JUST when you thought it couldn’t get worse, several studies reveal bleak times ahead for the service, retail, distribution and construction industries.

One reveals that two out of five hotel, retail, distribution and construction firms are planning to cut jobs next year in response to the economic downturn.

A survey of more than 1,000 company directors showed that 43% were planning to cut their spending on hospitality over the next year as part of cost-cutting measures.

One in four of those questioned by the Institute of Directors warned of job losses in 2009 but the figure was much higher in some sectors, including construction, hotels and retail.

However , almost a third of directors said they planned to increase staffing levels next year and two out of five intended to invest more on training.

The IoD says the research shows the UK economy was in the “early stages” of recession.

“Increasingly gloomy forecasts for 2009 have compelled many businesses to find savings and where possible, brace themselves for even more cut-backs in the next 12 months,” says Alexander Ehmann, the IoD’s head of regulatory and Parliamentary affairs.

“The research shows us very clearly that areas like hospitality are seen as easy pickings for cost savings and that business leaders are choosing to slash budgets in these areas in an attempt to preserve and where possible, create new jobs.

“However, today’s research represents a snapshot of business views in a rapidly changing environment. The IoD believes this is merely the end of the beginning of the recession. Peripheral spending areas will quickly become exhausted, causing employers to look afresh at staffing levels in 2009.

“It is, however, reassuring to see the robust commitment to skills as a key driver of competitiveness in good times and bad.”

Meanwhile, the CBI says job losses in hotels, bars, restaurants and other service sector firms are also expected to accelerate as the economic downturn deepens.

The CBI said a survey of almost 200 companies, ranging from those in accountancy and legal to travel and leisure, showed “steep falls” in profits in the past three months, sparking plans to scale back employment and investment.

Firms selling services to businesses saw the volume and value of their business, profitability and numbers employed fall at record rates, with the steepest declines since the survey began a decade ago.

Companies said they were having to cut investment plans “sharply” as worries about future demand intensified.

“Recent economic data has highlighted just how rapidly the economy is weakening,” says Ian McCafferty, the CBI’s chief economic adviser.

“With consumers continuing to tighten their belts, companies operating in consumer services, such as leisure and personal care are continuing to find trading conditions very challenging.

“With a record number of consumer services companies worried about the cost of credit, we need to see lending conditions improve as matter of urgency.

“As the recession deepens, firms are reducing business-to-business spending at a sharper rate and as a result, the decline in volumes and profits in business and professional services is expected to accelerate over the months ahead.

“So far, job losses have been relatively small across the whole of the service sector but with firms predicting faster falls in volumes, values and profitability in the next quarter, we can expect to see significant job losses in the coming months.”