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.

e-Commerce Above Estimates But Down On Year

E-commerce accounted for 18% of turnover in 2012 down from 19% in 2011 but above the 2008 estimate of 14%. Business to business electronic data interchange (EDI) sales made up 67% of the total of e-commerce sales and the rest was accounted for by business to household website sales (33%). The website sales accounted for 6%, or £164bn, of business turnover in 2012 compared to 5%, or £134bn, in 2012. Broadband Internet had reached 95% of businesses and 82% had a website.

The largest companies still dominate e-commerce sales with businesses of 1000 or over employees accounting for 51% of all e-commerce sales. Total e-commerce sales amounted to £335bn in 2008, now sales have reached £492bn. Average annual growth between 2008 and 2012 was 10%. Total growth over the period 2008-2012 was 47%.

The highest levels of total e-commerce by industry sector were reported in wholesale and manufacturing with £172bn and £157bn respectively. The accommodation and food services sector reported low sales by comparison with £9.1bn but reported the highest proportional increase of 57% annually.

Website sales have reported steady growth in recent years. In 2008 13% of businesses sold over a website reporting sales valuing £92bn. In 2012 18% of businesses sold over a website with sales of £164bn. The total value of website sales increased to 6% of total business turnover. The largest companies accounted for half of all sales. The smallest businesses accounted for only 0.7% of the total 6% of turnover from website sales.

The wholesale sector reported the highest amount of website sales with £50bn. The retail sector reported the highest proportion of businesses making sales over a website with 34% and construction the lowest with 7%.

EDI sales decreased by £23bn in 2012 to £328bn from £351bn. EDI accounted for 12% of total business turnover in the UK in 2012 (the decrease may be accounted for by things like sampling variability). Only 6% of businesses sold by EDI while three times as many businesses used websites compared to EDI but sales values over EDI were double at £328bn compared to £168bn.

The manufacturing sector made to highest amount of sales in 2012 with £145bn. The wholesale sector followed with £122bn but also saw the biggest decrease in EDI sales value down 14% or £20bn from £142bn in 2011.

Social media or websites and applications that enable users to share content and participate in social networking has enabled businesses to change the way they interact with customers. In 2012, 44% of businesses reported they had used social media such as Facebook and LinkedIn. Nearly a quarter had used a blog or a microblog such as Twitter. Multimedia content sharing websites like YouTube or Flickr were used by 15% of businesses. Half of large businesses have content sharing websites. The ICT sector had the highest rate of use with 53% and transport and storage the lowest with 5%.

In 2012, 68 of businesses provided NIC details online and 89% of businesses completed their VAT returns over the Internet.

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.

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%.

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%.

Business Services Drive Up Services Index

The index of services (seasonally adjusted) increased by 1.2% in September 2011 compared with a year earlier. Business services and finance increased by 1.5% ands accounted for 38% of services, government and other services increased by 1.6% and accounted for 29%, distribution, hotels and restaurants which accounts for 18% remained unchanged and transport, storage and communication increased by 1.5% and accounted for the other 15% of services.

Services Output Increased 1.6% Over the Year

The index of services published by the ONS increased by 1.6% in June 2011 compared with June 2010. There was an increase in all components.

The largest contribution was made by business services and finance which rose by 1.6%, its highest increase since October 2010. Hotels and restaurants increased by 3.6%, the highest since February 2008, transport, storage and communication by 3.4% and government and other services by 1.2%.

Output in the services sector fell by 0.1% over the month between May and June 2011. While output grew in hotels and restaurants by 2% and government and other services by 0.2%, it remained as it was in business services and finance and fell by 1.6% in transport, storage and other services and by 0.7% in distribution.

Services Growth 0.8%

The index of services rose by 0.8% in April 2011 compared with April 2010. Transport, storage and communication services made the largest contribution with an increase of 3.7% within which air transport increased by 23.3%.

Business Services Lead Increase In Services Index

The index of services from ONS rose by 2.5% in September 2010 compared with September 2009. There were increases in all five components. Business services and finance grew by 3.4%, distribution by 1.8%, hotels and restaurants by 4.9%, transport, storage and communication by 1.1% and government and other services by 1.8%.

Services Index Up by 1.4%

The ONS Index of Services increased by 1.4% in June 2010 compared with June 2009. Four of the five components increased over the year. Distribution increased by 4.2%, business services and finance by 1.7%, hotels and restaurants by 0.9% and government and other services by 0.7%. The only component to show a decrease was transport, storage and communication with -1.7%. It was a very similar picture over the quarter the only difference being hotels and restaurants which remained unchanged.

GDP Falls Over The Quarter, Record Fall Over The Year

The final estimated UK GDP in volume terms increased by 0.3% on the previous quarter, the same as it was estimated in the previous estimate in May. GDP fell in volume by a record 4.9% during 2009. The household saving ratio was 6.9% and real household disposable income rose by 0.4% following a fall of 1% in the previous quarter.

GDP output by category shows that in agriculture, forestry and fisheries output fell by 2.2%. The production industries increased output by 1% over the quarter but output fell by 10.2% over 2009. Mining and quarrying output fell by 0.5% but manufacturing output rose by 1.4%. Electricity, gas and water utilities output increased by 0.4% but construction decreased by 1.6%. Services increased output by 0.3% but output in 2009 fell by 3.3% on 2008 while distribution, hotels and restaurants fell in all sub-categories and by 0.7% overall. Transport, storage and communication increased output by 0.2% due to weaker growth in land transport and post and telecommunications. Business services and finance output increased by 1% due to stronger growth in banking, renting and real estate. Government and other services reported an unchanged level of growth with output in health and social care increasing by 0.5% and other services increasing by 0.2%. Education decreased by 0.6% and public administration and defence output fell by 0.3%.

GDP can also be analysed using expenditure categories. Gross domestic expenditure incrrased by 1.2%. Household final consumption expenditure fell by 0.1% and so the volume of spending in 0.2% lower than Q1 2009. Government final consumption expenditure increased by 1.5% from 0.1% in the previous quarter. Gross fixed capital formation increased by 4.4% compared with a fall of 1.7% in the previous quarter. The increase was mainly due to an increase of 7.8% in business investment which is still 7.7% lower than Q1 2009. General government investment increased by 6.5%. In 2009 gross fixed capital formation decreased by 15% compared with 5% a year earlier. Inventories decreased by £2.2bn. The trade deficit increased to £10.4bn.

The GDP implied deflator at market prices was 2.9% above the same quarter 2009 and increased by 1.7% over the quarter 2010. GDP at market prices increased by 2.1% over the quarter but fell by 3.7% in 2009.

Services Increase Output By 1%

The ONS Index of Services rose by 1% in April 2010 compared with April 2009. All five components saw an increase in output in the most recent month on a year earlier. Distribution made the largest contribution with an increase of 4.6%.

The motor trades made the largest contribution within distribution with an increase of 10.3%. Retail also made a significant constribution with an increase of 3.4%. Hotels and restaurants increased by 0.4% with the biggest increase coming from restaurants. Transport, storage and communication increased output by 0.2% with transport services making the most difference with an increase in output of 4.7%. Business services and finance increased its output by 0.4% in April 2010 compared with April 2009. Real estate made the biggest contribution with an increase in output of 2.6% which added 0.8 percentage points to the 0.4% increase. Government and other services increased their output by 0.5% and the largest contribution came from health and social care which increased by 3.1% adding 1 percentage point to the 0.5% increase on last year.