|Index number 2006=100||Most recent month on a year earlier||Most recent 3 months on a year earlier||Most recent month on previous month||Most recent 3 months on previous 3 months|
|Index of Services||103.6||1.6||1.2||-0.1||0.5|
Compared to June 2010, the seasonally adjusted index of services increased by 1.6 per cent in June 2011. This increase is mainly due to growth in business services and finance, which increased by 1.6 per cent and government and other services, which increased by 1.2%. Transport, storage and communication also contributed significantly. Other contributions, from distribution and hotels and restaurants were less significant.
Compared to May 2011, the index of services decreased by 0.1 per cent in June 2011. The small decline in June is mainly due to weakness in transport, storage and communication, which fell by 1.6 per cent, and distribution, which fell by 0.7 per cent. These falls more than offset the growth in hotels and restaurants, which grew by 2.0 per cent, and government and other services, which grew by 0.2 per cent.
More detail on the particular divisions driving these changes can be found in the IOSDIVS tables found in the data section of this Bulletin. The tables also provide information on the growth for the three months ending in June 2011 compared to the previous three months and compared to the three months ending June 2010.
The Index of Services measures the chained volume index movements of the UK services sector. The services sector accounts for more than three quarters of total gross domestic product. Figures are adjusted for seasonal variations unless otherwise stated and the reference year is 2006 = 100. For an explanation of the terms used in this bulletin, please see the Background Notes section. Care should be taken when using the month on month growth rates due to their volatility. An assessment of the quality of the services statistics is available in the background notes.
|Description||Growth rates and contributions to the Index of Services1|
|% of Services||Volume (SA) Year on year growth %||Contributions to services (% points)||Volume (SA) Month on month growth (%)||Contribution to services (% points)|
|Total Service Industries||100||1.6||1.6||-0.1||-0.1|
|Hotels and restaurants||3.8||3.6||0.1||2.0||0.1|
|Transport, storage and communication||9.3||3.4||0.3||-1.6||-0.2|
|Business services and finance||40.9||1.6||0.7||0.0||<0.0|
|Government and other services||30.9||1.2||0.4||0.2||0.1|
The seasonally adjusted index of distribution in June 2011 increased by 0.9 per cent compared with June 2010. In particular:
Motor trades rose by 3.9 per cent;
Motor trades contributed approximately 0.7 percentage points to the 0.9 per cent increase.
The seasonally adjusted index of hotels and restaurants in June 2011 increased by 3.6 per cent compared with June 2010. The largest contribution to the increase was hotels.
The seasonally adjusted index of transport, storage and communication in June 2011 increased by 3.4 per cent compared with June 2010:
Output increased in four of the five sub-sectors;
The main movement was in land transport which rose by 5.1 per cent;
Land transport contributed approximately 1.3 percentage points to the 3.4 per cent increase.
The seasonally adjusted index of business services and finance in June 2011 increased by 1.6 per cent compared with June 2010:
The main movement was in other business activities which rose by 5.5 per cent;
Other business activities contributed 1.7 percentage points to the 1.6 per cent increase.
The seasonally adjusted index of government and other services in June 2011 increased by 1.2 per cent compared with June 2010:
The main movement was in health and social work which rose by 3.8 per cent;
Health and social work contributed 1.3 percentage points to the 1.2 per cent increase.
This release conforms to the standard revisions policy for National Accounts. Table RIOS1 shows the revisions to the estimates previously published on 26 July 2011. In this release, the earliest period open for revision is April 2011.
The Index of Services release for July 2011 will have a revisions period back to January 1997. This will be in line with the open revisions period for the 2011 Blue Book publication.
Index of Services currently produces the statistical bulletin and tables in accordance with the 2003 UK Standard Industrial Classification system (SIC03). There will be a move over to a system revised for 2007. From the July 2011 release in October 2011, IoS will be classified on a 2007 UK SIC basis. Further information can be found at the Classifications pages on the ONS website.
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Understanding the data
The Index of Services shows the monthly movements in the gross value added of the service industries (2003 Standard Industrial Classification (SIC 2003) section G to P). This sector accounts for around 74 per cent of gross domestic product (GDP) in 2006. The index is estimated using the same data sources and national accounts methodology as the quarterly estimate of service industries’ gross value added within the output measure of GDP (GDP(O)). These consist of the distribution industries (SIC 2003 section G), hotels and restaurants (section H), transport storage and communication (section I), business services and finance (sections J and K) and government and other services (sections L to P).
Interpreting the data
Some monthly data are volatile. When looking at growth rates, the headline Index of Services figures focus on the percentage change between the most recent month on a year earlier and the most recent three months on a year earlier.
Figures for the most recent months are provisional and subject to revision in light of (a) late responses to surveys and administrative sources, (b) where forecasts are replaced by actual data and (c) revisions to seasonal adjustment factors which are re-estimated every month and reviewed annually (changes from the latest review are included in this release).
In the first and second months of each quarter the Index of Services statistical bulletin is published on the same days as the Gross Domestic Product Preliminary Estimate statistical bulletin and the Second Estimate of GDP (formerly UK Output, Income and Expenditure) statistical bulletin. In the third month of each quarter the Index of Services statistical bulletin is published on the first working day after the Quarterly National Accounts statistical bulletin.
Data for the Index of Services shown in this statistical bulletin are consistent with the Second Estimate of GDP published on 26 August 2011.
Definitions and explanations
Definitions found within the main statistical bulletin are listed:
Chained volume measure
An index number from a chain index of quantity. The index number for the reference period of the index may be set equal to 100 or to the estimated monetary value of the item in the reference period.
Gross Domestic Product
The total value of output 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. It is presented in the new accounts at market (or purchasers’) prices. A further distinction is that it can be at current or constant prices.
A measure of the average level of prices, quantities or other measured characteristics relative to their level for a defined base reference period or location. It is usually expressed as a percentage above or below, but relative to, the base index of 100.
Use of the data
The ONS Work Programme Consultation which ended in December looked at customers views on how ONS could address customers’ needs within a reducing budget.
The Index of Services Methodology can be found on the ONS website.
Composition of the data
The Index of Services 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 the Monthly Business Survey (MBS) data; an ONS short-term survey on different sectors of the economy. It is one of the main data sources used in the compilation of the Index of Services. More information on Monthly Business Survey data can be found within Economic and Labour Market Review: No. 2, February 2011 (2.65 Mb Pdf) .
Other sources use direct volume measures that do not need to be deflated, such as Royal Mail Group data regarding postal services and Civil Aviation Authority data for air transport. Other proxies, such as employment numbers, are used also. This occurs with Public Sector Employment, and Work Force Jobs data.
Where monthly data are not available (for example when data is delivered quarterly or annually), monthly estimates are derived by forecasting data. This is done using the Holt-Winters method and interpolating a monthly path using a cubic spline.
A Holt-Winters forecast is also used where actual data are not available for the latest period (a lower proportion of actual data is available for the latest month). When the forecast is replaced by actual data, this may lead to revisions to the published data.
The Index of Services was reclassified from experimental to a mainstream National Statistic in April 2007 following a robust evaluation programme. Currently 74 per cent of the components of the Index of Services are classified as mainstream National Statistics; 26 per cent remain experimental. Total services; Distribution; Transport, storage and communication; and Government and other services are classified as mainstream National Statistics. Business services and finance is still classified as experimental.
Further information on Experimental Monthly Index of Services can be found on the ONS website.
The table shows those industries classified as mainstream National Statistics and those that remain experimental:
|National Statistic||Weight in Index of Services|
|Hotels and restaurants||3.9|
|Supporting and auxiliary transport activities||2.3|
|Post and telecommunications||3.4|
|Other business activities||12.8|
|Letting of dwellings||9.0|
|Public administration and defence||6.9|
|Health and social work: public sector||6.1|
|Sewage and refuse disposal||0.9|
|Recreational, cultural and sporting activities: excluding radio and TV, and betting and gaming||2.3|
|Other service activities||0.8|
|Insurance and pension funding||1.9|
|Activities auxiliary to financial intermediation||1.5|
|Real estate activities||3.1|
|Renting of machinery and equipment||1.3|
|Computer and related activities||4.0|
|Research and development||0.6|
|Health and social work: private sector||3.4|
|Activities of membership organisations not elsewhere classified||0.8|
|Recreational, cultural and sporting activities:||1.3|
|radio and TV, and betting and gaming|
|Private households with employed persons||0.6|
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 effects of day of the week and Easter are used respectively to make trading day and Easter adjustments prior to seasonal adjustment.
It is common for the value of a group of financial transactions to be measured in several time periods. The values measured will include both the change in the volume sold and the effect of the change of prices over that year. Deflation is the process whereby the effect of price change is removed from a set of values to derive the volume. These volumes are described as ‘at constant prices’.
Within the Index of Services, all series, unless otherwise quoted, are measured at constant market prices. Deflators adjust the value series to take out the effect of price changes to give the volume series.
Basic quality information
All estimates, by definition, are subject to statistical ‘error’ but in this context the word refers to the uncertainty inherent in any process or calculation that uses sampling, estimation or modelling. Most revisions reflect either the adoption of new statistical techniques, or the incorporation of new information, which allows the statistical error of previous statements to be reduced. Only rarely are there avoidable ‘errors’ such as human or system failures, and such mistakes are made quite clear when they do occur.
Expectations of accuracy and reliability in early estimates are often too high. Revisions are an inevitable consequence of the trade off between timelines and accuracy. Early estimates are based on incomplete data.
Summary Quality Report
Summary Quality Report (127 Kb Pdf)
for this statistical bulletin can be found on the ONS website.
This report describes, in detail the intended uses of the statistics presented in this publication, their general quality and the methods used to produce them.
National Accounts revisions policy
National Accounts revisions policy (27.8 Kb Pdf)
can be found on the ONS website.
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 key indicators. The table which follows shows summary information on the size and direction of revisions which have been made to the data since January 2004.
The table below presents a summary of the differences between the first estimates published between June 2005 and May 2010 and the estimates published 12 months later.
|Value in latest period||Revisions between first publication and estimates twelve months later|
|Average over the last 60 months||Average over the last 60 months without regard to sign (average absolute revision)|
|Index of Services 3 month on 3 month growth rate||0.5||0.05||0.22|
|Index of Services 1 month on 1 month growth rate||-0.1||-0.03||0.23|
A statistical test has been applied to the average revision to find out if it is statistically significantly different from zero. The result of the test is that the average revision is not statistically significantly different from zero.
A spreadsheet giving a revisions triangle of estimates from June 2005 to May 2010 and the calculations behind the averages in the table is available in the Zip folder within the data section of this bulletin.
As noted, the table uses historical data from January 2003, comparing the estimates at first publication with the estimates as published 12 months later. The results of the revisions analysis over this period are fully expected. This is because the index of services development programme has reviewed 99 per cent of the service sector and implemented significant improvements to the methods and data sources used to measure the index of services. The implementation of these improved methods took place in six phases (in the April 2002, July 2003, April 2004, April 2005, April 2006, April 2007 and July 2008 releases). These improved methods led to a series of ‘one-off’ revisions that were larger than the routine revisions (for example later data, re-seasonal adjustment, actual data replacing forecasts etc.) that are made to the index of services. This means that the results of the revisions analysis in the table on the previous page may not be a good indicator of the future revisions performance of the index of services.
More information about the revisions material in this statistical bulletin can be found at ONS Policy on Standards for presenting revisions in time series First Releases (244.6 Kb Pdf) on the ONS website.
Details of the policy governing the release of new data are available from the press office. Also available is a list of those given pre-publication access (30.6 Kb Pdf) to the contents of this release.
A complete set of series in the statistical bulletin are available to download within the data section of this publication.
Alternatively, for low-cost tailored data, call Online Services on 0845 601 3034 or email firstname.lastname@example.org.
The complete run of data in the tables of this statistical bulletin is also available to from the data section of this publication.
ONS provides an analysis of past revisions in the IoS and other statistical bulletins (previously known as First Release) which present time series. Details can be found at ONS Policy on Standards for presenting revisions in time series First Releases (244.6 Kb Pdf) on the ONS website.
ONS now publishes
revisions triangles (65.8 Kb Pdf)
for all the main published key indicators on the ONS website.
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