The weakness in manufacturing was the main reason for the fall of -0.1% in UK GDP in January that the ONS announced this morning; it is also partly a reaction to the significant growth in December (+0.4%). Growth in the services sector meant that the economy expanded by +0.2% in the 3 months to January 2025 compared to previous period.
Our other note covers the manufacturing sector, so we will concentrate on the construction and services groups here; however, it is also worth noting that there was also a sharp fall in oil & gas extraction (-3.7% month-on-month), which is part of the wider production sector.
Output of the construction sector fell by -0.2% in both December and January, with the latter coming entirely from new work which was down by -0.7% while repair & maintenance grew by +0.4%. However, there is a different pattern if you look at the rolling 3-month trends where construction output grew by +0.4% in the period to January 2025; that was due to an increase in new work of +1.4% being partly balanced by a decline of -0.9% in repair & maintenance activity. The growth in new work came mainly from the “public other new work” category, while the weakness in repair & maintenance was led by “private housing”.
The services sector had month-on-month growth of +0.1% in January 2025, following an increase of +0.4% in December; this meant that output of this sector grew by +0.4% in the latest 3-month period. In the monthly data, 6 of the 14 sub-sectors grew, 1 was unchanged and 7 showed a fall in output.
The largest positive contribution in the services sector in January 2025 came from “administrative & support services” with “rental & leasing activities” and “services to buildings & landscape activities” particularly strong in the first month of the year. There was also a significant contribution to growth in this sector from the “retail trade, except of motor vehicles and motorcycles” with strong growth in food store sales being reported following falls in recent months.
The largest negative contribution in January 2025 came from “accommodation & food service activities”, with both “food & beverage service activities” and “accommodation” seeing sharp falls in 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 (14 March) or on request from MTA.