Business services

Business services are proving to be relatively robust in the face of the recession, as long-term contracts and stable cash flows provide a barricade against changing consumer demand.

There may also be further opportunities for the business services sector as companies look to reduce their cost base by outsourcing their non-core functions. They will, however, expect keener pricing, which could further reduce already low margins for the industry.

The recruitment market is suffering as companies are laying off people instead of recruiting, reducing their revenues. There are opportunities to diversify into outplacement services, but these do not fill the revenue gap. The industry must reduce its costs as the key lever to maintaining profitability.