Stagnant Q4 for Professional and Business services output, ONS data reveals
The latest Index of Services figures released by the ONS show services output had its second consecutive three-month period of no growth, despite eight of the 14 subsectors achieving positive contributions. Overall, GDP grew 0.1% for the three months to December 2025, in line with expectations. However, this has been driven by production rather than services output.
Based on the three-month period, professional, scientific and technical (PST) activities were the largest negative contributor, with a 1.1% decrease. This was mostly driven by a fall in accounting, bookkeeping and auditing activities; tax consultancy of 5.1% and advertising and market research decreasing by 4.1%.
The monthly story for December alone is more positive, with PST activities showing no growth, rather than a decrease, following a 0.7% increase in November. Although overall PST output remained stagnant, advertising and market research saw growth of 5.5%, following falls in the previous eight months, marking the largest single-industry positive contribution.
Commenting on the latest figures, Chloe Austin, director and senior analyst in professional and business services at RSM UK, said:
“The output results for Q4 reflect a challenging operating environment, with uncertainty relating to the Autumn Budget driving some reduced demand. Had there been an increase in output for the quarter, or standalone month, it would imply that demand had rebounded as businesses gained clarity on the fiscal environment and resumed investment and strategic planning activities that were previously deferred. The stagnation for December alone implies that this may not be the case, with businesses remaining cautious.
The separate revenue data shows a 5% increase across PST for December alone and the inability for this to translate into output growth indicates that focus needs to remain on cutting costs and improving margins. This will no doubt be a key factor in the ongoing forecast and budgeting process for firms.
“Looking at the whole of 2025, GDP grew by 1.3%, with services being a key driver to growth and PST being a consistent contributor to this. However, the annual contribution for PST has decreased from 0.23 percentage points in 2024 to 0.11 in 2025, indicating a slowdown in growth compared to the wider economy.
“Although today’s figures aren’t overwhelmingly positive for the professional and business services industry, there is still potential for a recovery throughout 2026. There needs to be a focus on strategic investment to improve future efficiencies whilst maintaining the bottom line.”