Index of Services, UK: February 2017

Monthly movements in output for the services industries: distribution, hotels and restaurants; transport, storage and communication; business services and finance; and government and other services.

This is not the latest release. View latest release

This is an accredited national statistic.

Cyswllt:
Email Mark Stephens

Dyddiad y datganiad:
28 April 2017

Cyhoeddiad nesaf:
25 May 2017

1. Main points

  • In the 3 months to February 2017, services output increased by 0.5% compared with the 3 months ending November 2016; the 3-month on 3-month growth rates show that services output continues to slow since October 2016.
  • In the 3 months to February 2017, services output increased by 2.5% compared with the same period a year ago.
  • Services output increased by 0.2% between January 2017 and February 2017; this follows negative growth of 0.1% between December 2016 and January 2017, unrevised from the previous estimate.
  • The largest contribution to the month-on-month growth came from distribution, hotels and restaurants, which contributed 0.22 percentage points of which retail sales contributed 0.12 percentage points; growth across the other main services components was broadly flat.
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2. Things you need to know about this release

The monthly Index of Services (IoS) provides a timely indicator of growth in the output of the services industries and is the largest contributor to the output approach to the measurement of gross domestic product (GDP), accounting for 78.8% of UK GDP in 2013.

The IoS measures the UK output in: distribution, hotels and restaurants; transport, storage and communication; business services and finance; and government and other services. These data are used to produce seasonally adjusted estimates of output at chained volume measures (removing the effect of inflation). Unless otherwise stated, all estimates included in this release are based on seasonally adjusted data.

Data relating to the retail industry are broadly comparable with Retail sales in Great Britain: Mar 2017, published on 21 April 2017.

This February 2017 release contains revisions from January 2017. This means that we have incorporated additional data since this period.

Revisions can be made for a variety of reasons, the most common include:

  • late responses to surveys and administrative sources
  • forecasts being replaced by actual data
  • revisions to seasonal adjustment factors, which are re-estimated every month and reviewed annually

This revisions period is consistent with the National Accounts Revisions Policy.

The UK Index of Services has been designated by the UK Statistics Authority as National Statistics, in accordance with the Statistics and Registration Service Act 2007 and signifying compliance with the Code of Practice for Official Statistics.

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3. Index of Services (IoS) main figures and the longer-term trend

Table 1 shows data for the Index of Services (IoS) and each of the main components for February 2017.

Figure 1 shows the seasonally adjusted index time series for the IoS over the past decade; this shows continued services growth following the economic downturn. The monthly IoS series can be volatile and therefore we recommend that monthly growths are viewed in the context of the longer-term trend and 3-month on 3-month growth rates.

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4. 3-month on 3-month services growth

Services output increased by 0.5% during the most recent 3 months to February 2017 compared with the previous 3 months to November 2016. The 3-month on 3-month growth rates show that services output continues to slow since October 2016 as displayed in Figure 2.

Figure 3 shows the 3-month on 3-month contributions of each of the main IoS components.

Three of the four main components increased. In order of their contribution to growth:

  • business services and finance increased by 0.6%, contributing 0.23 percentage points
  • government and other services increased by 0.5%, contributing 0.13 percentage points
  • transport, storage and communication increased by 0.6%, contributing 0.09 percentage points

The distribution, hotels and restaurants sector was flat over the period with three of the five industries within the sector showing negative growth. The most notable contribution came from retail trade, which fell by 1.3%, contributing negative 0.10 percentage points. This follows a fall of 0.5% and a negative 0.04 percentage point contribution in the 3 months to January 2017.

More detail on individual components can be found in the Index of Services publication tables dataset. The tables also provide information on the growth for the 3 months ending in February 2017 compared with the 3 months ending February 2016.

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5. Month-on-month services growth increased in February 2017

During February 2017, services output increased by 0.2% following a fall of 0.1% during January 2017. Figure 4 shows the pattern of Index of Services (IoS) headline growth rates since January 2015.

Figure 5 shows the month-on-month contributions of each of the main IoS components.

Of the four main components of the services industries, distribution, hotels and restaurants increased in the most recent month compared with the previous month, recording growth of 1.2% and contributing 0.22 percentage points. Within this sector, retail trade recorded a month-on-month increase of 1.7%, contributing 0.12 percentage points, food and beverage service activities increased by 2.9%, contributing 0.08 points and wholesale trade increased by 1.3%, contributing 0.06 percentage points.

Across the other services sectors, growth was broadly flat where 17 industries made a positive contribution to growth, 17 industries were flat and 12 industries made a negative contribution to growth. Transport, storage and communication decreased by 0.1%, contributing negative 0.01 percentage points with a notable fall in telecommunications, where growth fell by 1.4%, contributing negative 0.03 percentage points.

Government and other services, and business services and finance were flat over the period.

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6. Services grew by 2.4% between February 2016 and February 2017

Figure 6 shows services output increased by 2.4% in February 2017 compared with February 2016, following growth of 2.4% in January 2017 compared with January 2016.

All four of the main components of the services industries increased in the most recent month compared with the same month last year. In order of their contribution to growth:

  • business services and finance increased by 2.4%, contributing 0.96 percentage points
  • distribution, hotels and restaurants increased by 4.2%, contributing 0.76 percentage points
  • transport, storage and communication increased by 3.1%, contributing 0.41 percentage points
  • government and other services increased by 1.1%, contributing 0.31 percentage points
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7. What is the contribution of services to GDP?

With a weight of 78.8% in 2013, the services industries are the largest industrial grouping in the output approach to measuring gross domestic product (GDP).

Also published today (28 April 2017) is the Gross domestic product, preliminary estimate: Jan to Mar 2017 reporting that GDP in Quarter 1 (Jan to Mar) 2017, was estimated to have increased by 0.3% compared with the previous quarter. The services aggregate was the dominant contributor to the quarter-on-quarter percentage change in GDP, contributing 0.23 percentage points. Production, construction and agriculture contributed 0.04, 0.01 and 0.00 percentage points respectively to the headline figure.

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9. What’s changed in this release

This is the fourth Index of Services (IoS) bulletin released as part of the new economic theme days. As such this bulletin now follows a more streamlined format and some tables such as response rates and revisions, previously found in the background notes, can now be found in the main datasets.

In response to feedback from our users a new table has been added to the main datasets. This table displays monthly chained volume indices for services and its main components to four decimal places.

Monthly economic commentary was published alongside this release, presenting new analysis on the latest economic data.

We welcome your feedback on this new style bulletin via our short survey.

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10. Quality and methodology

The monthly Index of Services (IoS) was developed to provide a timely indicator of growth in the output of services industries, at constant prices for the UK. The IoS is an important component of monthly output (GDP(O)), representing about 78.8% of UK gross domestic product (GDP) as of 2013. The IoS shares the exact same industry coverage as the corresponding quarterly series within GDP(O).

The Index of Services datasets contain additional material, including:

  • Monthly Business Survey response rates
  • publication tables
  • revisions triangles
  • lower level time series data

The Index of Services Quality and Methodology Information document contains important information on:

  • the strengths and limitations of the data
  • the quality of the output: including the accuracy of the data and how it compares with related data
  • uses and users
  • how the output was created
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