Service Sector: Business Situation Hits Record High

In the service sector satisfaction with the current business situation soared, pushing the indicator to its highest level since the launch of the survey in 2005. At the same time, however, fewer service providers expected their current business situation to improve further over the next six months, which is hardly surprising given their very good order situation. The business climate indicator declined slightly, but remained at a high level. The service providers surveyed reported slightly more frequent increases in turnover over the last three months than previously. Overall, turnover was markedly higher than the previous year's level in December. Service providers were somewhat more cautious about their demand expectations. In view of their relatively high order backlog, however, they plan to continue to recruit more staff in the months ahead. Given reports on the positive developments in staff numbers in particular in recent months, service providers' personnel plans can be described as expansive. The key challenge will be the growing shortage of qualified workers, which was reported as a constraint on business activity by nearly one in three companies. More firms than ever expect to implement price increases for their services.