The U.S. securities industry’s profit and revenue growth is slowing according to the industry trade association, the Securities Industry Association.

The latest issue of SIA Research Reports indicates that while the industry posted strong profit and revenue gains for first quarter of 2004 compared to the previous quarter, “indications are that the pace of growth has leveled off”.

Profits rose 13.4% from the fourth quarter of 2003 to reach US$7.58 billion, and gross revenues increased 6.8% to reach $58.68 billion from the fourth quarter’s US$54.9 billion. This represents a slowing of revenue growth, which expanded 7.6% from the third quarter of 2003 to the fourth.

Expenses, however, continued their upward climb as firms began increasing their compensation budgets, the SIA reported. The fourth quarter’s expenses increased 5% from the third quarter, but in the first quarter expenses are up 5.9% to US$51.1 billion from the fourth quarter’s US$48.2 billion.

Notwithstanding the slowing pace of growth, SIA chief economist Frank Fernandez predicts that full-year 2004 results will show significant gains over 2003. Total revenue for the year should reach US$232.1 billion, a 9.1% increase, and profits are expected to reach US$27.8 billion, a 15% rise.