Index of Services, UK: June 2015

Monthly movements in output for the services industries: distribution, hotels and restaurants; transport, storage and communication; business services and finance; and government and other services.

This is not the latest release. View latest release

29 November 2016

Following a quality review, a processing error has been identified in the compilation of the estimates for the rail transport industry (49.1-2), which affects the period Quarter 1 1997 to Quarter 2 2016. In line with the National Accounts revision policy, this error will be corrected in the Index of Services and Quarterly National Accounts due for publication on 23rd December 2016 for data from Quarter 1 2015 and in the Blue Book 2017 consistent releases for data prior to this period. The average impact over this period on quarter-on-quarter Index of Services and GDP growth is 0.00%. This processing error does not impact quarter on quarter growth into Quarter 3 2016.

Contact:
Email Robert Doody

Release date:
28 August 2015

Next release:
30 September 2015

Table of contents

  1. Main points
  2. Understanding the Index of Services (IoS)
  3. Main information
  4. Economic background
  5. GDP impact and components
  6. Component analysis
  7. Industry spotlight: Accounting, bookkeeping and auditing activities; tax consultancy
  8. Background notes
  9. Methodology

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1. Main points

  • The Index of Services is estimated to have increased by 3.0% in June 2015 compared with June 2014. All of the 4 main components of the services industries increased in the most recent month compared with the same month a year ago
  • The largest contributions came from: business services and finance, which contributed 1.4 percentage points to total growth; and distribution, hotels and restaurants, which contributed 0.8 percentage points to total growth
  • The latest Index of Services estimates show that output increased by 0.5% between May 2015 and June 2015, following an increase of 0.2% between April 2015 and May 2015
  • The Index of Services increased by 0.7% in Quarter 2 (Apr to June) 2015 compared with Quarter 1 (Jan to Mar) 2015. This figure was unrevised from the estimate used in the Gross Domestic Product Preliminary Estimate (GDP), published on 28 July 2015. This figure is consistent with the Second Estimate of GDP, published on 28 August 2015
  • The figures within this release are estimates and are on a seasonally adjusted basis. The earliest period open for revision in this release is April 2015
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2. Understanding the Index of Services (IoS)

About the IoS

The monthly IoS provides a timely indicator of growth in the output of the services industries. The IoS is an important economic indicator and shares exactly the same industry coverage as the corresponding quarterly series within UK gross domestic product (GDP). The primary purpose of the IoS is to produce a short-term measure of the output of the services industries within the UK economy and show the monthly movements in the gross value added (GVA) of the service industries (2007 Standard Industrial Classification (SIC 2007 ) sections G to T).

The 4 main components of the services industries are:

  • distribution, hotels and restaurants

  • transport, storage and communication

  • business services and finance

  • government and other services

The IoS is the largest contributor to the output approach to the measurement of GDP, accounting for 78.4% of UK GDP in 2011.

All data in this bulletin are seasonally adjusted estimates and have had the effect of price changes removed (in other words, the data are deflated). Further information on some of the main concepts (including seasonal adjustment and deflation) underlying the estimates can be found in background note 9.

The quality of the IoS

The IoS is published around 8 weeks after the end of the reference month. There is no simple way of measuring the accuracy of the IoS, that is, the extent to which the estimate measures the underlying “true” value of the output growth (of the services industries) in the UK for a particular period. All estimates, by definition, are subject to statistical uncertainty and for many well-established statistics the Office for National Statistics (ONS) measures and publishes the sampling error associated with the estimate, using this as an indicator of accuracy. However, as IoS is constructed from a wide variety of data sources, some of which are not based on random samples, we don’t publish a measure of the sampling error associated with the IoS.

Reliability is one dimension of measuring accuracy, using evidence from analyses of revisions to assess the closeness of early estimates to subsequent estimated values. Revisions are an inevitable consequence of the trade-off between timeliness and accuracy. Figures for the most recent months are provisional and subject to revision in light of:

  • late responses to surveys and administrative sources

  • forecasts being replaced by actual data

  • revisions to seasonal adjustment factors, which are re-estimated every month and reviewed annually

Revisions to the IoS are typically small (around 0.1 to 0.2 percentage points), with the frequency of upward and downward revisions broadly equal. More information on the most recent revisions analysis can be found in the component analysis section and in background note 14.

It should be noted that care should be taken when using the month-on-month growth rates, due to their volatility (background note 8).

Further information on the quality of the IoS is available in the Quality of the IoS (29 Kb Pdf) report on the Index of Services Methods page on our website. It should be noted that as part of the IoS industry review process, we are continually working on methodological changes to improve the accuracy of the IoS.

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3. Main information

Table 1: Index of Services main information, June 2015

UK
Percentage change
 Index number (2011=100)Most recent month on a year earlierMost recent 3 months on a year earlierMost recent month on previous monthMost recent 3 months on previous 3 months
Index of services110.23.02.80.50.7
Source: Office for National Statistics

Download this table Table 1: Index of Services main information, June 2015

.xls (54.8 kB)

The Index of Services (IoS) measures the quantity of output from all UK services industries, which account for more than three-quarters of the output approach to the measurement of gross domestic product. Index values are presently referenced to 2011 so that the average for 2011 is equal to 100. Therefore, an index value of 110 would indicate that output is 10% higher than the average for 2011.

As seen in Figure 1, the IoS increased by 3.0% in June 2015 compared with June 2014. In order of their contribution to growth (listed in reference table IOS1):

  1. business services and finance increased by 3.4%

  2. distribution, hotels and restaurants increased by 4.6%

  3. transport, storage and communication increased by 4.4%

  4. government and other services increased by 0.6%

Further detail on these movements can be found in the component analysis section.

Figure 1: IoS contributions(1) to the month-on-month a year ago percentage change, June 2015

UK

Source: Office for National Statistics

Notes:
  1. Individual contributions may not sum to the total due to rounding
  2. Percentage change

Download this chart Figure 1: IoS contributions(1) to the month-on-month a year ago percentage change, June 2015

Image .csv .xls

Between May 2015 and June 2015, as seen in Figure 2, the IoS increased by 0.5%.

All 4 main components of the services industries increased in the most recent month compared with the previous month. In order of their contribution to growth (listed in reference table IOS1):

  1. business services and finance increased by 0.7%

  2. transport, storage and communication increased by 1.0%

  3. distribution, hotels and restaurants increased by 0.6%

  4. government and other services increased by 0.1%

More detail on individual components can be found in the IOSCOMP tables in the data section of this bulletin. The tables also provide information on the growth for the 3 months ending in June 2015 compared with the previous 3 months and compared with the 3 months ending June 2014.

Figure 2: IoS contributions(1) to the month-on-month percentage change, June 2015

UK

Source: Office for National Statistics

Notes:
  1. Individual contributions may not sum to the total due to rounding
  2. Growth rates are calculated from 4 decimal place indices before being rounded to 1 decimal place. The growth rate in services is equal to 0.55 to 2 decimal places but 0.5 to 1 decimal place

Download this chart Figure 2: IoS contributions(1) to the month-on-month percentage change, June 2015

Image .csv .xls

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4. Economic background

Total services grew by 2.8% between Quarter 2 (Apr to June) 2014 and Quarter 2 (Apr to June) 2015, and by 0.7% between Quarter 1 (Jan to Mar) 2015 and Quarter 2 (Apr to June) 2015. This is compared with growth rates of 2.6 % and 0.7 % for the economy as a whole.

Historically, the services industries have grown at a faster rate than all other headline industries. While GDP has grown at an average compound annual rate of 2.0% since 1997, services has grown at an average compound annual rate of 2.8% (more information can be found in Second Estimate of Gross Domestic Product - Quarter 2 (Apr to June) 2015. This has led to a continuing re-orientation of the economy towards services, despite productivity in the services industries rising more slowly than in the production industries (and manufacturing in particular) since 1997 (more information can be found in Labour Productivity, Quarter 1 (Jan to Mar) 2015). The higher output growth, therefore, reflects the increasing share of the labour force employed in services, which has grown from 73.0% to 79.0% between 1997 and 2014 (Labour Market Statistics, August 2015, reference table EMP13).

Figure 3 shows the share of gross value added accounted for by services in the UK and in other G7 economies (more information on data for France, Germany, Italy, Japan and the USA can be found on the Organisation for Economic Co-operation and Development (OECD) website). In 1997, the share of gross value added accounted for by services in the UK was just under 70%, around the middle of the range relative to the other G7 economies. By 2013, its share had risen to almost 80%, therefore the UK economy has become the most reliant on services among the G7 countries considered.

Figure 3: Services as a percentage of total gross value added in comparable economies(1) to the UK

1997 to 2013

Source: Office for National Statistics, Organisation for Economic Co-operation and Development

Notes:
  1. OECD data correct at 24 August 2015

Download this chart Figure 3: Services as a percentage of total gross value added in comparable economies(1) to the UK

Image .csv .xls

In addition to strong long-run growth, the services industries were also less affected by the downturn in 2008 than other industries, such as production and construction and subsequently recovered more quickly. The services industries are mainly responsible for the recovery of the economy as a whole, being the only industry grouping to have surpassed its pre-downturn peak.

We have looked at the growth rates of the different industry groupings since 1997 in previous releases of the Index of Services.

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5. GDP impact and components

With a weight of 78.4%, the services industries are the largest industrial grouping in the output approach to measuring GDP. The releases for the short-term economic indicators that feed directly into the output approach to measuring GDP include a table detailing growth in the 4 main industrial groupings (Table 2). This will aid understanding of the relationship between the individual short-term releases and GDP output.

In Quarter 2 (Apr to June) 2015, GDP was estimated to have increased by 0.7% compared with the previous quarter. The contribution an industry grouping makes to the GDP quarterly growth is dependent on the quarterly change in that industry grouping and its weight within the output approach to measuring GDP.

Figure 4: GDP contribution(1) to the quarter-on-quarter percentage change, Quarter 2 (Apr to June) 2015

UK

Source: Office for National Statistics

Notes:
  1. Contributions are to output gross value added and therefore may not sum to the percentage change in GDP. More information on the difference between the 2 measures can be found in the Short Guide to National Accounts
  2. Percentage change to 1 decimal place

Download this chart Figure 4: GDP contribution(1) to the quarter-on-quarter percentage change, Quarter 2 (Apr to June) 2015

Image .csv .xls

Monthly estimates are produced for each industrial grouping except agriculture. The June 2015 estimates for production and construction were published on 6 August 2015 and 14 August 2015 respectively. The Second Estimate of Gross Domestic Product for Quarter 2 (Apr to June) 2015 was published on 28 August 2015, alongside this bulletin.

Table 2: GDP output component tables, Quarter 2 (Apr to June) 2015, chained volume measure, seasonally adjusted

UK
Percentage change
Publication% of GDPRelease datePeriod of GDPMost recent quarter on a year earlierMost recent quarter on the previous quarter
Index of Production14.606 AugQ21 20151.50.7
   Q12 20151.00.2
Construction output6.414 AugQ2 20152.40.2
   Q1 20154.4-0.2
Index of Services78.428 AugQ2 20152.80.7
   Q1 20153.10.4
Retail Sales 20 AugQ2 20154.40.7
   Q1 20155.40.8
Agriculture0.6 Q2 20150.2-0.1
   Q1 20152.5-2.3
Source: Office for National Statistics
Notes:
1. Q2 is Quarter 2 (Apr to June)
2. Q1 is Quarter 1 (Jan to Mar)

Download this table Table 2: GDP output component tables, Quarter 2 (Apr to June) 2015, chained volume measure, seasonally adjusted

.xls (34.8 kB)

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6. Component analysis

Table 3: Growth rates and contributions(1) to the Index of Services, June 2015

UK     
Percentage change
Description% of ServicesMonth on a year earlier Volume (SA2) (%)Contribution to services (% points)Month on month growth Volume (SA) (%)Contribution to services (% points)
Total services industries1003.03.00.50.5
Distribution, hotels and restaurants184.60.80.60.1
Transport, storage and communication134.40.61.00.1
Business services and finance393.41.40.70.3
Government and other services300.60.20.10.0
Source: Office for National Statistics
Notes:
1. Individual contributions may not sum to the total due to rounding
2. SA = seasonally adjusted

Download this table Table 3: Growth rates and contributions(1) to the Index of Services, June 2015

.xls (27.1 kB)

Distribution, hotels and restaurants

The index of distribution, hotels and restaurants increased by 4.6% in June 2015 compared with June 2014, following an increase of 4.2% in May 2015 compared with the same month a year earlier. The main contributors to the increase were: retail trade, except of motor vehicles and motorcycles, which rose by 4.0%; wholesale and retail trade and repair of motor vehicles and motorcycles, which rose by 9.6%; and accommodation, which rose by 13.6%.

Transport, storage and communication

The index of transport, storage and communication increased by 4.4% in June 2015 compared with June 2014, following an increase of 4.0% in May 2015 compared with the same month a year earlier. The main contributors to the increase were: publishing audiovisual and broadcasting activities, which rose by 11.3%; computer programming, consultancy and related activities, which rose by 6.0%; and land transport, which rose by 3.3%.

Business services and finance

The index of business services and finance increased by 3.4% in June 2015 compared with June 2014, following an increase of 3.0% in May 2015 compared with the same month a year earlier. The main contributors to the increase were: other professional service activities, which rose by 5.7%; administrative and support services activities, which rose by 4.4%; and real estate activities, which rose by 1.9%.

Government and other services

The index of government and other services increased by 0.6% in June 2015 compared with June 2014, following an increase of 0.5% in May 2015 compared with the same month a year earlier. The main contributors to the increase were: human health and social work activities, which rose by 2.0%; other service activities, which rose by 2.5%; and activities of households as employers of domestic personnel, which rose by 7.4%.

Revisions

The Index of Services (IoS) follows the National Accounts Revisions policy (43.3 Kb Pdf) . Revisions are caused by a number of factors including, but not limited to:

  • revisions to source data due to late responses

  • actual data replacing forecast data

  • revisions to seasonal factors that are re-estimated every period

More information on IoS revisions is available on the Index of Services Methods page.

We produce revisions triangles of services growth to provide users with one indication of the reliability of this main indicator. Statistical tests are performed on the average revision to test if it is statistically significantly different to 0. Further information can be found in background note 15.

In this release of data, the earliest period open to revision is April 2015. The growth rate for April 2015 compared with April 2014 (2.8%) was unrevised. The month-on-month growth rate for April 2015 compared with March 2015 (0.2%) was also unrevised. The growth rate for May 2015 compared with May 2014 was revised down 0.1% from 2.7% to 2.6%. The largest contributor to the revision was business services and finance. The month-on-month growth rate for May 2015 compared with April 2015 was revised down 0.1% from 0.3% to 0.2%. The largest contributor to the revision was business services and finance.

Further detail on the revisions to the IoS components can be found in the RIOS1 tables in the data section of this publication.

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7. Industry spotlight: Accounting, bookkeeping and auditing activities; tax consultancy

According to the UK Standard Industrial Classification 2007 (SIC2007), industry 69.2 covers activities such as bookkeeping and the preparation or examination of financial accounts. It also covers tax consultancy, which includes both the preparation of tax returns (for individuals or businesses) and advisory activities, including representation on behalf of clients before tax authorities.

In 2012, the industry’s share of whole economy output and total intermediate consumption were roughly the same at 1.1% and 1.0% respectively (Second Estimate of GDP – Quarter 2 (Apr to June) 2015 and Input-Output Supply and Use tables, 2014 edition). Between 1997 and 2012, these shares have increased slightly, signalling stronger growth relative to the remainder of the economy.

This industry is included under the legal and accounting activities grouping within services, along with legal activities, which was examined in last month’s index of services release. It accounted for around 40% of the output of the legal and accounting activities grouping in 2014.

Figure 5: Index of Services and accounting, bookkeeping and auditing activities; tax consultancy

UK, 1990 to 2015

Source: Office for National Statistics

Notes:
  1. Q1 is Quarter 1 (Jan to Mar)

Download this chart Figure 5: Index of Services and accounting, bookkeeping and auditing activities; tax consultancy

Image .csv .xls

The performance of this industry was similar to that of the entire services industries between 1990 and 1996. However, it subsequently grew at a compound average annual growth rate of 6.4% between 1997 and 2007, a faster rate compared with a compound growth rate of 3.9% for the entire services industries. Compound average growth is the rate at which a series would have increased or decreased if it had grown or fallen at a steady rate over a number of periods.

The economic downturn had a large impact on the industry, with output contracting by 11.5% between the economy’s peak in Quarter 1 (Jan to Mar) 2008 and the economy’s trough in Quarter 3 (July to Sept) 2009. In contrast, the entire services industry contracted by just 3.9% over the same period (Second Estimate of GDP – Quarter 2 (Apr to June) 2015). Between the 2008 and 2009 calendar years, the number of new accountancy businesses created fell by 3.4% while the number of accountancy firms that ceased to trade rose by 11.3%, coinciding with this contraction in output (Business Demography, 2013). In 2010, this industry started to recover strongly and in Quarter 2 (Apr to June) 2015 output was 18.9% above its pre-downturn peak (Second Estimate of GDP – Quarter 2 (Apr to June) 2015).

The services produced by this industry are often used in the production process (as intermediate consumption) by a wide range of industries and in 2012, this totalled around £15 billion. Around 35% of the intermediate consumption of the industry’s products can be attributed to just 5 industries, shown in Figure 6, which are all also within the services industries.

The industries which use the highest amount of its products as a share of their intermediate consumption are the legal activities and the architectural and engineering activities; technical testing and analysis industries (at 7.6% and 7.5% of their total intermediate consumption, respectively) (Input-Output Supply and Use tables, 2014 edition).

Between 1997 and 2012, the share of the 5 industries’ total intermediate consumption allocated to industry 69.2’s products was growing steadily with the exception of architectural and engineering activities (industry 71) which contracted quite sharply during the economic downturn (Input-Output Supply and Use tables, 2014 edition).

Figure 6: The top 5 consumers of accounting, bookkeeping and auditing activities; tax consultancy (percentage total of their intermediate consumption)

UK, 1997 to 2012

Source: Office for National Statistics

Download this chart Figure 6: The top 5 consumers of accounting, bookkeeping and auditing activities; tax consultancy (percentage total of their intermediate consumption)

Image .csv .xls

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.Background notes

  1. What’s new

    Blue Book 2015

    The Index of Services for July 2015 to be published on 30 September 2015 will include revisions back to 1997. This will be in line with the open revision period for the 2015 Blue Book publication in October 2015. The estimates will also be consistent with the Quarterly National Accounts published on 30 September 2015.

    These annual changes will include updating the reference year from 2011=100 to 2012=100, along with adding an additional year of chain-linking weights for 2012. As part of the annual GDP balancing process annual adjustments will also be made to the services sector to maintain coherence with the balanced GDP figures. ONS has developed an automatic function for assigning the annual adjustments to gross value added. This is designed to be as faithful as possible to the quarterly paths whilst adjusting the overall annual growth rate.

    VAT Project update

    An article titled "Feasibility study into the use of HMRC turnover data within Short-term Output Indicators and National Accounts" has been published (14 August 2015). The project is exploring ways in which HM Revenue & Customs (HMRC) administrative data could be used to quality assure, supplement or replace the current turnover-based ONS surveys. This article is the first of a series of planned articles into this work.

  2. What do you think?

    As a user of our statistics we would welcome your feedback on this publication. If you would like to get in touch please contact us via email: ios.enquiries@ons.gov.uk.

  3. Special events

    We maintain a list of candidate special events in the Special Events Calendar. As explained in our Special Events policy, it is not possible to separate the effects of special events from other changes in the series.

  4. Understanding the data

    Short guide to the Index of Services

    The Index of Services shows the monthly movements in the gross value added (GVA) of the service industries (2007 Standard Industrial Classification (SIC 2007) sections G to T). These industries account for around 78% of gross domestic product (GDP) in 2011. The index is estimated using the same data sources and national accounts methodology as the quarterly estimate of services industries’ gross value added within the output approach to measuring GDP (GDP (O)). These consist of the distribution, hotels and restaurant industries (SIC 2007 sections G and I); transport, storage and communication (sections H and J); business services and finance (sections K to N); and government and other services (sections O to T).

  5. International comparison

    International comparison with the IoS is difficult, as most comparable economies don’t produce equivalent estimates. Eurostat turnover in services estimates are not comparable with the IoS, as they exclude the wholesale and retail trade; furthermore, most of the estimates are only available quarterly. The USA also produces services output estimates, but only on a quarterly basis, with a 4 month lag time. Japan has a direct equivalent of the IoS, but the estimates are not seasonally adjusted. The closest equivalent estimates are from Canada, which produces a monthly output estimate of GDP with a breakdown by industry (including an aggregate for services). There are also comparable quarterly estimates from Sweden and Ireland.

  6. Short guide to national accounts

    The national accounts provide an integrated description of all economic activity within the economic territory of the UK, including activity involving both domestic units (that is, individuals and institutions resident in the UK) and external units (those resident in other countries). In addition to being comprehensive, the accounts are fully integrated and internally consistent. More information can be found in UK national accounts: a short guide (105.5 Kb Pdf).

  7. How our statistics explain the economy

    The IoS is mentioned in an interactive version of 14 ways ONS statistics help you understand the economy, which was released on our website on 27 June 2014, alongside Quarterly National Accounts for Quarter 1 (Jan to Mar) 2014

  8. Interpreting the data

    Some monthly data are volatile. When looking at growth rates, the headline IoS figures focus on the percentage change between the most recent month-on-a-year earlier and the most recent 3 months-on-a-year earlier.

    The monthly Index of Services statistical bulletin is usually published on the same days as the Gross Domestic Product Preliminary Estimate statistical bulletin, the Second Estimate of Gross Domestic Product statistical bulletin or the Quarterly National Accounts statistical bulletin.

    The data for the IoS in this statistical bulletin are generally consistent with the Second Estimate of Gross Domestic Product for Quarter 2 (Apr to June) 2015, published on 28 August 2015. However, rounding can sometimes cause differences between the 3-monthly growth rates presented in this release, compared with the quarterly growth rates presented in Second Estimate of Gross Domestic Product. Data for the retail industry are broadly comparable with the Retail Sales release, published on 20 August 2015, but as the 2 series operate under different revisions policies, there can be timing differences in the updating of the 2 series. Also, adjustments to the data within the IoS release are sometimes made at the time of the Blue Book to improve the coherence of the 3 approaches to measuring GDP. Therefore, inconsistencies between the 2 series are not unusual but tend to be small. There are also conceptual and coverage differences between retail sales and retail output which can lead to apparent inconsistencies.

  9. Definitions and explanations

    Definitions found within the main statistical bulletin are listed:

    Index number

    An index number is a number which indicates the change in magnitude relative to the magnitude at a specified point, the latter usually taken as 100. For example, the level of services for June 2015 is given in Table 1 as 110.2. This means that services output was 10.2% higher than the average in the reference period, which is currently 2011.

    Seasonal adjustment

    The index numbers in this statistical bulletin are all seasonally adjusted. This aids interpretation by removing annually recurring fluctuations, for example, due to holidays or other regular seasonal patterns. Unadjusted data are also available.

    Seasonal adjustment removes regular variation from a time series. Regular variation includes effects due to month lengths, different activity near particular events such as shopping activity before Christmas, and regular holidays such as the May bank holiday.

    Some features of the calendar are not regular each year, but are predictable if we have enough data, for example, the number of certain days of the week in a month may have an effect, or the impact of the timing of Easter. As Easter changes between March and April, we can estimate its effect on time series and allocate it between March and April depending on where Easter falls. Estimates of the effect of the day of the week and Easter are used respectively to make trading day and Easter adjustments prior to seasonal adjustment.

    X-13-ARIMA-SEATS is the current seasonal adjustment software used for the IoS.

    Value (current price)

    Economic transactions involve the production of goods and the sale of goods and services (commodities). The monetary value (or current price) of these transactions is a product of the quantity produced or sold and the unit price. In a particular period, the total (aggregate) value of all transactions taking place in the economy is simply the sum of the individual transaction values in that period. The current price is sometimes referred to as the "nominal" price.

    Volume (constant price)

    When it comes to comparing the difference in aggregate values between 2 time periods, the observed movement is generally a combination of changes in quantity and changes in price. In a lot of cases, the interest of users of economic data lies in understanding the degree to which economic growth is being driven by changes in quantities (that is, physical volumes of production and consumption). It is standard practice to present many economic statistics as volume series (showing changes in the level of the series that have not been affected by changes in price) and such series are referred to as "at constant prices" or "real" prices.

    Deflation

    The process of removing price changes from a value series and converting to a volume series is known as deflation. All index numbers presented in this bulletin are volume measures and have had the effect of price changes removed.

    Chained volume measures

    The indices in this bulletin are presented as "chained volume" measures, meaning that successive volume estimates have been linked (or chained) together. Annual chain-linking was introduced in 2003 and is considered preferable to producing standard volume series, as chained volume measures more accurately reflect volume changes over time. More information on chain-linking can be found in the Tuke and Reed (2001) (92.8 Kb Pdf) article, and a paper on chain-linking weights in the output approach to measuring GDP can be found on the Methods and Sources page.

    Gross domestic product (GDP)

    The total value of production activity in the economic territory. It is the balancing item on the production account for the whole economy. Domestic product can be measured gross or net of consumption of fixed capital (or depreciation). It is presented in the accounts at market (or purchasers’) prices. A further distinction is that it can be at current prices or chained volume measures.

  10. Methods

    Index of Services methodology can be found on our website.

  11. Composition of the data

    The IoS uses a wide variety of different data, from many sources, which are produced on either an annual, quarterly or monthly basis.

    Some of the indicators are derived using current price turnover deflated by a suitable price index. This includes data from the monthly business survey (MBS): an ONS short-term survey on different parts of the economy. It is one of the main data sources used in the compilation of the IoS.

    More information on monthly business survey data can be found within the Economic and Labour Market Review release (2.65 Mb Pdf).

    Other sources use direct volume measures that don’t need to be deflated, such as Civil Aviation Authority data for air transport. Other proxies, such as employment numbers, are also used. This is the case with Public Sector Employment and Workforce Jobs data.

    Where monthly data are not available (for example, when data are delivered quarterly or annually), monthly estimates are derived by forecasting data. This is done using the X-13-ARIMA-SEATS forecasting method and interpolating a monthly path using a cubic spline.

    An X-13-ARIMA-SEATS forecast is also used where actual data at industry level are not available for the latest period (a lower proportion of actual data are available for the latest month). When the forecast is replaced by actual data, this may lead to revisions to the published data.

    The IoS adheres to the Government Statistical Service Disclosure Control Policy (337 Kb Word document). More information can be found in the Quality and Methodology Information (QMI) (207.3 Kb Pdf) report.

  12. Response rates

    Approximately 42% of the IoS estimates are based on data collected via our monthly business survey (MBS). In addition, approximately 7% of the IoS estimates are collected via our retail sales inquiry (RSI). The remainder is based on data received from other ONS sources and external data sources. The MBS and RSI response rates for data included in this publication are presented for the current months and the 3 months prior in Table 4. The response rates for the previous periods are updated to reflect the current level of response, incorporating data from late returns. There are 2 response rates included; the first is a percentage of the sampled turnover returned and the other is a percentage of the amount of questionnaire forms returned.

    Table 4: Survey response rates, Mar 2015 to June 2015

    UK    
    Response rates (%)
    PeriodMarch 2015April 2015May 2015June 2015
    Monthly Business Survey (Services)
    Turnover95.894.694.287.2
    Questionnaire84.684.082.673.5
    Retail Sales Inquiry
    Turnover99.098.799.097.7
    Questionnaire77.377.577.374.0
    Source: Office for National Statistics

    Download this table Table 4: Survey response rates, Mar 2015 to June 2015

    .xls (55.8 kB)

    Historical MBS response rates for the services industries as at the time of the relevant publication are also available back to 2010.

  13. Basic quality information

    Some general information on the quality of the Index of Services (IoS) can be found in the "Understanding the Index of Services" section in the main part of this statistical bulletin.

    Additionally, a Quality and Methodology Information (QMI) report for the IoS was published on 11 February 2015. The report pulls together qualitative information on the 5 Eurostat criteria of quality: relevance, accuracy, timeliness and punctuality, accessibility and clarity, and comparability and coherence, and provides a summary of the methods used to compile the IoS output, describing the strengths and limitations of the estimates produced.

    Further quality information, including details of the quality adjustments process for IoS, was published on 31 October 2014 and can be found on the Index of Services methods page on our website.

  14. National accounts revisions policy

    Main documentation explaining the national accounts revisions policy (43.3 Kb Pdf) is available.

  15. Revisions triangles

    SIC 2007 revisions triangles are contained in a zip folder. This folder can be found within the data section of this bulletin.

    Revisions to data provide one indication of the reliability of main indicators. A statistical test has been applied to the average revision to find out if it is statistically significantly different from 0. An average revision close to 0 is desirable as it suggests that revisions are not predictable in any one direction. The result of the test is that the average revision is not statistically significantly different from 0.

    Table 5 presents a summary of the differences published between June 2009 and June 2014 and the estimates published 12 months later.

    Table 5: Revisions between first publication and estimates 12 months later

    UK
    Percentage change
     Value in latest periodAverage over the last 60 monthsAverage over the last 60 months without regard to sign (average absolute revision)
    Index of Services 3 month on 3 month growth rate0.7-0.060.17
    Index of Services 1 month on 1 month growth rate0.5-0.030.18
    Source: Office for National Statistics

    Download this table Table 5: Revisions between first publication and estimates 12 months later

    .xls (32.8 kB)

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    We provide an analysis of past revisions in the IoS and other statistical bulletins; more information can be found in Revisions information in ONS First Releases.

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