The headline last week was that, with a surprisingly strong month-on-month trend of +0.4% in December, the UK economy grew by +0.1% in Q4-24. This was helped by the downward revision to Q3 to a flat picture at the usual one decimal place. Despite the very weak end to the year, the UK economy is estimated to have grown by +0.9% in 2024.
Before looking at the latest data at the sector level, it is worth exploring the revisions to the GDP data for the earlier quarters in 2024. Quarter-on-quarter growth in the 1st quarter is now estimated to have been +0.8% (+0.7% in the previous estimate) and, while there is no change to the growth rates for the 2nd and 3rd periods of the year (+0.4% and zero respectively), the levels mean that the trend in Q3 is now rounded up from a marginally negative figure to zero rather than being rounded down at one decimal place.
We have noted the trends for the manufacturing sector in a separate report this week, but the fall in output was the outlier in the economy in the 4th quarter with the service sector growing by +0.2% and construction by +0.5%. Similarly, for 2024 as a whole, while services were up by +1.3% over 2023 and construction output increased by +0.3%, the manufacturing sector declined by -0.7%.
The growth in the construction sector in Q4-2024 was due to a +1.2% increase in new work with repair & maintenance activity declining by -0.4%. The main contributor to the former was private new housing, while fall in the latter was driven by private housing repair & maintenance.
There was a fairly even split at the top level of the services sector for the 4th quarter, with output of business-facing services growing by +0.2%, while consumer-facing services increased by +0.1%; this gave overall growth for the sector of +0.2%. However, for 2024 overall, the growth in the service sector of +1.3% came from a rise of +1.6% in the business-facing services, while consumer facing activity declined by -0.2%.
In the 4th quarter, the largest positive contributor to growth in services came from “human health & social work activity” (+0.9%), with the same rate of increase from “professional, scientific & technical activities” making the second largest positive contribution to growth. The most significant negative contributor came from “administrative & support service activities” which fell by -1.4%, driven mainly by a -5.3% fall in “employment activities”.
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 (13 February) or on request from MTA.