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%.

Service Sector Increases Growth

The index of services published by the ONS shows that the services sector grew by 2.4% in December 2011 compared with December 2010. All components of the service sector index reported growth. The biggest contributors to the increase were business services and finance which grew by 2.9% and government and other services which grew by 2.3%. The sector also increased on the monthly comparison by 0.2%.

The main contributors of the five components of the business services and finance section were other professional services and real estate. All five components showed an increase. Output increased in five of the six components of the government and other services category with human health and social work activities providing the main contribution with an increase of 3.1%

The public strike on the 30 November probably has an effect on the index but it is difficult to measure the effect directly.

Services Output 2.1% Up On Year

The Index of Services, published by the ONS, rose 2.1% over the year from May 2009 to 102.5 in May 2010 (seasonally-adjusted). All five components increased in the most recent month on a year earlier. The biggest rise was in business services and finance which rose 2.5%. It rose 1% over the month.

Distribution output increased by 4.5% notably motor trades which rose by 12.5% and retail which rose by 4.1%. Government and other services increased by 1% within which the greatest contribution was from health and social work which contributed 2.6% in output and 0.9 to the overall 1%.

Falls In Employment Rate And Pay In July

There isn't much good news in the ONS Labour Market Survey for September. The number of unemployed, the unemployment rate and the claimant count have all increased. The number of inactive people of working age and the inactivity rate have increased and growth in average earnings has decreased in the three months to July, the period the survey covered. The employment rate has fallen to 72.5% and the total employment level was 28.89 million.

There was another fall in the number of people working in manufacturing at 2.65 million, down 221,000. Total hours worked per week was 908.7 million. Average weekly hours in the quarter to July was 31.5 down 0.1 from April.

The unemployment rate was 7.9% or 2.47 million in the quarter to July 2009, up 743,000 on last year. There were 567,000 people unemployed for over 12 months and 731,000 18-24 year olds. There were 22,000 people 25 years and over claiming for over 2 years. The claimant count was 1.61 million up 693,700 on last year. The economic inactivity rate was 21.1% or 7.99 million in the quarter. That is an increase of 97,000 over the quarter and 125,000 over the year.

Average earnings however increased 2.2% on last year, down 0.2% from June. Pay including bonuses was up 1.7% on the year. Unit wage costs were up 3.6% in the first quarter of the year. In the quarter to July 2009 manufacturing unit wage costs increased by 4.3% and productivity decreased by 3.4%.

There were a total of 434,000 job vacancies in the three months to August, down 12,000, which meant there were 1.7 vacancies for every 100 employee jobs. There were also 246,000 redundancies over the quarter at a rate of 9.8 for every 1000 employees. In July 2009 there were 24,000 working days losts due to labour disputes from 10 stoppages.

ONS And CBI See Fall In Business Services Output

Services output seasonally adjusted chained volume of gross value added index fell by 1.2% quarter-on-quarter to 113.3 and follows a fall of 1.3% on the previous three months according to Office for National Statistics latest Index of Services figures. The most significant fall in both quarter-on-quarter and in month-on-month figures was in business services and finance. Distribution fell 0.2% in the quarter to March compared to the quarter to December. It is the 9th consecutive monthly fall, driven mainly by wholesale, motor trades also decreased and retail increased. Hotels and restaurants fell by 5.1% over same period. There were also significant decreases in bars and restaurants. Transport, storage and communications fell by 2.3%. Business services and finance fell 2.2% to 121.7 in the quarter to March on the quarter to December and fell 0.4% between February and March. Government services increased by 0.7% in the quarter to March with the most significant increases in health and social work.

The Confederation of British Industry released its quarterly Services Sector Survey results today. It shows the service sector is still is deep recession. There are some signs of confidence returning. Consumer services fell at their fastest rate since November 2001. The rise in prices made the fall in business values look less marked. Business and professional services values fell faster than volumes due to record deflation in prices. Rates of decline are expected to slow down in both consumer services and business and professional services over the next three months. Employment is continuing to fall in both sectors. Profitability also fell but at a slower rate than the record falls of the previous quarter. Business and professional services show a similar pattern. A steep downward trend continues in telecomms and computing and transport of goods and post. Marketing services also show a continued downward trend in business values and volumes but much less marked. Confidence and profitability have both fallen. There are some signs that the decline is begining to slow.