A stronger performance from services

From the national accounts for Q2 2018 we highlight the five best performing sectors. We cover only those sectors accounting for at least 1% of GDP at constant basic prices, and exclude other services. We have reverted to measuring performance y/y since the data are not seasonally adjusted. There has been a marked change in the composition of GDP growth (1.5% y/y in Q2). Services grew by 2.1% y/y, its strongest showing since 2016, while agriculture and industry, dragged down by crude petroleum and natural gas, posted rates of 1.2% and 0.4% respectively.


  • Transportation and storage put in a third successive strong performance, which started with 16.6% y/y in Q4 2017. The driver was road transport, comfortably its largest segment, which expanded by 23.4% y/y in Q2. Credit is surely due in large part to capital spending by government.


  • Information and communications was the second best performer. Active mobile lines and internet subscriptions dipped in the year-earlier period.  The broadcasting segment had a particularly strong quarter (21.9% y/y).


  • Construction did well, unlike real estate (-3.9% y/y). Government spending  may again have played a significant part. We note in this context that cement was among the strongest manufacturing segments in Q2.


  • The fourth and fifth performers were in the services sector. Non-oil growth therefore recovered to 2.1% y/y in Q2, its highest since Q4 2015. Government expenditure, and services for the middle and top end of the market appear to have been the drivers. The exception was information and comms: spending on mobiles has become a core element in the household budget.
Five best performing sectors (% chg; y/y)


Sources: National Bureau of Statistics (NBS); FBNQuest Capital Research
  •    The lower end of the market continued to struggle, evident from the latest contraction of trade (-2.1% y/y).

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