Real estate leading the UK service sectors keeping their head above water during pandemic decline
The latest index of services from the Office for National Statistics makes for stark reading, with nine of the UK’s 15 service sectors recording the weakest month for growth on record in March and a further five seeing a decline in growth.
However, research by Sourced Capital has found that while the service sector has been hit hard by COVID-19 and the ensuing lockdown, some sectors are still keeping their head above water.
Sourced Capital looked at the average monthly growth since COVID-19 started to take hold in December and found on average, the service sector has seen a decline -1.48% on average each month. Sourced Capital also looked at the total point to point change from November prior to the outbreak and now (March 2020) and found there has been a -5.8% decline overall.
However, there are three UK service sectors that have managed to weather the storm and record positive average monthly growth, two of which have also seen positive total growth.
While there has been much talk of a property market decline, the Real Estate Activities sector has seen an average monthly growth rate of 0.15%. When comparing total growth in November to the latest month of March, there has however been a marginal total decline of -0.1%.
Other sectors to weather the storm so far include Financial and Insurance Activities and Public Administration and Defence; Compulsory Social Security, with average monthly increases of 0.03% and a total point to point increase of 0.5% and 0.1% respectively.
However, not every service sector has fared as well. Sourced Capital’s research shows that the Accommodation and Food Service Activities sector has seen the largest average monthly decline of all sectors; down -7.58% per month. The sector has also seen the largest point to point decline with a total drop of -32.1%.
Other sectors to have been hit the hardest include Other Service Activities, Transport and Storage, Education and Arts Entertainment and Recreation.
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Services sector industries ranked by highest to lowest average monthly growth during the COVID-19 crisis
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Sector
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Average monthly change (%)
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Point to point total change (%)
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Real estate activities
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0.15
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-0.1
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Public administration and defence; compulsory social security
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0.03
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0.1
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Financial and insurance activities
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0.03
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0.5
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Professional, scientific and technical activities
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-0.10
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-0.6
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Information and communication
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-0.70
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-0.5
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Human health and social work activities
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-0.80
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-3.2
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Activities of households as employers
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-0.95
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-2.7
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Wholesale and retail trade; repair of motor vehicles and motorcycles
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-2.30
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-8.3
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Administrative and support services activities
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-2.63
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-10.8
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Arts, entertainment and recreation
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-3.13
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-15
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Education
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-3.43
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-14.9
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Transportation and storage
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-3.48
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-12.1
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Other service activities
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-4.20
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-18.1
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Accommodation and food service activities
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-7.58
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-32.1
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Services overall
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-1.48
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-5.8
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Average monthly change relates to the period of December 2019 to March 2020 to show impact of COVID-19 on each service sector
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Point to point change relates to the total change between November 2019 prior to the virus and March 2020 to show impact before and currently.
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