Somewhat against expectations, the ONS reported that UK GDP fell by -0.1% month-on-month in May. There was a mix of trends behind this second consecutive negative trend with consumer-facing services falling, largely on the back of weak retail sales; manufacturing and construction also declined and the rebound in non-consumer-facing services was not quite enough to outweigh these negatives.
We cover the manufacturing sector in its own note this week, so we will concentrate on the construction and services groups here; however, it is worth noting that mining & quarrying output, which is part of the wider production sector, also fell and was not balanced by growth in activity among the utilities that are part of industrial production.
Total services output is estimated to have grown by +0.1% in May, after falling by -0.3% in April (revised from a -0.4% fall in last month’s release); in the three months to May 2025, (compared with the three months to February), the services sector is estimated to have grown by +0.4%.
Focusing on the 2nd measure which removes some of the “noise” in the monthly figures, the largest positive contributions at the subsector level were from “information & communication” (+3.2%) and “administrative & support service activities” (+2.3%). It is also worth noting the trends for “professional, scientific & technical activities” which, thanks to “legal activities” has been on a see-saw ride recently; this industry saw output rise by +6.1% in May, after falling by -10.2% in April, and growing by +6.8% in March as it includes conveyancing solicitors who saw demand affected by the recent changes to Stamp Duty Land Tax (SDLT) on 1st April.
Consumer-facing services output rose by +0.7% in the three months to May 2025 (compared with the three months to February) but there was a reduction of -1.2% in May itself, following 3 consecutive months of growth. This was led by retail sales, but the were also reductions in “sports activities & amusement parks & recreation activities” and “travel agency & tour operator & other reservation services” which were partly offset by a positive contribution from “accommodation”.
Finally in this note, the construction sector saw output fall by -0.6% in May, again following three months of growth which means that the rolling 3-month trend was still positive at +1.2%. In the latest 3 months (March to May 2025), new work was +0.9% higher than in the previous 3 months (December 2024 to February 2025), with repair & maintenance activity growing by +1.5%. Infrastructure new work made the largest contribution to the former group with non-housing activity leading the way for repair & 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 (11 July) or on request from MTA.