5. Long-term perspective shows subdued growth in the services sector

Figure 4: The services sector grew by 1.6% in June to August 2018 compared with the same period a year earlier Services growth, three months on three months a year earlier, November to January 2016 until June to August 2018 Source: Office for National Statistics Download this chart Figure 4: The services sector grew by 1.6% in June to August 2018 compared with the same period a year earlier Image .csv .xls

Growth within the services sector has been comparatively subdued, as seen when examining the current three-month period compared with the same three months a year earlier. Growth rates remained broadly constant throughout 2016 and most of 2017, however, there has been a slowdown in growth since July 2017. Since then, three-month on a year ago growth was lowest in March and April 2018, with a slight recovery in more recent periods.

Rolling three-month services growth was 0.5%. There was broad-based growth, with 8 out of 14 subsectors showing positive growth. Notably, wholesale and retail trade showed strong growth, in part due to warmer than usual weather in the summer months.

Monthly growth in the services sector was flat. Accommodation and food service activities was the biggest drag with growth of negative 1.6%, falling back from high growth in July 2018. This was offset by a rise in motor trade in August 2018, with a growth of 1.7%. The Society of Motor Manufacturers and Traders (SMMT) also reported higher demand than usual for the month of August, ahead of regulatory changes in September 2018.

Figure 5: Information and communication output continues to rise, driven by computer programming Monthly index, September 2016 to August 2018 Source: Office for National Statistics Download this chart Figure 5: Information and communication output continues to rise, driven by computer programming Image .csv .xls

The information and communication industry also provided a strong contribution to monthly growth (0.08 percentage points), continuing the trend seen over the past two years. Figure 5 shows the index for this industry has grown well above the index for the services sector as a whole. Within information and communication, computer programming has been particularly strong (see Index of Services bulletin).