The ONS estimate for GDP growth in February came out at a surprisingly strong +0.5%; this was coupled with a slight uplift to the January figure which is now flat (from -0.1%), as well as revisions to earlier months. In addition to the growth in manufacturing, the service sector came out better than had been anticipated.
This note concentrates on the other two main sectors of the economy – services and construction. However, it is worth noting that the main reason for the upward revision to growth in January was the output of the mining & quarrying industry which is now estimated to have grown by +0.8% compared to the original release which showed a fall of -3.3%.
While we expect volatility in high frequency, monthly data, there does appear to be something strange in the monthly output series. The most likely culprit is the seasonal adjustment process and this can be seen a bit more clearly in the quarterly data. Over the past couple of years, the UK economy has grown relatively strongly in the first half before a flat trend in the last two quarters (and especially in Q3). There will be more discussion of this at our Spring Economic Update (see https://www.mta.org.uk/event/save-the-date-mta-spring-economic-update-2025/ to register).
The service sector grew by +0.3% in February after unrevised growth of +0.1% in January. Overall, output of this sector in the 3 months to February was +0.6% higher than in the previous period. In February, output increased in 9 of the 14 sub-sections of this sector.
The largest positive contribution in the services sector in February came from the “information & communication subsector”; at the industry level in this subsector there were widespread rises with the largest positive contributions coming from “computer programming, consultancy & related activities”, “telecommunications” and “publishing activities”. There was also a significant contribution from the “wholesale & retail trade; repair of motor vehicles & motorcycles” sub-sector – all three industries in this group grew in February, led by “wholesale & retail trade & repair of motor vehicles & motorcycles.
Consumer-facing services outpaced the sector as a whole in February with growth of +0.7% but over the 3-month period, it was in-line with growth of +0.6%; this was partly because this output in this group in January was revised down to -0.1% (from +0.1%).
The construction sector saw output increase by +0.4% following a fall of -0.3% in January (this was revised down from -0.2%). This leaves means no change in output over the three months to February compared to the previous period. The improvement in February came from both new work (+0.3%) and repair & maintenance (+0.5%).
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 (11 April) or on request from MTA.