Business support jobs to implode by 2013, says CEBR

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More than 300,000 jobs will disappear in the business services sector by 2013 as contractions in both the private and public sectors take their toll, an economic think-tank will say today.

Advertising faces the biggest problems, with 15,000 jobs to go within four years, says the Centre for Economics and Business Research (CEBR).

Business services – everything from IT to law to architecture – has been one of the UK's economy's top-performing sectors for more than a decade, accounting for a third of all jobs created since Labour came to power in 1997. Between 2003 and 2008, employment rose by a fifth and output by 15 per cent. But the tide has turned, says the CEBR. Eight per cent of the sector's headcount will be lost before 2013, and productivity will fall by more than five per cent this year alone.

Law will remain relatively buoyant, just 4,000 jobs down by 2013. But real estate will lose 15 per cent, or 39,000 positions. And architecture, engineering and technical services will contract by 40,000, or nearly 10 per cent.

One of the biggest problems for companies will be the unavoidable straitening of the public finances and the effect on the significant portion of work contracted to the public sector.

Ben Read, a managing economist at the CEBR, said: "The business services sector, one of UK plc's leading lights in recent years, will find the operating environment for the next five years to be very different compared with the previous five years. Steep drops in business investment, the collapse of the property market and construction industry, upcoming cuts in public sector spending as well as continued difficulty for firms to find capital imply difficult times ahead for this sector."

The report comes after last week's revelation from the Office for National Statistics that unemployment amongst Britain's young people is running at one in five, and that is before the release of the latest crop of jobseekers from schools and universities this summer.