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More finance job losses expected

John Murray
Sunday 17 January 1993 19:02 EST
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FURTHER job losses are expected in the financial services sector, despite an upturn in confidence, according to the quarterly survey of institutions by the Confederation of British Industry and Coopers & Lybrand, the accountancy firm.

The survey - which covers banks, building societies, insurance companies and other financial institutions - shows that a positive balance of 19 per cent of companies are optimistic about the overall business situation. This compares with a negative balance of 42 per cent at the time of the last survey in September and comes despite further falls in business activity in the last quarter.

That decline came despite indications in the last survey that the slowdown was flattening out.

Encouraging signs from the survey included indications that the incidence of bad debt was declining and that companies intended to spend more on average on marketing over the next three months.

But most companies still expect to reduce costs by cutting staff over the next three months.

The news from the life insurance sector was gloomy, with a balance of 4 per cent of respondents less optimistic about the overall business situation - the only sector to show a decline in confidence. In contrast, general insurers' levels of optimism increased dramatically, with a positive balance of 49 per cent expecting better times.

Optimism rose in the banking sector for the first time since the third quarter of 1991, reversing the serious deterioration in confidence in the last survey. Although banks reported that staffing levels will continue to fall over the next three months, they also indicated training expenditure would rise slightly.

Building societies reported that levels of business declined to an all- time low for the third consecutive quarter, but they expected a pick- up over the next three months.

However, securities traders, insurance brokers, fund managers and venture capitalist all reported higher levels of business in the last quarter, against the general trend.

More than 300 firms took part in the survey, carried out between 27 November and 16 December.

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