Business Services Help Sector Growth Of 3.4%

The index of services published by the ONS suggests that the service sector grew by 3.4% in July 2014 compared with july 2013. All the major components of the services index experienced growth in the month compared with the same month a year ago.

Business services made the largest contribution with an increase of 1.9% and distribution,hotels and restaurants contributed 0.7%.

The monthly comparison between June and July 2014 shows that output increased by 0.3% for the fourth consecutive month. The quarterly comparison shows that between Q1 and Q2 there was 1.1% growth, an upward revision of 0.1% from the second estimate of GDP to be consistent with the Quarterly National Accounts.

Services Index Increase By 3.1%

The index of services published by the ONS increased by 3.1% in March 2014 compared with March last year. All four of the main components reported an increase on the same month a year ago. Business services and finance made the biggest contribution to the growth with an increase of 1.6%, distribution, hotels and restaurants also made a contribution to growth of 0.9%.

Between February and March 2014 there was estimated growth of 0.4% after growth of 0.2% between January and February. The quarterly comparison shows that output increased by 0.9% in Q1 compared with Q4 2013, unchanged from the estimate published in the preliminary estimate of GDP and consistent with the second estimate.

Services Index Increase Of 2.7% In February

All four of the main components of the index of services increased in February 2014 and it resulted in an increase of 2.7% in the total index in February.

The largest effects came from business services and finance with an increase of 1.4% to the total and distribution, hotels and restaurants which contributed 0.7% to total growth. The transport, storage and communication sector added and increase of 0.09% and government and other services 0.44%.

The monthly comparison of figures in the index of services shows that output in services increased by 0.2% between January and February 2014.

Business Services Leading Growth In Sector

The ONS index of services grew by 3.2% (IOS=106.6) over the year to January with all of the main service sectors showing growth. Business services and finance contributed the most with an increase of 3.5% and 1.4% to total growth in the service sector with administrative and support services contributing 11.3 %, distribution, hotels and restaurants also contributed growth of 1%, government and other services grew 1.7% and 0.5% to total growth and transport, storage and communication grew by 2.5% and 0.3% to total growth.

The month on month estimates show that there was growth of 0.4% in output between December 2013 and January 2014. Quarterly figures show growth of 0.8% between Q4 2013 and Q3 2013.

Services Index Increases By 3.2%

The Index of Services produced by the ONS increased by 3.2% on the annual comparison in December 2013. All four of the main components increased in the most recent month on the monthly comparison.

Business services and finance made the biggest contribution with an increase of 1.4%. Distribution, hotels and restaurants also made a significant contribution with an increase of 1%.

The index estimates that output increased by 0.2% between November and December of 2013 following an increase of 0.5% between October and November 2013.

Over the quarter Q4 2013 compared with Q3 the index reported an increase of 0.8%. The IOS is estimated to have increased by 1.9% in 2013 compared with 2012.

Business And Finance Drive Services Growth

Business and financial services made the biggest contribution to growth in services in August 2013 according to the ONS. An increase of 0.8% from business and finance helped the index of services grow by 1.5% in August 2013 compared with August 2012. Output grew by 0.4% in the month between July and August.

Services Up 2.2%

The index of services published by the ONS shows that there was annual growth in services of 2.2% in February 2013. All components of the index reported growth. The biggest growth was in distribution, hotels and restaurants and business services and finance both contributing 0.8% to the growth of the sector.

Slight Increase In Services Output

The seasonally adjusted index of services published by the ONS is estimated to have increased by 0.6% in December 2012 compared with December 2011. Three of the four service sector index components increased during the period, most recent month compared with the same month a year ago. The services sector index number for December was 103.7. The index of services has not follwed the line of the double dip recession but has enjoyed a long period of growth and is above its pre-recession peak. The weakness in the economy is coming from other sectors.

The most resilient of the components making up the service sector index has been government and other services. It is now above its pre-recession peak after a period of decline. Not all components have fared so well. Business services and finance are slightly below the pre-recession peak as are distribution, hotels and restaurants and transport, storage and communication. It is to be expected that government services would do well during a recession as services relating to unemployment, careers and skills are in greater demand as automatic fiscal stabilisers come into effect.

The largest contributions to the overall increase came from distribution, hotels and restaurants with a 2% increase and government and other services which increased by 1%. Transport storage and communication increased by 0.5% but business services and finance decreased by 0.3%.

Looking at the quarterly comparison, between Q3 and Q4 services output decreased by 0.1%. The estimate from the GDP preliminary estimate for Q4 of no difference was slightly up on the actual figure. The estimate published is consistent with the second estimate of GDP. When comparing this quarter with the same three months in 2011 output increased 1.2%. The main contributors to the decrease came from government and other services with a decrease of 0.8% and distribution hotels and restaurants with a decrease of 0.5%. Upward pressure came from transport, storage and communication with an increase of 1.2% and business services and finance with an increase of 0.2%. The third quarter figures were helped by the Olympics and Paralympics.

The monthly comparison for December shows that service sector output decreased by 0.4% between November and December 2012 but increased by 0.6% when compared with December 2011. Transport, storage and communication increased by 0.5% during the month but the other three components decreased including a fall of 0.8% in business services and finance.

Growth In The Services Sector

The latest services index from the ONS suggests that the services industry grew by 1.2% in November 2012 compared with November 2011. Three of the four main components were estimated to have grown. The biggest contributions to the growth were from government and other services with growth of 2% and distribution, hotels and restaurants with 2.7% growth. The monthly analysis says that between October and November there was no change in output.

Business services and finance grew by 0.6% over the year with the main contributions to the growth coming from administrative and support service activities with growth of 6.8% and other professional services up by 0.9%.

Estimates Say GDP Down

GDP was estimated to have fallen by 0.3% in the fourth quarter of 2012 comapred with the previous quarter according to a statistical bulletin from the ONS.

The production industries output was said to have decreased by 1.8% over the quarter, construction increased its output by 0.3% but in services there was no change. GDP as a whole remained the same as compared with Q4 2011. Transport, storage and communications increased by 0.7% with the largest contributions coming from motion picture, video and TV and programming and broadcasting. Business services and finance also increased by 0.4% with the largest contribution coming from employment activities. The agriculture sector fell by 0.6% on the same period in the previous year. While agriculture did not contribute to the change in GDP quarter on quarter, on the year on year analysis agriculture decreased by 3%.

The growth rate of the level of GDP was affected by two factors worthy of note. The level of GDP in the third quarter was helped by the London 2012 Olympic and Paralympic Games and there are some signs of a 'fall back' from these events. The other factor that should be borne in mind was the longer than expected maintenance of the largest North Sea oil field which reduced the oil and gas extraction component for the quarter.

Services Output Up 2%

The index of services for October 2012 compared with October 2011 was estimated to have increased by 2% according to a statistical bulletin from the ONS. All 4 components increased output: business services and finance by 2.8%, government and other services by 1.8%, transport, storage and communication by 2% and distribution, hotels and restaurants by 0.6%.

On the monthly comparison service sector output was said to have increased by 0.1% between September and October 2012. Business services and finance and transport, storage and communication both grew over the month by 0.8% and 1.1% respectively. Government and other services and distribution, hotels and restaurants both decreased by 0.5% and 1.3% respectively offsetting the increases.

ONS Services Index Up 1.1%

The index of services for September published by the ONS increased by 1.1% compared with September 2011 but is estimated to have decreased by 0.5% between August and September 2012. Three of the four components of the index increased compared with the same month last year. The largest increases were in government and other services with an increase of 2% and hotels and restaurants with an increase of 2.3%. Business services and finance also increased but by a smaller margin of 0.6%. The only sector to report a decrease was transport, storage and communication with a fall of 1.3%.

Confidence Growing In Service Sector

Confidence is growing in the service sector and firms are more optimistic than three months ago according to the latest services survey by the CBI. It is because business has generally been better and things are expected to continue improve in the coming months. Business are also employing more staff and spending more time on training. The business situation is better than it was three months ago according to consumer service providers. Volumes fell at a similar rate but values fell more slowly due to slower price deflation. Selling prices fell slightly but are expected to rise. Professional and business services firms were much more optimistic than the last quarter. There was an unexpected improvement in both business volumes and values and volumes are expected to continue to grow and growth in values is expected to strengthen. Profitability stabilised when it was expected to fall and is expected to grow in the next quarter.

Estimated 1% Growth In GDP In Q3

GDP was estimated to have increased by 1% in the third quarter of the year compared with the previous quarter according to a statistical bulletin from the ONS. Production increased by 1.1%, construction decreased by 2.5% and services increased by 1.3%. Manufacturing contributed the most to the increase in production and agriculture increased by 2.2%. In the services sector distribution, hotels and restaurants grew by 1.6% as did government and other services, business services and finance contributed 1% growth and transport, storage and communiaction 0.8%.

Services Index Increases Again

The index of services (seasonally adjusted) increased by 0.7% in July 2012 compared with July 2011. There were increases in three of the four services index components - distribution, hotels and restaurants, transport, staorage and communication, business services and finance and government and other services. The largest contributors to the increase were government and other services with an increase of 1.6% and business services and finance with an increase of 0.8%.

Business Sevices Lead Services Growth

Business services and finance were the largest contributor to the 1.3% increase in the Index of Services in May 2012 with an increase of 1.7% according to a bulletin from the ONS. The other major contributor to the increase in the index was government and other services with an increase of 1.5%. Three of the four service sector components of the index increased in May compared with last May.

Within the business services sector the main contributor to the increase came from other professional services which increased by 5.8% and administrative and support services which increased by 5.2%. Human health and social work activities were the main contributor to the increase in the government and other services sector.

Transport, storage and communication was the sector component that showed a decrease of 0.5%. Distribution, hotels and restaurants, the other component, increased by 1.4%.

Services Index Up 2%

The index of services from the ONS for April 2012 was up 2% on April last year. Between March and April 2012 there was no change in the index.

All four components grew in April on the month on a year earlier comparison. Business services and finance rose by 2.1%, transport, storage and communication rose by 4.8%, government and other services grew by 1.3% and distribution, hotels and restaurants grew by 0.9%.

The main upward contributions in the transport, storage and communication sector came from computer programming, consultancy and related activities (8.1%) and telecommunications (9.9%). In business services and finance the main upward contributions came from administrative and support services (6.7%) and other professional services (6.2%).

Fall Of 0.2% In GDP

The preliminary estimates of GDP published by the ONS show that GDP fell by 0.2% in the first quarter of 2012. Output fell in the production and construction indistries by 0.4% and 3% respectively but services grew by 0.1% following a decrease of 0.1% in the previous quarter. A closer analysis shows that the decreases in the production industries were driven by mining and quarrying and manufacturing. An increase in retail and food and beverage services contributed to the 0.1% increase in the distribution, hotels and restaurants sector and computer programming, consultancy and related services and motion picture, video and television production also made a significant contribution to the increase of 0.4% in transport, storage and communication. Financial services made the biggest contribution to the 0.1% decrease in business services and finance and health and sports activities, amusement and recreation made the biggest contribution to the 0.2% increase in government and other services. Agriculture, forestry and fishing fell by 1.9%.

Services Growth 0.8%

The index of services for February 2012 from the ONS increased by 0.8% compared with February 2011. The largest contributions to the increase of the three sectors that increased were from business services and finance and government and other services both of which grew by 1.1%. On the monthly analysis the sector fell by 0.4%. The increase in business services and finance came mainly from professional services activities with an increase of 5.1% and administrative and support activities with 4% growth. Government and other services increase came mainly from increases in human health and social work activities which increased by 2.3%. The only one of the four major components of the index to see a decrease was distribution, hotels and restaurants which fell by 0.2%.

Investment Down On Quarter But Up On Year

Business investment fell by 3.3% or £1bn to £29.7bn on the previous quarter but increased by £0.5bn on the same quarter last year. Total manufacturing expenditure decreased by £0.1bn while total non-manufacturing decreased by £0.9bn when compared with the previous quarter.

Business investment growth has been positive for most of the last eighteen months after the severe falls during the recession but it has again contracted in Q4 2011. The reasons are not the same. Whereas during the recession and the related falls in output business investment was weak, this recent weakness seems due to a cautious stance by the corporate sector towards expansion and investment. It can be seen in the limited increases in employment. The ratio of business investment to private non-financial corporation gross trading profits has come down to fewer than 50% from over 60%. Current price data is subject to movements.