Index of services shows growth slowing at the end of 2010
As Richard has said, the release of today’s GDP figures was accompanied by ONS’s Index of Services, which gives an indication of how the service sector has been faring in recent months. It shows that after strong growth earlier in the year the index was flat during November and between September to October it fell by -0.6 points.
This headline index also masks changes between different sectors, which show that while there was monthly output growth (between October and November) in distribution and transport, storage and communication there were also real monthly falls in output from hotels and restaurants, business services and finance and Government and other services.
The November index is still showing quarterly growth, but this is strongly affected by September’s high output figures. Once September moves out of the quarterly analysis the quarterly fall looks likely to be significant – both as a result of December’s poor figures and also – importantly – because of falling output or negligible output during the previous two months.
As Richard notes, the service sector accounts for nearly three-quarters of total gross domestic product and across the UK there are over 25,000,000 service sector jobs. Stalling growth is a cause for concern, and may not simply be saved by the sun.