Business Services 2019 outlook
So 2018 for Business Services was a really interesting year. It remained a very big part of the UK economy - 8% of GDP, 9% of economic output, and over 3.3 million jobs.
But it's also very important because of the diversity and resilience it offers whether we're talking about the recruitment sector, business process outsourcing, facilities management, or even the contractors. Strong and resilient performance.
In 2019 I think Business Services has got some challenges. Some of them are recurring, some of them are fresh. I think we have three challenges to think about:
Firstly, we'll continue to see scrutiny over public sector outsourced contracts and that'll be a theme that they’re used to dealing with and will continue to see in a post-Carillion world.
Secondly, as a GDP follower the sector is going to suffer from a slightly reduced growth rate and that will feed through pretty quickly into companies.
But lastly, and universally across all of the sub-sectors access to labour will be a challenge.
I think we'll continue to see a really strong demand for Business Services in 2019 be that in the outsourcing sector where we continue to see private and public sector looking to mitigate overheads and place those contracts with the specialists, be it in infrastructure or Property Services, where we see visibility of investment going forward into 2019, that will prop up demand for the services side.
The second opportunity I see for Business Services is in the technology side. Companies are continuing to invest in those new technologies and seeking out cost-saving ways of producing those services.
We see that in recruitment with the automatic selection of candidates and shortlist generation and we see that in business process outsourcing with robotic automation coming in and really driving costs out the business.
So I think those opportunities for technological investment are significant for Business Services and the companies that invest quickly are the ones that will win.
In summary, as I look forward to 2019 for Business Services, I see a really good year coming forward a year of opportunity for technology change a year of opportunity from the demand side.
Barclays has been there supporting Business Services for a number of years and we'll be there again in 2019.