The ONS estimated that the UK economy grew by +0.2% (month-on-month) in March with both services and construction expanding in contrast to the decline for manufacturing. This gives quarterly growth of +0.7% for the 1st period of 2025 which, while stronger than the +0.1% in Q4-2024 is weaker than the growth of +0.9% at this time last year.
As with our note on the UK manufacturing sector, we will concentrate on the quarterly data for the economy overall. The impact of the slower growth at the start of 2025 than a year earlier means that the annualised growth rate (the cumulative trend over the past 4 quarters) has slipped back to +1.3% (from +1.5% at the end of 2024).
Given the relative size of the sector within the UK economy, it is not surprising that the growth rate for services matches that for the whole economy at +0.7% overall, although the annualised rate of +1.5% is slightly ahead of that for the economy. In Q1-2025, 10 of the 14 elements of the services sector grew (quarter-on-quarter).
The largest positive contributor to growth was “administrative & support service activities”, which grew by +3.3% with “wholesale retail trade; repair of motor vehicles & motorcycles” (+1.6%) the second strongest element of the services sector. The most significant negative contribution came from “education” where output fell by -0.6%.
In contrast, construction sector output was flat at the start of 2025, leaving the level of output +0.9% higher than a year ago. This picture was the combination of growth of +0.9% in new work balanced by a decline of -1.2% in repair and maintenance activity. There are more details in the range of ONS Statistical Bulletins which can be downloaded from their website at https://www.ons.gov.uk/releasecalendar (15 May) or on request from MTA.