Coming the day after the Spending Review announcements, the -0.3% fall in GDP for April attracted more headlines than might otherwise have been expected. In part this balanced the robust growth we saw in both February and March but it also points to a divergence in the economy with non-consumer services and manufacturing outweighing growth in construction and the rest of the service sector.
Our other note covers the manufacturing sector, so we will concentrate on the construction and services groups here; however, it is worth noting that there was also a significant reduction in output of “electricity, gas, steam and air conditioning supply” which is part of the wider production sector.
The construction sector grew by +0.9% in April, led by new work, but with repair & maintenance activity also making a positive contribution. In the latest 3 months (February to April 2025), output of this sector increased by +0.5% compared to the previous 3 months (November 2024 to January 2025) and was +2.0% higher than a year earlier (February to April 2024). The 3-month rolling trend was mainly driven by new work which grew by +0.9%, while repair & maintenance activity was only +0.1% higher.
There was a divergence in the service sector where overall output fell by -0.4% compared to March but consumer-facing services grew by +0.1%. On the 3-month rolling trend, overall service sector output grew by +0.6% with consumer-facing services up by +1.2%. The most significant negative contribution to the April figures came from “professional, scientific & technical activities” – the ONS puts this down to the increase in Stamp Duty at the start of the month which led to house purchases being pulled forward into March with the subsequent correction in April.
The growth in consumer-facing services came from increases in “retail trade, except of motor vehicles & motorcycles” and “other personal service activities” which was largely balanced by a reduction for “wholesale & retail trade, & repair of motor vehicles & motorcycles.” 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 (12 June) or on request from MTA.