Sales in services rose by 2.5% y/y in Q3, slowing down from upwards revised 3.7% y/y increase in Q2, according to the constant price data released by the stats office on Wednesday. The slower growth reported in Q3 was on account of all subcomponents safe for transport and storage, the growth of which speeded up to 2.7% y/y in the quarter. Thus, the sector had the strongest, 0.9pps contribution to the overall services expansion in Q3. All other components reported slower pace of expansion in Q3 – ICT and administrative services had the second highest contribution to services growth in Q3 of 0.6pps each, while the previous driver of services expansion, accommodation and food service activities, had only 0.4pps positive contribution, statisticians said.
Overall, data suggest somewhat lower contribution of services to GDP growth in Q3. Note that the pace of expansion of construction seems to have slowed down markedly in Q3, retail sales and exports also seem to have expanded at somewhat slower pace, while the industrial production growth slightly accelerated. This might be indicative of Q3 GDP growth remaining at about its Q2 pace (4.7% y/y) or accelerating only slightly. The CNB expects GDP growth acceleration to 5.0% y/y in Q3. The stat office will announce first GDP estimate for Q3 next week, on Nov 14, while detailed data are due on Dec 1.