In the three months to January 2018, services output increased by 0.6% compared with the three months ending October 2017; this is the strongest growth since the three months ending December 2016.
Architectural and engineering activities made the largest contribution to the three-month on three-month growth, contributing 0.08 percentage points.
In the three months to January 2018, services output increased by 1.3% compared with the three months ending January 2017.
The Index of Services increased by 0.2% between December 2017 and January 2018.
Architectural and engineering activities made the largest contribution to the month-on-month growth, contributing 0.07 percentage points; motion pictures offset this, contributing negative 0.09 percentage points following a strong performance in December.
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 79.3% of UK GDP in 2015. Also published today (29 March 2018) is the Quarterly national accounts: October to December 2017.
The IoS measures 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.
The IoS is an important economic indicator and one of the earliest short-term measures of economic activity. It is used in the compilation of the national accounts and widely used by private and public sector institutions, particularly by the Bank of England and Her Majesty’s Treasury to assist in informed decision and policy-making.
Data for the latest period are primarily based upon the Monthly Business Survey (MBS) of approximately 26,000 businesses as detailed in MBS Turnover in services industries.
In addition, from the October 2017 bulletin published in December 2017, we have also included VAT data across 35 services industries for small- and medium-sized businesses. These have been used to supplement data from the MBS from January 2016 to September 2017. Further information on the use of VAT data was published in the VAT turnover data in National Accounts: background and methodology update.
Further data is received from a wide variety of data sources as described in the GDP(O) source catalogue.
Data relating to the retail industry are broadly comparable with Retail sales, Great Britain: January 2017, published on 16 February 2018.
This January 2018 release contains revisions from January 2017 and is consistent with the National Accounts Revisions Policy. 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
HMRC VAT returns replacing MBS data for small- and medium-sized businesses when VAT estimates become available every quarter
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.Nôl i'r tabl cynnwys
Table 1 shows data for the Index of Services (IoS) and each of the main components for January 2018.
Table 1: Index of Services main figures, UK, January 2018
|Percentage of Services1||Index number (2015 = 100)||Most recent month on a year earlier||Most recent 3 months on a year earlier||Most recent month on previous month||Most recent 3 months on previous 3 months|
|Index of Services||100.0||105.0||1.3||1.3||0.2||0.6|
|Distribution, hotels and restaurants||17.3||106.8||1.1||0.5||0.4||0.0|
|Transport, storage and communication||13.2||109.6||2.5||2.5||-1.3||1.3|
|Business services and finance||41.5||105.6||1.9||1.9||0.5||0.9|
|Government and other services||28.0||100.8||0.0||0.3||0.1||0.1|
|Source: Office for National Statistics|
|1. Components may not sum to 100% due to rounding.|
Download this table Table 1: Index of Services main figures, UK, January 2018.xls (46.1 kB)
In the three months to January 2018, services output increased by 0.6% compared with the three months ending October 2017. This is the strongest growth since the three months to December 2016.
Figure 1 shows the contributions to growth from the four main Index of Services (IoS) components.
The business services and finance sector was the largest contributor to the three-month on three-month IoS growth, increasing by 0.9% and contributing 0.39 percentage points. This is the strongest growth for this component since April 2016.
Of the 21 industries that make up business services and finance, 13 made positive contributions while four made negative contributions. The remaining industries were flat over the period. Architectural and engineering activities made the largest contribution to the three-month on three-month growth, increasing by 3.6% and contributing 0.08 percentage points. Additionally, rental and leasing activities increased by 4.8%, contributing 0.06 percentage points.
Two of the remaining three main IoS components also increased in the three months to January 2018. Transport, storage and communication increased by 1.3%, contributing 0.18 percentage points and government and other services increased by 0.1%, contributing 0.03 percentage points. Distribution, hotels and restaurants was flat over the period.
The industries with the largest contributions to growth across these three sectors were:
human health activities, which increased 0.8%, contributing 0.06 percentage points
motion pictures, which increased 4.9%, contributing 0.05 percentage points
computer programming, which increased 1.1%, contributing 0.04 percentage points
Activities of membership organisations was the industry with the largest negative contribution to three-month on three-month growth. This industry decreased by 3.8% and contributed negative 0.04 percentage points.Nôl i'r tabl cynnwys
Figure 2 shows the three-month on a year ago Index of Services (IoS) growth rates along with the growths for distribution, hotels and restaurants and business services and finance sectors since January 2012.
In the three months to January 2018, services output increased by 1.3% compared with the three months ending January 2017. Since the start of 2017, services has slowed and reached a low of 1.0% in November 2017, a low not seen since December 2011. However, the three-month on a year ago growth picked up slightly during December 2017 and has again in the current period.
The distribution, hotels and restaurants sectors three-month on a year ago growth had consistently out-performed overall services growth from February 2013. This sector reached a growth of 5.9% in December 2014, January 2015 and February 2015 and has been a main contributor to the services growth over this period. However, since the three-months to November 2016 this sector has weakened and it’s three-month on a year ago growth fell below that of overall services in the three months to October 2017.
The business services and finance sector was also a main contributor to the overall services three-month on a year ago growth of 4.4% in December 2014. In contrast to distribution, hotels and restaurants this component has seen more stable growths over the last two years. The movements of these two IoS components indicate that the industries dominated by domestic consumption are falling whereas industries with larger export components display more stable growths.
Figure 3 shows the three-month on a year ago Index of Services (IoS) growth rates and the average of these growth rates over each year since 2005.
Although the three-month on a year ago growth for January 2018 of 1.3% is the strongest since the three months to September 2017, it is still below the average of 1.6% for 2017 and is down considerably on the 2016 three-month on a year ago average of 2.5%. The average three-month on year ago growth for 2017 is the lowest since 2011 which was also 1.6%.Nôl i'r tabl cynnwys
Services output increased by 0.2% in January 2018, following a rise of 0.1% in December 2017.
Figure 4 shows the Index of Services (IoS) month-on-month growth rates since January 2015 and Figure 5 shows the month-on-month contributions of each of the main IoS components for January 2018.
Three of the four main components of the services industries increased during January 2018. In order of their contribution to growth:
business services and finance increased by 0.5%, contributing 0.22 percentage points
distribution, hotels and restaurants increased by 0.4%, contributing 0.07 percentage points
government and other services increased by 0.1%, contributing 0.03 percentage points
Architectural and engineering activities and legal activities were the industries largely responsible for the growth in the business services and finance sector. Architectural and engineering activities increased by 3.4% and legal activities increased by 3.5%, contributing 0.07 and 0.06 percentage points respectively to headline growth.
Within the other two main components, motor trades and other professional service activities were the strongest performers. Motor trades increased by 1.7%, contributing 0.04 percentage points, and other personal service activities increased by 3.5%, also contributing 0.04 percentage points.
Motion pictures was largely responsible for the downturn in the transport, storage and communication sector, with the industry suffering a fall back following a strong December. Motion pictures decreased by 9.0% and contributed negative 0.09 percentage points to overall growth. Seven other industries fell during this period out of the 12 that make up this component, with notable falls in postal and courier activities, programming and broadcasting, and publishing activities. Transport, storage and communication fell by 1.3%, contributing negative 0.18 percentage points. The sector has not fallen to this level since March 2016.Nôl i'r tabl cynnwys
This release will incorporate the latest standard revisions and updated Value Added Tax (VAT) data for January 2017 to June 2017, in addition to new VAT data for July 2017 to September 2017. This will have had an impact on revisions to previously published Index of Services estimates. These revisions will be consistent with the Quarterly national accounts: October to December 2017 which is also published today.
Further information on the use of VAT data was published on 19 March 2018 in an article, VAT turnover data in National Accounts: background and methodology.Nôl i'r tabl cynnwys
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 (gross domestic product output approach (GDP(O)), representing about 79.3% of UK gross domestic product (GDP) as of 2015. 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 (MBS) response rates (current and historic)
IoS and main component indices to four decimal places
lower-level time series data
Monthly Business Survey (MBS) turnover of services industries
The Index of Services Quality and Methodology Information report contains important information on:
the strengths and limitations of the data and how it compares with related data
uses and users of the data
how the output was created
the quality of the output including the accuracy of the data
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