Foot and mouth to cause redundancies over the summer

Employment in the tourist industry will fall in the coming months
due to the foot and mouth crisis, according to CBI research.

The joint CBI and Deloitte & Touche service
sector survey shows that both business trading and confidence for the next few
months drops significantly. Foot and mouth has had a serious impact on several
consumer service sectors dependent on tourists, claims the research.

Employment in the service sector was unchanged over
the past three months, but companies in the hotel, coach service and travel
operator sectors expect that employment will fall markedly over the next
quarter.

More than a third of service sector firms considered
the volume of their business to be below normal.  Furthermore, profitability among consumer services is expected to
decrease at a faster rate over the next three months.

“Confidence has been hit by the expectation that the
foot and mouth outbreak will have a wider and more prolonged effect on consumer
services,” said CBI’s associate director of economic analysis Sudhir Junankar.

The survey of 236 firms was carried out in May 2001.

www.cbi.org.uk

By Karen
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