it is increasingly hard for firms to find and hire the right people. It’s important that business and government address this issue together, to put the economy of the future on the right footing.”