Service Sector: Business Climate Deteriorates Slightly

In the service sector fewer service providers were positive about their current business situation. The business climate indicator nevertheless reached a very high level. The above-average confidence levels seen in the last two months continued to prevail in October. Overall, the business climate deteriorated slightly, but remained at a high level. Service providers still expect turnover to rise in the months ahead, meaning that the trend in turnover seen over the past few months will continue in the near future. Thanks to a further improvement in the order situation, service providers plan to recruit more staff. One in two service providers, however, reported constraints on business activity. Capacity utilisation reached its highest level in over two years and almost 6% of the companies surveyed were affected by capacity bottlenecks, representing a new record high. Almost one in three companies also reported recruiting problems and one in five companies were unable to recruit enough skilled workers. A growing number of service providers plans to implement price increases.