The latest quarterly survey of the industry by the CBI and PricewaterhouseCoopers shows that business volumes, profitability and confidence have all fallen for the first time in 18 months.
The survey goes on to say that the largest fall in business volumes was among building societies and life insurers with the sharpest falls in business also expected to continue in the same sectors.
40 per cent of firms said business volumes were down over the past quarter and 26 per cent said they were up. The balance of minus 14 per cent compares with plus 44 per cent in the previous survey and represents the first fall in business volumes for 18 months. Companies now expect flat volumes over the coming months.
Rachel Blackmore, external affairs manager at the BSA, was sceptical about the reflection of the survey towards building societies. She said: “This contradicts a very thorough report by KPMG only a month ago. They said that building societies were ‘punching above their weight’ in the market and we certainly have heard no concerns to the contrary.”
Lai Co, senior economist at the CBI, said: “The survey reflects the financial service sector trend over the past three months. 80 companies responded including 12 building societies. Out of all the services surveyed building societies came out with the most negative responses to the questions posed.”
Stewart Gunn, head of communications at the Dunfermline Building Society, said: “These findings are the exact opposite from our recent market experience. Lending has doubled over the course of the year and the investment side is booming.”
