Services
Market Overview
The economy will affect each Services sub-sector in a different way and at different times. The current global downturn has meant that the economy as a whole has struggled and shares, particularly in the financial services sector are under pressure with the value of companies being significantly reduced.
Professional Services
The professional services sector ranges from the largest multi-national, global financial institutions to the individual management consultant working form home. There is also a diversity to which the different types of businesses are regulated by professional bodies. The Law Society is very stringent on how it governs solicitors whereas there is less control in areas such as recruitment consultants.
Despite a certain amount of fragmentation within this area there is a commonality for insurance needs as the majority of companies tend to be partnerships or sole traders, they have very few employees and conduct the bulk of their business with other businesses.
This sector has grown in recent years but recent signs are showing that the growth is slowing. This is in the main due to the technology and dot.com boom and bust and the global market conditions.
Media
The media sector is very technology driven and there is extensive use of specialist equipment away from the premises. There is a culture of working to tight deadlines as there are many factors that could affect a photoshoot or advert being shot outside. In addition, decisions are often made at the last minute to re-shoot. Due to this revisions to insurance requirements are required urgently.
The global downturn has had it affects in this sector with many companies downsizing their marketing budgets as they decide to hold back on promotion in hard times.
Other Services
Many companies cannot afford to operate ancillary services, such as cleaning, maintenance and catering and increasingly these services are outsourced to specialists. Many small start-up companies have sprung up to carry out this work and they often comprise of people who were once employed by the larger company but now carry out the work on a freelance basis.
Summary
The underlying theme of the Services sector is that it is in good shape and looks set for recovery once the economy bounces back.
Consumers and businesses are spending more on services as there is a greater demand for advice and legal services. In addition, as more companies look to outsource non-core activities consultancy and training type companies will continue to grow.
The development of new technology and the opportunity to reduce distribution costs are continually creating change in many service sectors. More and more companies are emerging as e-commerce has broken down entry barriers and allowed new companies to exploit new technology.
