Monthly gross domestic product (GDP) grew by 1.1% in September 2020 as lockdown measures continued to ease. This is the fifth consecutive monthly increase following a record fall of 19.5% in April 2020.
September 2020 GDP is now 22.9% higher than its April 2020 low. However, it remains 8.2% below the levels seen in February 2020, before the full impact of the coronavirus (COVID-19) pandemic. There has also been a loss in momentum through Quarter 3 (July to Sept) 2020.Back to table of contents
Gross domestic product (GDP) grew by 15.5% in Quarter 3 (July to Sept) 2020 as restrictions on movement eased across June, July, August and September.
Quarterly growth captures the average level of output in July to September relative to the average in April to June. For more details on quarterly GDP, please see GDP first quarterly estimate, UK: July to September 2020 published today (12 November 2020).
The services sector grew by 1.0%, production by 0.5% and construction by 2.9% in September 2020, however, it is important to note that since the peak monthly growth in June, growth in GDP and its main sectors has slowed.
Looking ahead, results from Wave 16 of the Business Impact of Coronavirus (COVID-19) Survey (BICS), which covered the dates 5 to 18 October 2020, found that of businesses currently trading, 45% reported their turnover had decreased below what is normally expected for October, compared with 48% reporting decreases in September in Wave 15.
In October, there were three industries where more than 50% of businesses experienced a decrease in turnover, compared with 45% across all industries. These were the accommodation and food service activities industry, at 72%; the arts, entertainment and recreation industry, at 69%; and the education industry (private sector and higher education businesses only), at 57%.Back to table of contents
This release captures the direct effects of the coronavirus (COVID-19) pandemic and the government measures taken to reduce transmission of the virus. We have faced an increased number of challenges in producing monthly and quarterly estimates of UK gross domestic product (GDP). More detailed information on the challenges and the steps taken to mitigate those can be found in Coronavirus and the effects on UK GDP.
As a result of these challenges, GDP estimates for September 2020 are subject to more uncertainty than usual.
It is important to note that, while in the short run we have faced challenges to collect the information required to produce the Monthly Business Survey (MBS), response rates have improved since the first published estimate, as shown in Table 2.
|March MBS response rates|
|First March estimate||Current estimate|
|Index of Services||79.0%||94.1%|
|Index of Production||71.7%||94.7%|
|April MBS response rates|
|First April estimate||Current estimate|
|Index of Services||84.4%||93.1%|
|Index of Production||79.8%||94.3%|
|May MBS response rates|
|First May estimate||Current Estimate|
|Index of Services||86.4%||92.5%|
|Index of Production||88.4%||93.6%|
|June MBS response rates|
|First June estimate||Current Estimate|
|Index of Services||75.2%||88.1%|
|Index of Production||75.3%||88.5%|
|July MBS response rates|
|First July estimate||Current Estimate|
|Index of Services||77.9%||93.5%|
|Index of Production||81.0%||92.7%|
|August MBS response rates|
|First August estimate||Current estimate|
|Index of Services||82.7%||92.1%|
|Index of Production||84.9%||89.5%|
|September MBS response rates|
|First September estimate|
|Index of Services||79.8%|
|Index of Production||84.0%|
Download this table Table 2: Breakdown of components response rates for Monthly Business Survey (MBS).xls .csv
Table shows MBS turnover response rates.
Construction response rates for March are lower than usual as the MBS survey was collected by paper before moving online in April. For more information, please refer to the Construction release.
Eat Out to Help Out
The UK National Accounts treat the government’s Eat Out To Help Out (EOTHO) scheme as a subsidy on products paid by central government to businesses in the private non-financial corporations (PNFCs) sector.
To ensure GDP impacts in line with this treatment, respondents to the Monthly Business Survey have been asked to return turnover excluding any reimbursement from government under the scheme. These returns have been deflated using the Consumer Price Indices within the food and drink categories, which themselves have been adjusted to reflect the reduced prices paid by consumers as a result of the scheme. This results in a headline volume series, which will reflect higher output related to any increase in the volume of meals consumed under the scheme.
This release is based only on the output approach to GDP. Additional steps have been taken for GDP compiled on a quarterly basis to ensure flows are routed as subsidies across all transactions in the three approaches to GDP. Aside from any usual data revisions, this should not affect the headline estimates of GDP published in this release.
Communicating gross domestic product
Recent analysis explains our latest position on how we are looking to communicate GDP, including how we will continue to acknowledge that “technical” recessions are comprised of at least two consecutive quarters of contracting GDP.
While it is still true that these early estimates are prone to revision, we prefer to focus on the magnitude of the contraction that has taken place following the coronavirus pandemic. It is clear that the contraction in GDP in Quarter 2 (Apr to June) was in the largest recession on record. Our latest estimates show that the UK economy is now 8.2% smaller than it was in February, the effects of which have been most pronounced in those industries that are most exposed to public health restrictions and the effects of social distancing.Back to table of contents
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