GDP monthly estimate, UK: September 2023

• Monthly real gross domestic product (GDP) is estimated to have grown by 0.2% in September 2023, following growth of 0.1% in August 2023, revised down from growth of 0.2% in our previous publication.
• Looking at the broader picture, GDP showed no growth in the three months to September 2023.
• Services output rose by 0.2% in September 2023, driven by growth in professional, scientific and technical activities, and human health and social work activities, and was the main contributor to the growth in GDP; this follows growth of 0.3% in services output in August 2023, revised down from growth of 0.4% in our previous publication.
• Output in consumer facing services fell by 0.2% in September 2023 after a fall of 0.7% in August 2023, revised down from a fall of 0.6% in our previous publication.
• Production output showed no growth in September 2023 after falling by 0.5% in August 2023, revised up from a fall of 0.7% in our previous publication.
• The construction sector grew by 0.4% in September 2023 after a fall of 0.8% in August 2023, revised down from a fall of 0.5% in our previous publication.

Monthly real gross domestic product (GDP) is estimated to have grown by 0.2% in September 2023, following growth of 0.1% in August 2023, revised down from 0.2% in our previous publication. This release provides data for September 2023 for the first time, and July and August 2023 are open for revision. Revisions to July and August are detailed in Section 7: Revisions to GDP.

Output in the services sector rose by 0.2% in September 2023 and was the largest positive contributing sector to the growth in monthly GDP. Production output showed no growth and construction output grew by 0.4%.

Looking at the broader picture, GDP showed no growth in the three months to September 2023 when compared with the three months to June 2023, consistent with the output section in our GDP first quarterly estimate, UK: July to September 2023 bulletin. Services output fell by 0.1%, production output showed no growth, and construction grew by 0.1%.

Monthly GDP grew by 1.3% in September 2023 compared with the same month last year. For comparison, monthly GDP grew by 0.5% between August 2022 and August 2023. In September 2022 there was an additional bank holiday for the State Funeral of Her Majesty Queen Elizabeth II and many businesses closed or operated differently on this day. This should be considered when interpreting seasonally adjusted movements involving September 2022.

Services output grew by 0.2% in September 2023 following growth of 0.3% in August 2023, revised down from 0.4% in our previous publication. Figure 3 shows the monthly contributions from the services sector to gross domestic product (GDP) in September 2023.

The main drivers of growth in monthly services output were from the professional, scientific and technical activities, and human health and social work activities subsectors, which grew by 0.8% and 1.0%, respectively, in September 2023, following 0.8% and 0.7% growth in August 2023.

The 0.8% growth in professional, scientific and technical activities in September 2023 follows growth of 0.8% in August and 0.4% in July 2023. Looking at the three months to September 2023, compared with the three months to June 2023, professional, scientific and technical activities saw growth of 0.6%. Six of the eight industries in this subsector grew in September 2023, with the largest contributions coming from architectural and engineering activities, technical testing and analysis, and other professional, scientific and technical activities.

Human health and social work activities saw growth in all three industries, with human health activities being the largest contributing industry, growing by 1.1% in September boosted by the latest COVID-19 vaccination campaign. Industrial action continued in the human health industry in September 2023, with four days of industrial action taking place, compared with six days in August. There were three days of industrial action by junior doctors in September, compared with four in August, and two days of industrial action by senior doctors, the same amount as in August; one of these days was joint industrial action by junior and senior doctors.

Education grew by 0.6% in September, after growth of 2.0% in August 2023. The August growth follows a fall in July where there were two days of industrial action by teachers in England. Please note that education attendance is considered to be constant over the school year, so summer holidays do not reduce the estimate of education output in August 2023. Arts entertainment and recreation grew by 3.0% in September 2023 after a fall of 7.5% in August.

These increases were partially offset by falls in wholesale and retail trade; repair of motor vehicles and motorcycles. This subsector fell by 0.4% in September, following 0.6% growth in August 2023. This was driven by a 0.9% fall in retail trade, except of motor vehicles and motorcycles. For more information on this industry, see our Retail sales, Great Britain: September 2023 bulletin.

Real estate activities fell by 0.2% in September 2023, driven by falls of 4.4% in real estate activities on a fee or contract basis and 0.5% in buying and selling, renting and operating of own or leased real estate, excluding imputed rent.

Overall, the services sector fell by 0.1% in the three months to September 2023 compared with the three months to June 2023. The largest contributor to the fall in services over the three months was real estate activities which fell by 0.4%

Consumer-facing services

Output in consumer-facing services fell by 0.2% in September 2023, and remains 4.9% below pre-coronavirus (COVID-19) levels (February 2020), while all other services were 7.4% above (Figure 4). The largest negative contributions in September 2023 came from retail trade, excluding motor vehicles and motorcycles (down 0.9%), and travel agency, tour operator and other reservation activities (down 5.8%).

The largest positive contributions to consumer-facing services in September 2023 came from sports, amusement and recreation activities (up 3.3%) and accommodation services (up 2.3%).

Consumer-facing services were 4.9% below their pre-coronavirus levels (February 2020) in September 2023, with 11 of 13 industries lower than February 2020 (Figure 5). Within consumer-facing services, the largest contributor to this lower level in September 2023, compared with February 2020, was buying and selling, renting and operating of own or leased real estate, excluding imputed rent where output is 9.7% lower.

Figure 5: 11 of 13 consumer-facing service industries remain below their pre-coronavirus (COVID-19) levels (February 2020) in September 2023

Monthly consumer-facing services index, February 2020 to September 2023, UK

Notes:

1. Condensed industry titles are used for presentation purposes. For full titles, see our Consumer-facing services industry classification subsection in Section 10: Measuring the data.

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For more detailed breakdowns on services, see our Index of Services, UK: September 2023 bulletin.

Production output showed no growth in September 2023, following falls of 1.1% and 0.5% in July and August, respectively.

Mining and quarrying output fell by 2.2% in September 2023, after growth of 3.1% in August 2023. The fall in September was driven by a 2.5% decline in the extraction of crude petroleum and natural gas.

Electricity, gas, steam and air conditioning supply fell by 0.5% in September 2023, with declines in both electric power generation, transmission and distribution, and manufacture of gas.

Water supply, sewerage, waste management and remediation activities grew by 1.4%, driven by growths of 2.8% in sewerage activities and 2.0% in water collection, treatment and supply.

Manufacturing grew by 0.1% in September 2023 after a fall of 0.7% in August. In September 2023, 5 of the 13 manufacturing subsectors saw growth, with the largest positive contributions coming from manufacture of computer, electronic and optical products, and manufacture of machinery and equipment which grew by 2.8% and 2.7%, respectively. These growths were partially offset by falls in the other 8 manufacturing subsectors, with the largest negative contribution coming from manufacture of rubber, plastic and other non-metallic products, which fell by 2.5% (Figure 7).

Looking more broadly, production output also showed no growth in the three months to September 2023 compared with the three months to June 2023, with growths in mining and quarrying (0.6%), manufacturing (0.1%), and electricity, gas, steam and air conditioning supply (0.4%) offset by a fall of 0.8% in water supply, sewerage, waste management and remediation activities.

For more detailed breakdowns on production, see our Index of Production, UK: September 2023 bulletin.

Monthly construction output is estimated to have increased 0.4% in volume terms in September 2023; this came from an increase in repair and maintenance of 2.1%, whereas new work fell by 0.8%. This increase follows two consecutive falls in monthly construction output.

At the sector level, three out of the nine sectors saw a rise in September 2023, with the main contributor to the monthly increase seen in private housing repair and maintenance, which increased by 3.0% compared with August 2023.

Anecdotal evidence received from responses to our Monthly Business Survey for Construction and Allied Trades (MBS) suggested a positive effect of above-average temperatures increasing output. The Met Office confirmed that September 2023 was the joint hottest September on record for England and Wales in their Monthly climate summary (PDF 4.9MB).

Construction output rose by 0.1% in the three months to September 2023 compared with the three months to June 2023. Repair and maintenance increased by 0.7% over the period, while new work fell by 0.3%. Within repair and maintenance, the largest contributor to the increase came from non-housing repair and maintenance, which increased by 2.0%.

For further detail on construction output growth rates, along with new orders in the construction industry and construction output prices, see our Construction output in Great Britain: September 2023, new orders and Construction Output Price Indices, June to September 2023 bulletin.

There were some common themes that were anecdotally reported (as part of our Monthly Business Survey for Production and Services) to have played a part in performance across different industries. However, it is difficult to quantify the exact impact of each theme.

The industrial action in September 2023 had an impact on different industries to varying degrees. The health sector (junior doctors and senior doctors), higher education, rail network and some parts of the bus network all undertook industrial action for parts of September 2023. However, despite the industrial action, not all of these sectors saw a decline on the month.

Good weather had a positive impact on the month, with the joint-warmest September on record boosting output of dairy production, construction, hospitality, rental and leasing activities, and sports and amusement activities.

This release provides data for September 2023 for the first time. July and August 2023 are open for revision. Table 1 shows the revisions to monthly gross domestic product (GDP) and its sectors for July 2023 to August 2023 since the last monthly publication on 12 October 2023.

Our previous publication on 12 October 2023 included data consistent with the UK National Accounts, The Blue Book: 2023 which was published on 31 October 2023. Alongside this, we also published an additional article on GDP revisions in Blue book: 2023.

Further information on measuring the data across our main data sources is available in the following releases:

• Construction output in Great Britain: September 2023, new orders and Construction Output Price Indices, June to September 2023
• Index of Production, UK: September 2023
• Index of Services, UK: September 2023

In the UK, we produce estimates of monthly and quarterly gross domestic product (GDP). However, there are reasons why these would not provide the same estimate as to where the economy is relative to its pre-coronavirus (COVID-19) pandemic levels. This primarily reflects that monthly estimates of GDP are based on only the output measure of GDP, while quarterly estimates of GDP reflect the average of the three approaches (output, income and expenditure).

The coronavirus pandemic has brought many measurement challenges that have created more uncertainty around our three approaches. For more information on these challenges, see our Coronavirus and the effects on UK GDP article. This has led to an initial divergence between the output and average estimate, which is then reflected in how we compare monthly and quarterly estimates of GDP. For further information, see our Measuring monthly and quarterly UK gross domestic product during the coronavirus (COVID-19) pandemic article.

Estimates for the construction industry within monthly GDP will differ to those published in the construction output release because they account for both the outputs produced and inputs consumed by the industry. There are also some coverage differences given the use of the Annual Business Survey in their compilation.

Updates to monthly GDP methods and data sources in Blue Book 2023

A number of changes have been made to the methods and data sources used in compiling monthly GDP and output approach to measuring GDP estimates as part of Blue Book 2023.

Deflators

As announced in our Blue Book 2023 changes article, we have made a number of deflator improvements as part of Blue Book 2023. The following deflator improvements have been incorporated in our monthly GDP estimates. These will affect all industries that produce these products.

The weights used to combine the Producer Price Index and Export Price Index to create an overall output price have been improved for all of manufacturing.

The amount of Services Producer Price Indices (SPPI) has been increased, replacing lower quality deflators for the following products:

• CPA_J62: Computer programming, consultancy and related services
• CPA_J63: Information services
• CPA_M691: Legal activities
• CPA_M692: Accounting, bookkeeping and auditing services; tax consulting services 
• CPA_M70: Services of head offices; management consulting services 
• CPA_M71: Architectural and engineering services; technical testing and analysis services 
• CPA_M73: Advertising and market research services
• CPA_M74: Other professional, scientific and technical services
• CPA_N82: Office administrative, office support and other business support services

A new methodology to account for changes in the quality of computer hardware has been included within the deflator for product CPA_C26: Computer, electronic and optical products.

The deflator for product CPA_M72: Scientific research and development services has been updated to include a Consumer Price Index (CPI).

Implied deflators from household final consumption expenditure have been replaced with Consumer Price Indices (CPI).

Non-market and market sector breakdowns

We have expanded our non-market output industry coverage to be consistent with our approach to supply and use, bringing in data for the non-profit institutions serving households (NPISH) sector to go alongside general government data sources.

The annual Blue Book processing, where we align our monthly output estimates with the higher quality annual estimates of gross value added (GVA) from supply use, is now carried out separately for each sector, using estimates of market output for the market sector and non-market output for the non-market sector. These concepts are slightly different as the non-market sector can produce market output where an economically substantial fee is charged, which will be included in the GVA estimate, but the approach taken provides the best estimate in the short term.

Estimates of GVA in the most recent time periods (often referred to as “the tail”, which are time periods beyond where supply use estimates are available), are created separately for the market and non-market sectors by splicing the growth from our market and non-market output series onto the series that have been aligned to sectors GVA from supply use. This removes the need for fixed based weights for aggregating market and non-market data to estimate the total economy.

Market output continues to be measured in the same way, predominantly using the Monthly Business Survey (MBS). While the MBS will pick up some non-market output of the NPISH sector, this is a small component, and it remains the best estimate of market sector growth in our short-term estimates.

The Monthly GDP data sources catalogue provides a full breakdown of the data used in this publication.

Consumer-facing services industry classification

The industry breakdown used for consumer-facing services is based on the UK Standard Industrial Classification (SIC). In October 2023, the Office for National Statistics (ONS) launched a 12-week public consultation on the UK adoption of industrial classification of economic activity.

The following list contains the full SIC names of industries included in consumer-facing services and their corresponding shortened industry name where this has been used in Figure 5:

• Wholesale and retail trade; repair of motor vehicles and motorcycles – Sales and repairs of motor vehicles
• Retail trade, except of motor vehicles and motorcycles – Retail except motor vehicles
• Rail transport
• Accommodation
• Food and beverage service activities – Food and beverage
• Buying and selling, renting and operating of own or leased real estate, excluding imputed rent – Real estate activities
• Veterinary activities
• Travel agency, tour operator and other reservation service and related activities – Travel and tourism activities
• Gambling and betting services
• Sports activities and amusement and recreation activities – Sports, amusement and recreation
• Activities of membership organisations
• Other personal service activities
• Activities of households as employers of domestic personnel – Households as employers of domestic personnel

Additional bank holiday in May 2023 for the Coronation of King Charles III

There was an additional bank holiday for the coronation of King Charles III on Monday 8 May 2023. While adjustments are made for regular calendar effects, there was no explicit adjustment for this ad hoc event. However, the timing of the bank holiday indirectly affects the number of trading days, which could affect GDP estimates positively or negatively, depending on the sector.

Office for Statistics Regulation review of GDP

The Office for Statistics Regulation (OSR) will shortly be completing a review of the practices around the preparation and release of information about revisions to estimates of GDP in our Impact of Blue Book 2023 article released on 1 September 2023. This will cover:

• processes and quality assurance in making revisions to GDP
• potential improvements to early estimates of GDP enabled through enhanced access to data
• communication of revisions to GDP, the story behind the most recent set of revisions in particular, and uncertainty in early estimates of GDP

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

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

The latest comparisons of month on same month a year ago should be treated with caution given the impact of base effects on growth rates because of the economic impact of the coronavirus (COVID-19) pandemic throughout 2020 and 2021. Such comparisons and growth rates can be found in our accompanying dataset.