Services activities down by almost one fifth in April
Friday 12th June 2020
The services sector, which accounts for three-quarters of the UK economy, saw output drop by 19% in April 2020 following on from the 6.2% fall in March. As the covid-19 pandemic continues to place unprecedented restrictions on the movement and congregations of people, the services sector has been hit hard. Compared to the same month a year earlier, output was 23.2% lower in April.
Source: Office for National Statistics
Unsurprisingly distribution, hotels and restaurants - which relies heavily on footfall - suffered the largest fall in activity. In April this year, output in these services was almost half of what it was in the same month of the corresponding year (-46%). In contrast, business services and finance, where opportunities for home-working are greater, saw a severe but relatively smaller fall in output of 11.5% over the last year.
Source: Office for National Statistics
The relative contributions of the main services sectors to the 23.2% fall in output between April 2019 and April 2020 are concentrated in distribution, hotels and restaurants and government and other services. The 'other services' category includes a large array of personal services which have been subject to tight restrictions.
Source: Office for National Statistics
A gradual lifting of restrictions should allow many services businesses to at least partially reopen, but a recovery in activity is likely to be slow. Although month-on-month output falls are likely to be less severe, activity will continue to be severely depressed compared to a year ago.