Employment
levels in the tourist industry will tumble in 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 will drop
significantly.
The epidemic had a serious impact on several consumer service sectors
dependent on tourists, claims the research. Companies in the hotel, coach
service and travel operator sectors expect that employment will fall markedly
over the next quarter.
John Philpott, chief economist for the CIPD, said, "The tourist side is
a fair reflection of what has been going on. But the real downside is the
impact of people not going into the country in the summer which will be felt in
early autumn.
"In terms of employment in the tourist industry, there were predictions
of up to 100,000 job losses, but I suspect the figure is around 25,000 to
50,000 losses."
Philpott is surprised at the research’s finding that more than a third of
service sector firms considered the volume of their business to be below
normal.
He said, "It must be a confidence thing, as the UK economy hasn’t
slowed down markedly and we have been helped by falling interest rates."
The report suggests that profitability among consumer services is expected
to decrease at a faster rate over the next three months.
The CBI’s associate director of economic analysis Sudhir Junankar said,
"Confidence has been hit by the expectation that the foot-and-mouth
outbreak will have a wider and more prolonged effect on consumer
services."
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The survey of 236 firms was carried out last month.
By Karen Higginbottom
