Services sector business remains below normal, but less so than in the previous three quarters, according to the latest CBI Service Sector Survey.

The quarterly research, conducted between 29 July and 12 August, shows that in Business and Professional Services, the value and volumes of business rose very slightly on the previous quarter for the first time since May 2008, although both measures remain ‘below normal’, for the seventh consecutive quarter.

In consumer services, business values and volumes fell slightly, at much slower rates than in the previous three quarters.

Consumer services firms expect business values to stabilise and volumes to decline marginally, and in business and professional services they are expected to rise, with more firms predicting rises than at any other point since November 2007. However, in both sub-sectors both profitability and prices fell sharply.

Lai Wah Co, head of economic analysis at the CBI, says: “Business conditions remain difficult for service sector firms. They have had to cut the price of their services in order to compete for business, and this has pushed down their profitability further over the past three months.

“However, service sector activity has not been anywhere near as weak as in recent quarters and things are starting to look up, particularly for business and professional firms. These companies have seen an increase in business, albeit modest, for the first time in over a year and they are now feeling more optimistic.”