This article looks at some of the main factors which are likely to have influenced the share of services in total UK economic activity and employment and examines recent trends in the United Kingdom's exports and imports of services and their contribution to the balance of payments.
Among the main points:
- Services have steadily increased their share of employment and GDP in current prices since the 1950s. The volume of services output, however, grew no faster than the rest of GDP up to the early 1970s, but its share in real output has risen since then.
- The surplus on UK trade in services increased from the early 1960s to the early 1980s. Financial and 'other' services made a significant contribution to this growth, as did the combined travel and civil aviation surplus, at least until 1977.
- Subsequently, the surplus declined, largely reflecting a deteriorating performance in travel and sea transport, and stiff remains below its 1981 peak. Net exports of financial and 'other' services, particularly banking, have, however, continued to grow strongly.