Sources of Structural Change for the UK Service Industries 1979–84

Over the period 1979 to 1984 the UK economy experienced severe structural change in that the oil and services sectors increased their share of employment and output, whilst the share of manufacturing fell by about 5 percentage points. This paper uses input–output tables for 1979 and 1984 to decompose the changes in output of total marketed services and the component industries into the changes due to price changes and those due to volume changes. The volume changes are, in turn, decomposed into those internal to the service industries, e.g. changes in demand for business services by communication, and those external to the industries, e.g. changes in demand for services by manufacturing. The analysis is done at a 101-industry level with results presented in the paper for the five service industries, Distribution and Catering, Transport, Communications, Business Services and Other Market Services. The paper is intended to give insight into the answers to the following questions: How much of the increase in service output has been due to the reallocation of activities previously done within manufacturing? In what respects were services insulated from the effects of the general recession 1979-812? Has the recent growth in services output been due to more consumers' expenditure and other. final demand or to other factors? The main conclusion is that changes in Input–Output coefficients were very important for structure change in UK services, almost entirely because they dominated the fastest-growing sector, business services.