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Grim results have been delivered by the service and infrastructure sectors supporting local government projects. Initiatives to deliver new IT systems and increased outsourcing of back-office services by the public sector has failed to stave off the full effects of the recession, according to a survey by the CBI. Research found demand for services such as management consultants was still flat. But professional services firms sounded a note of optimism, with 27% reporting business had improved since March. There was also a cautious prediction that the recession was now starting to ease. Ian McCafferty, the CBI's chief economic adviser, gave an upbeat assessment. He said: ‘Firms are less pessimistic than they were three months ago, and although the recession has deepened, business is not expected to decline at the same rate going forward as it has in the past six months.' It came as infrastructure firms reported maintenance and upgrade work had fallen to its lowest level for a decade, despite pledges by the Government to drive forward big projects, such as widening the M25. The Royal Institute of Chartered Surveyors (RICS) reported the biggest decline in activity – a drop of 34% – since its records began in 1998. Profit forecasts for the next 12 months registered a similar drop for key sectors, including transport and waste. Trouble had been heightened by problems in securing finances for the 2012 Olympic village – now resolved by the Government stepping in – and a lack of small works. The Government was urged to speed up plans to use £3bn of capital spending to fight the recession. Simon Rubinsohn, RICS chief economist said: ‘Public sector projects will play a key role in any recovery, as long as the finance is made available to prevent them from stalling.'

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BUSINESS

Outsourcers count cost of downturn

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