The latest November GDP data shows lacklustre 0.1% growth after quarter three figures showed no growth at all in a blow to business leaders
Manufacturing was down 0.3%, while the only growth area was services, up by 0.1% in November, reversing a 0.1% drop in October.
On a more positive note, the construction sector showed growth of 0.4% in November, bouncing back from the 0.3% drop in October, largely influenced by new work, and a 0.5% boost for repair and maintenance.
In the services sector, hospitality and IT, as well as the sale and repair of motor vehicles were the three best performing sub sectors, albeit showing only a measly 0.05% growth, while the financial sector showed no growth at all.
Year on year, the services sector was down 0.6%, dropping to £237bn, while the accounting sector itself was down 4.9% in November, falling to £3.97bn. However, this was still higher than the monthly average of £3.83bn over the year.
Julie Matheson, partner at Kingsley Napley said: ‘It seems the accounting industry didn’t quite match the sluggish growth of the wider UK economy in November and was one of the drags on the health of the overall services sector where hospitality, IT and construction performance held up in contrast.
‘The numbers will be a blow to accounting firm leaders after healthier growth in October but are consistent with the non-linear performance graph we have seen for much of 2024. The outlook should clearly be continued caution for business planning for 2025.’
Manufacturing output fell by 0.4% in November, bringing the total drop to 1% over two months, and 0.7% over the three-month period. This was largely due to the manufacturing and mining sub sectors but offset by a 0.2% rise in electricity and gas bills when the energy price cap rose.
Martin McTague, national chair of the Federation of Small Businesses said: ‘November’s nearly-flat growth in GDP offers little comfort to small firms, and it reflects the difficult trading conditions they have been consistently reporting.
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‘The government must now make good on its statements that growth is its number one priority. Its recent call for regulators to put forward suggestions for growth-friendly changes is something small businesses will welcome. Support for small firms must also be at the core of the three strategies which [the government] will unveil this spring: the industrial strategy, the small business strategy and the trade strategy.’
Responding to the latest GDP figures, the Chancellor reiterated yet again that the priority for the government was ‘change’.
‘I am determined to go further and faster to kickstart economic growth, which is the number one priority in our Plan for Change,’ Reeves said.
‘That means generating investment, driving reform and a relentless commitment to root out waste in public spending, and today I will be pressing regulators on what more they can do to deliver growth.’
