GDP monthly estimate, UK: February 2020

Gross domestic product (GDP) measures the value of goods and services produced in the UK. It estimates the size of and growth in the economy.

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This is an accredited national statistic.

Contact:
Email James Scruton

Release date:
9 April 2020

Next release:
12 May 2020

1. UK GDP grew by 0.1% in the three months to February 2020

The most recent month featured in this release is February 2020, which was before the full direct effects of the coronavirus (COVID-19) pandemic took hold. However, there was some anecdotal evidence that there were some small positive and negative indirect effects in the data collected, although the number of negative impacts was greater.

Although gross domestic product (GDP) and its top-level components were largely unaffected, some small negative impacts could be seen in certain industries, such as travel agents and tour operators within services and manufacture of transport equipment within production. The small impacts that can be seen within the production data can also be seen to some degree in the UK trade data, also released today.

For more information on these impacts, please see the Index of Services, Index of Production and UK trade bulletins in the Related links section of this bulletin.

Statistician’s comment

Commenting on today’s GDP figures for the three months to February:

“Today’s figures show that in the three months to February, which was before the full effects of Coronavirus took hold, the economy continued to show little to no growth.

“Most elements of the services sector grew, though manufacturing continued to decline. Construction saw a notable fall in February, as wet weather and flooding hampered housebuilding.

“The underlying trade balance moved into surplus in the latest 3-months, the first seen since comparable records began over 20 years ago. This surplus was caused by a large fall in goods imported from EU countries.”

Rob Kent-Smith, Head of GDP, Office for National Statistics

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2. The services sector was the only positive contribution to GDP growth in the three months to February 2020

The services sector made the only positive contribution to gross domestic product (GDP) growth in the three months to February 2020, growing by 0.2%. Meanwhile, the production and construction sectors fell by 0.6% and 0.2%, respectively, in the same period. This is the 10th consecutive rolling three-month decline in the production sector.

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3. Rolling three-month growth was 0.1% in the three months to February 2020

Rolling three-month growth was 0.1% in February 2020, following two periods of flat output. This followed a period of volatility throughout 2019, in part linked to changes in the timing of activity around the two originally planned departure dates of the UK from the EU in March and October 2019.

Rolling three-month growth is based on output gross value added (GVA). There will therefore be discrepancies in the time series with our quarterly estimates of gross domestic product (GDP), which include information on the expenditure and income approaches to measuring GDP.

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4. GDP fell by 0.1% in the month of February 2020

Monthly gross domestic product (GDP) fell by 0.1% in February 2020. This contraction was caused by a large fall in the construction sector, despite a good performance from manufacturing for the second month in a row.

This release gives revisions to monthly GDP back to January 2019, bringing the months in line with the quarterly revisions that were released as part of the quarterly national accounts on 31 March 2020. Alongside the small revisions throughout 2019, January 2020 has also been open to revision for the first time, to take on new survey returns. It is worth noting that there have been large upward revisions to the production and construction data in January, resulting in an upward revision to GDP in the month of January of 0.1 percentage points.

The monthly growth rate for GDP is volatile. It should therefore be used with caution and alongside other measures, such as the three-month growth rate, when looking for an indicator of the longer-term trend of the economy. However, it is useful in highlighting one-off changes that can be masked by three-month growth rates.

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5. The services sector grew by 0.2% in the three months to February 2020

Rolling three-month services growth was 0.2% in February 2020, following zero growth in the three months to January 2020. Several sub-industries contributed to this growth, the largest of which was education. Public sector-dominated industries such as education have shown strong growth over the last year, performing better than private sector-dominated services as a whole.

In the month of February 2020, the services sector was flat, following growth of 0.1% in January 2020. Positive contributions from computer programming and accounting were offset by falls in both wholesale and warehousing.

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6. Production fell by 0.6% in the three months to February 2020

Rolling three-month output in the production sector fell by 0.6% in February 2020, with manufacturing falling by 0.4%. There were widespread falls across manufacturing industries. The most notable were within the manufacture of transport equipment, which fell by 1.9% mainly because of weaker exports to China impacted by the coronavirus (COVID-19); and machinery and equipment not elsewhere classified, which fell by 3.4%. Elsewhere, energy production along with mining and quarrying fell, while water supply increased.

Production grew by 0.1% in the month of February 2020, following growth of 0.2% in January 2020. Within production, manufacturing grew by 0.5%. The largest cause of this increase was the often-volatile pharmaceutical sub-industry, which increased by 3.5%.

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7. Growth in the construction sector fell by 0.2% in the three months to February 2020

Rolling three-month growth in the construction sector was negative 0.2% in February 2020, following downwardly revised growth of 1.0% in January 2020. This fall was caused by private housing repair and maintenance, which fell by 5.6%.

Month-on-month output in construction fell by 1.7% in February 2020, following a fall of 0.2% in January 2020. The largest contributor to this monthly fall was private new housing, which fell by 7.7%. The monthly fall in construction is likely to have been in part impacted by the adverse weather seen throughout February.

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8. Things you need to know about this release

Revisions

This release incorporates revisions back to 2019 as published in the March quarterly national accounts release for the period January 2019 to December 2019. January 2020 is also open to revision, taking on updated survey data.

Coronavirus (COVID-19)

In response to the developing coronavirus (COVID-19) pandemic, we are working to ensure that we continue to publish economic statistics. For more information, please see COVID-19 and the production of statistics. In line with the current government guidelines, we are encouraging Office for National Statistics (ONS) staff to work from home and to avoid unnecessary travel and social contact. We have an established infrastructure to help mitigate these changes to ensure we continue to produce economic statistics. We will continue to review our mitigation as events unfold.

Data in this statistical bulletin and accompanying datasets relate to February 2020 and are largely unaffected by recent developments. Our latest data and analysis on the impact of COVID-19 on the UK economy and population is now available on a new webpage. This will be the hub for all special virus-related publications, drawing on all available data.

To aid this interpretation, the ONS will publish an article (due for publication on 30 April) outlining the conceptual and practical challenges in producing gross domestic product (GDP) and its components.

Identifying recessions

Early estimates of GDP are subject to uncertainty, with more mature estimates leading to revisions as we receive more comprehensive data from a wide range of survey and administrative sources. On 16 April, we will be publishing an article in the Economic Review that will outline our latest thinking and analysis on how we communicate the uncertainty associated with changes in the economy. Typically, most interest in the uncertainty associated with estimating GDP comes around turning points in the economy. As such, this will be a central focus of the paper.

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9. Quality and methodology

Quality and methodology information on strengths, limitations, appropriate uses, and how the data were created is available in the Gross domestic product (GDP) QMI.

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Contact details for this Statistical bulletin

James Scruton
gdp@ons.gov.uk
Telephone: +44 (0)1633 455284