UK economic growth driven by services as construction and production fall

Services output grew by 0.9 per cent in the three months to August 2026 compared with the three months to May 2026, according to the Office for National Statistics — making services the main driver of UK economic growth over the period. Production output fell by 0.2 per cent over the same stretch, while construction contracted by 1.0 per cent.

Ten of 14 services industries recorded growth. The largest positive contributions came from professional, scientific and technical activities; information and communication; and administrative and support service activities. Yet despite the three-month gain, services output was flat in August 2026 as a single month.

Construction’s 1.0 per cent decline was its second consecutive three-month fall. Private new housing was the main drag, dropping 3.2 per cent over the period — a sharper contraction than the sector average. Monthly construction output fell 0.2 per cent in August 2026 alone, with new work down 0.7 per cent, though repair and maintenance edged up 0.4 per cent.

The split matters. Services account for the largest share of the three main sectors tracked in ONS output statistics, so their 0.9 per cent gain was enough to pull overall growth positive even as goods-producing and construction businesses saw output shrink.

The figures are provisional national estimates and may be revised as further data comes in. Liz McKeown, ONS Director of Economic Statistics, described growth as led by services while production and construction fell — an assessment consistent with the CBI’s own reading of the data.