Weak services sector turnover in December raises the possibility of a cut in the current official estimate that GDP grew by 0.7% between the third and fourth quarters of 2013 – a revised number will be issued on 26 February.

The 0.7% estimate released last month – 0.70% before rounding – incorporated output changes in services, industry and construction of 0.8%, 0.7% and -0.3% respectively. The latter two have since been revised to 0.5% and 0.2%. These changes are offsetting, implying no change to the (unrounded) GDP growth estimate.

The quarterly services rise of 0.8% assumed growth of 0.4% between November and December. The Office for National Statistics collects separate data for retail, financial and government services and relies on the turnover survey for the rest of the sector. The retail input is based on sales volume, which rose by 2.5% between November and December, implying a +0.2 percentage point (pp) contribution to services output growth, allowing for the 7% weight of the industry in the sector. Finance and government – with a combined 37% weight – could plausibly add a further 0.1 pp.

The turnover survey, however, suggests that output of other services fell in December. The turnover series is in current price terms and is not adjusted for seasonal variation; the raw numbers were adjusted here using the standard X-11 procedure. The chart compares output excluding retail, financial and government services with seasonally-adjusted turnover. The relationship is imperfect but monthly changes in the two series have been in the same direction in three out of four months since the start of 2011.

Turnover fell in both November and December. Output rose in November; the odds are that it will not diverge from turnover for a second month.

The suggestion, therefore, is that retail strength in December will be offset by weakness in other services, resulting in total output undershooting the assumed 0.4% monthly rise incorporated in the current fourth-quarter GDP estimate. A revision down to 0.1% would be sufficient to reduce GDP growth to 0.6%, after rounding.

It should be emphasised that the revisions process is only beginning and a downgrade could be reversed as further information becomes available. Any services weakness in December, in addition, may be attributable to poor weather. A lowering of the fourth-quarter estimate, however, is not expected – some analysts think it will be raised – so could have a short-run negative impact on market interest rates and sterling.