Professional services confidence rises but more support needed, sector warns

Professional services leaders’ confidence in future activity levels, new workflow and headcount growth has rebounded this year, following a slump in mid to late 2022. The findings come from the Professional Services Sector Trends Tracker, organised by the Managing Partners’ Forum. The confidence index is calculated from the net of those projecting expansion with those projecting contraction, with those projecting no change excluded. The index, which has been in positive territory since the announcement of an effective Covid vaccine in late 2020, reached 91% in January 2022. It then fell to 45% in October 2022 before jumping to 71% in January 2023. Despite this rebound in confidence, the professional services sector, which includes accountancy, is calling on the government to provide more support for businesses in the sector, warning its growth could “stall” if further macroeconomic uncertainty continues. As part of this, Haysmacintyre said the government should encourage businesses to invest in innovation, provide clarity on the EU Retained Law bill, deliver on promised post-Brexit trade deals, resolve strikes and maintain investment in education at all levels. Natasha Frangos, managing partner at Haysmacintyre, said: “Whilst professional services will continue to play its part in the UK's growth story by helping clients adapt to the economic environment and to position themselves for the future, we need the Government to support us and our clients in areas like encouraging businesses to invest in innovation, providing clarity on the EU Retained Law bill, delivering on promised post-Brexit trade deals, resolving strikes that impact the world of commerce and maintaining investment in education at all levels. “The professional services sector has the potential to keep growing in 2023 but could stall if the macro picture continues to be one of uncertainty.” Richard Chaplin, founder and CEO of the Managing Partners’ Forum, added: “The expertise of professional advisers will play a vital role in reviving growth in the UK economy through providing not only compliance services but also commercial advice that supports innovation and growth and helps clients fulfil their strategic goals – for example in relation to environmental and social sustainability. “Whilst sector confidence has markedly picked up in the last quarter, Government must not rest on its laurels in policy making to support this vital sector. With firms increasingly under pressure from resource constraints, the time is right for Government to address skills shortages through prioritising education in digital and interpersonal skills; clarifying pathways into the sector; and encouraging collaboration between sector firms, education providers, and local government.”