UK GDP in volume terms was estimated to have increased by 0.3% between Quarter 4 (Oct to Dec) 2014 and Quarter 1 (Jan to Mar) 2015, unrevised from the previous estimate of GDP published 28 April 2015
GDP was estimated to have increased by 2.8% in 2014, compared with 2013, unrevised from the previously published estimate
Between Quarter 1 2014 and Quarter 1 2015, GDP in volume terms increased by 2.4%, unrevised from the previously published estimate
GDP in current prices was estimated to have increased by 0.9% between Quarter 4 2014 and Quarter 1 2015
GDP per head was estimated to have increased by 0.1% between Quarter 4 2014 and Quarter 1 2015. Between 2013 and 2014, GDP per head increased by 2.2%
Change in GDP is the main indicator of economic growth. There are three approaches used to measure GDP.
Gross value added (GVA) is the sum of goods and services produced within the economy less the value of goods and services used up in the production process (intermediate consumption). The output approach measures GVA at a detailed industry level before aggregating to produce an estimate for the whole economy. GDP (as measured by the output approach) can then be calculated by adding taxes and subtracting subsidies (both only available at whole economy level) to this estimate of total GVA (more information on creating the preliminary estimate of GDP is available on the Methods and sources page of our website).
The income approach measures income generated by production in the form of gross operating surplus (profits), compensation of employees (income from employment) and mixed income (self-employment income) for the whole economy.
The expenditure approach is the sum of all final expenditures within the economy, that is, all expenditure on goods and services that are not used up or transformed in the process i.e. final consumption (not intermediate) for the whole economy.
The second estimate of GDP is based on revised output data, together with data from some expenditure and income components. The output GVA and GDP estimates are balanced with the equivalent income and expenditure approaches to produce headline estimates of GVA and GDP. Further information on all three approaches to measuring GDP can be found in the Short Guide to National Accounts (105.5 Kb Pdf).
All data in this bulletin are seasonally adjusted estimates and have had the effect of price changes removed (in other words, the data are deflated), with the exception of income data which are only available in current prices.
Growth for GDP and its components is given between different periods. Latest year-on-previous-year gives the annual growth between one calendar year and the previous. Latest quarter-on-previous-quarter growth gives growth between one quarter and the quarter immediately before it. Latest quarter-on-corresponding-quarter-of-previous-year shows the growth between one quarter and the same quarter a year ago.
In line with national accounts revisions policy, the only period open for revision in this release is Quarter 1 2015.
About the second estimate of GDP
The second estimate of GDP is produced around seven and a half weeks after the end of the quarter to provide a timely estimate of GDP. At this stage the data content of this estimate from the output measure of GDP has risen to around 80% of the total required for the final output based estimate. There is also around 50-60% data content available to produce estimates of GDP from the expenditure and income approaches.
The quality of the GDP estimate
Revisions are an inevitable consequence of the trade-off between timeliness and accuracy. The estimate is subject to revisions as more data become available, but between the preliminary and third estimates of GDP, revisions are typically small (around 0.1 to 0.2 percentage points), with the frequency of upward and downward revisions broadly equal.
All estimates, by definition, are subject to statistical uncertainty and for many well-established statistics we measure and publish the sampling error associated with the estimate, using this as an indicator of accuracy. The estimate of GDP, however, is currently constructed from a wide variety of data sources, some of which are not based on random samples and as such it is very difficult to measure the sampling error. While development work continues in this area, like all other G7 national statistical institutes, we do not publish a measure of the sampling error associated with GDP.Back to table of contents
Table 1: Key data for the UK, Q1 (Jan to Mar) 2015
|Current market prices||Chained volume measures|
|Gross domestic product||Compensation of employees||Gross domestic product||Household expenditure||Gross fixed capital formation|
|Source: Office for National Statistics|
|1. Percentage change on previous quarter|
|2. Q1 refers (Jan to Mar)|
|Q2 refers (Apr to Jun)|
|Q3 refers (Jul to Sept)|
|Q4 refers to (Oct to Dec)|
Download this table Table 1: Key data for the UK, Q1 (Jan to Mar) 2015.xls (27.6 kB)
Figure 1: Quarterly growth and levels of GDP, table A2
Source: Office for National Statistics
- Q1 is Quarter 1 (Jan to Mar)
- Q2 is Quarter 2 (Apr to June)
- Q3 is Quarter 3 (July to Sept)
- Q4 is Quarter 4 (Oct to Dec)
As seen in Figure 1, GDP in the UK grew steadily during the 2000s until a financial market shock affected UK and global economic growth in 2008 and 2009. Economic growth resumed towards the end of 2009, but usually at a slower rate than the period prior to 2008. From the peak in Quarter 1 (Jan to Mar) 2008 to the trough in Quarter 2 (Apr to June) and Quarter 3 (July to Sept) 2009, GDP decreased by 6.0%. This can be compared to previous economic downturns in the early 1980s and early 1990s, which saw lower levels of impact on GDP. In the early 1990s downturn, GDP decreased by 2.2% from the peak in Quarter 2 1990 to the trough in Quarter 3 1991. In the early 1980s downturn, GDP decreased by 5.6% from the peak in Quarter 2 1979 to the trough in Quarter 1 1981.
From Quarter 3 (July to Sept) 2009 growth continued to be erratic, with several quarters between 2010 and 2012 recording broadly flat or declining GDP. This two-year period coincided with special events (for example severe winter weather in Quarter 4 (Oct to Dec) 2010 and the Diamond Jubilee in Quarter 2 2012) that are likely to have affected growth both adversely and positively. Since 2013, GDP has grown steadily, with the economy exceeding pre-downturn peak levels in Quarter 3 2013.
Quarter 1 2015 has shown continued strength with GDP growing by 0.3% compared with the previous quarter; by 2.4% between Quarter 1 2014 and Quarter 1 2015, and by 2.8% between 2013 and 2014. GDP has now increased for nine consecutive quarters, breaking a pattern of slow and erratic growth from 2009.Back to table of contents
Annex A (36.5 Kb Excel sheet) contains output component growth rates back to Quarter 1 (Jan to Mar) 2014.
The output components of GDP showed increases in Quarter 1 (Jan to Mar) 2015 for production and services. There were decreases for agriculture, forestry and fishing and construction.
Production output increased by 0.1% in Quarter 1 2015 compared with Quarter 4 (Oct to Dec) 2014, revised up 0.2 percentage points from the previously published estimate. Within the production sub-industries, output from mining and quarrying, including oil and gas extraction, fell by 0.7%; manufacturing (the largest component of production) increased by 0.1% (Figure 2), while electricity, gas, steam and air conditioning supply industries rose by 2.7%. Water supply and sewerage fell by 0.8%.
When comparing Quarter 1 2015 with Quarter 1 2014, production output rose by 0.6%. Manufacturing increased by 1.3% between these periods while electricity, gas, steam and air conditioning supply industries increased by 3.5%. Mining and quarrying, including oil and gas extraction, fell by 1.8% while water supply and sewerage contracted by 3.1%.
Construction output decreased by 1.1% in Quarter 1 2015, revised up 0.5 percentage points from the previously published estimate. Construction output fell by 0.3% between Quarter 1 2014 and Quarter 1 2015.
The service industries grew by 0.4% in Quarter 1 2015 (Figure 3), revised down 0.1 percentage points from the previous estimate, marking the ninth consecutive quarter of positive growth. This follows a 0.9% increase in Quarter 4 2014.
Output of the distribution, hotels and restaurants industries rose by 1.2% in Quarter 1 2015, following a 1.4% increase in Quarter 4 2014. The increase in the latest quarter was largely due to retail trade, except of motor vehicles and motorcycles.
Output of the transport, storage and communication industries rose by 0.8% in Quarter 1 2015, following a 0.9% increase in Quarter 4 2014. The largest contributor to the increase was motion picture, video and TV programme production, sound recording and music publishing activities. Business services and finance industries’ output rose by 0.1% in Quarter 1 2015, following a 1.3% increase in Quarter 4 2014. The largest upward contribution to growth in Quarter 1 2015 came from rental and leasing activities.
Output of government and other services rose by 0.3% in Quarter 1 2015 and was flat in Quarter 4 2014. In the latest quarter the largest upward contribution came from human health activities.
Further detail on the service industries’ lower level components can be found in the Index of Services statistical bulletin published on the same day as this release.
Gross value added (GVA) excluding oil and gas extraction rose by 0.3% in Quarter 1 2015 following a 0.6% increase in Quarter 4 2014.
Figure 4 shows the path of GDP and its headline industries (this excludes agriculture, and includes manufacturing which is a sub-component of production) relative to their level of output achieved in Quarter 1 (Jan to Mar) 2008. In the decade prior to the downturn, the services industry is shown to have grown steadily, while production output was broadly flat over the same period. Construction activity grew strongly in the early part of the decade, and although there was a temporary decline in the mid-2000s; this was reversed by the end of 2007.
Industries have shown differing trends following the recent economic downturn. The construction, manufacturing and production industries were more acutely affected by the deterioration in economic conditions, with output falling from peak to trough by 17.1%, 12.2% and 10.7% respectively. In contrast, output in the services industry only fell by 4.0% from its peak to trough.
Production activity began to grow again in 2010, and the manufacturing and the construction industries showed particular strength – neither industry sustained this growth. Production output fell in both 2011 and 2012, falling below levels seen at the height of the downturn in 2009. Construction output also fell sharply in 2012, with output falling close to its 2009 trough after further contraction in Quarter 1 2013. Construction output improved over much of 2014. However, output declined in the most recent quarter. Although, there has been widespread growth across all major components of GDP since the start of 2013, the service industry remains the largest and steadiest contributor to overall economic growth, and is the only headline industry in which output has exceeded pre-downturn levels.
Figure 5 shows the average compound quarterly growth rate experienced over the five years prior to the economic downturn in 2008 to 2009, the average growth rate experienced between Quarter 3 2009 and Quarter 2 (Apr to June) 2014 (five years following the downturn), and the current quarterly growth rate observed in the most recent period (Quarter 1 2015). Compound average growth is the rate at which a series would have increased or decreased if it had grown or fallen at a steady rate over a number of periods. This allows the composition of growth in the recent economic recovery to be compared to the long run average.
The UK experienced slightly slower average compound GDP growth in the five years following the economic downturn compared with the five years prior: this is also true of the services industry. Figure 5 shows that in Quarter 1 2015, all industries shown underperformed compared to the post-downturn average rate of growth, with the exception of production which performed at the same rate. The electricity, gas and steam industries have shown particular strength when compared to both the production 5 year average, prior and post the downturn.
It should be noted that the third column, which shows the current quarterly growth rate, is based on only one data point. Consequently users should use caution when making direct comparisons with the long run averages.
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Annex B (33 Kb Excel sheet) contains expenditure component growth rates back to Quarter 1 (Jan to Mar) 2014.
Gross domestic expenditure (the sum of all expenditure by UK residents on goods and services which is not used up or transformed in a productive process) rose by 1.2% in Quarter 1 (Jan to Mar) 2015, following a 0.3% fall in Quarter 4 (Oct to Dec) 2014. Annually, between 2013 and 2014 gross domestic expenditure increased by 3.3%.
Household final consumption expenditure rose by 0.5% in Quarter 1 2015 and has increased for fifteen consecutive quarters (Figure 6). When compared with the same quarter a year ago, household final consumption expenditure has been rising each quarter since Quarter 4 2011, and was 2.6% higher in Quarter 1 2015 than in the same period a year ago. Between 2013 and 2014, household final consumption expenditure increased by 2.5%.
Government final consumption expenditure rose by 0.6% in Quarter 1 2015, following a 0.2% fall in Quarter 4 2014. Between Quarter 1 2014 and Quarter 1 2015, government final consumption expenditure increased by 2.5%. Between 2013 and 2014, government final consumption expenditure increased by 1.7%.
Non-profit institutions serving households’ (NPISH) final consumption expenditure rose by 2.6% in Quarter 1 2015, following a 3.2% fall in Quarter 4 2014. Between Quarter 1 2014 and Quarter 1 2015, NPISH final consumption expenditure increased by 2.3%. Annually, NPISH final consumption expenditure rose by 0.9% between 2013 and 2014.
In Quarter 1 2015, gross fixed capital formation was estimated to have increased by 1.5% (see Figure 7). Between Quarter 1 2014 and Quarter 1 2015, gross fixed capital formation increased by 3.4%. Gross fixed capital formation rose by 7.8% between 2013 and 2014.
As of Quarter 1 2015, ONS has migrated to the Quarterly Acquisitions and Disposals of Capital Assets Survey (QCAS) from the Quarterly Survey of Capital Expenditure (CAPEX) as one of the main data sources for gross fixed capital formation. The main reasons for the changes to the survey are to move to the updated European System of Accounts (ESA) 2010 manual, the international guidance for national accounts. More information on this change and more detail on gross fixed capital formation can be found in the Business Investment statistical bulletin published on the same day as this release.
Business investment was estimated to have risen by 1.7% in Quarter 1 2015. Between Quarter 1 2014 and Quarter 1 2015, business investment increased by 3.7%. Annually, business investment rose by 7.5% between 2013 and 2014.
Including the alignment adjustment, the level of inventories increased by £4.0 billion in Quarter 1 2015, following an increase of £1.7 billion in Quarter 4 2014.
The trade balance deficit widened from £9.6 billion in Quarter 4 2014 to £13.2 billion in Quarter 1 2015 (Figure 8). The trade position reflects exports minus imports. Following a 4.6% increase in Quarter 4 2014, exports fell by 0.3% in the latest quarter, while imports increased by 2.3% following a 1.6% increase in Quarter 4 2014. Between 2013 and 2014, exports increased by 0.6% while imports increased by 2.2%.
Figure 9 shows the quarterly contribution of the expenditure components to the growth of GDP in chained volume measures. For Quarter 1 2015, changes in inventories, excluding the alignment adjustment, made the largest positive contribution to GDP at 0.5 percentage points followed by household final consumption expenditure and gross fixed capital formation which each contributed 0.3 percentage points to GDP, and finally general government final consumption expenditure and NPISH which each contributed 0.1 percentage points. Net trade made a negative contribution to GDP of 0.9 percentage points.
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Annex D (29 Kb Excel sheet) contains implied deflator component growth rates back to Quarter 1 (Jan to Mar) 2014.
The GDP implied deflator at market prices for Quarter 1 (Jan to Mar) 2015 is 1.8% above the same quarter of 2014 (Figure 10). The GDP implied deflator is calculated by dividing current price (nominal) GDP by chained volume (real) GDP and multiplying by 100 to convert to an index. It is not used in the calculation of GDP; the deflators for expenditure components, which are the basis for the implied GDP deflator, are used to calculate nominal GDP not real GDP.
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Annex C (30 Kb Excel sheet) contains income component growth rates back to Quarter 1 (Jan to Mar) 2014.
GDP at current market prices rose by 0.9% in Quarter 1 (Jan to Mar) 2015, following a 0.7% increase in Quarter 4 (Oct to Dec) 2014. GDP at current market prices rose by 4.3% when compared to Quarter 1 2014. In 2014, GDP at current market prices rose by 4.6%.
Compensation of employees – which includes both wages and salaries, and pension contributions – decreased by 0.2% in Quarter 1 2015, following an increase of 1.1% in Quarter 4 2014 (Figure 11). Between Quarter 1 2014 and Quarter 1 2015, compensation of employees rose by 4.2%. Between 2013 and 2014, compensation of employees rose by 3.2%.
The gross operating surplus of corporations (effectively the profits of companies operating within the UK), including the alignment adjustment, rose by 4.0% in Quarter 1 2015 compared with the previous quarter; this follows a decrease of 1.8% in Quarter 4 2014 (Figure 12). Between 2013 and 2014 the gross operating surplus of corporations rose by 4.6%.
Taxes less subsidies on products and production fell by 2.0% in Quarter 1 2015, following an increase of 3.1% in Quarter 4 2014. Between 2013 and 2014 taxes less subsidies on products and production rose by 4.6%.
Figure 13 shows the contribution made by income components to current price GDP. In Quarter 1 2015, there were positive contributions to GDP from gross operating surplus of corporations and other income which respectively contributed 0.9 and 0.4 percentage points. Compensation of employees contributed a negative 0.1 percentage points to GDP while taxes less subsidies contributed a negative 0.2 percentage points.
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In Quarter 1 2015 (Jan to Mar) UK Gross Domestic Product (GDP) per head increased by 0.1% compared with Quarter 4 2014 (Oct to Dec). This was lower than the 0.3% increase in GDP in Quarter 1 2015. In Quarter 1 2015 GDP per head remained 1.0% below its pre-economic downturn peak level (Quarter 1 2008) while GDP exceeded the level of its pre-downturn peak in Quarter 3 (July to Sept) 2013, and in Quarter 1 2015 was 4.0% above its pre-downturn peak (Figure 14).
Between Quarter 1 2014 and Quarter 1 2015, GDP per head rose by 1.7%. Between 2013 and 2014, GDP per head rose by 2.2%.
GDP per head is calculated by dividing GDP in chained volume measures by the latest population estimates and projections.
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The estimates quoted in this international comparison section are the latest available estimates published by the respective bodies (referenced) at the time of preparation of this statistical bulletin and may subsequently have been revised.
All areas included within our international comparison saw positive growth when comparing Quarter 4 (Oct to Dec) 2014 and Quarter 1 (Jan to Mar) 2015 (Figure 15). The European Union (EU28) grew by 0.4% in the first quarter of 2015 following seven quarters of positive growth (Table 2). In the same period the eurozone (EA19) expanded by 0.4%. When comparing Quarter 1 2014 with Quarter 1 2015, EA19 grew by 1.0% whilst EU28 expanded by 1.4% (Figure 16). EA19 estimates now include Lithuania which joined the EU 1 January 2015.
Germany saw its GDP grow by 0.3% between Quarter 4 2014 and Quarter 1 2015, a decrease in growth of 0.4 percentage points from the previous quarter-on-quarter growth. In contrast, GDP for France increased by 0.6% between Quarter 4 2014 and Quarter 1 2015, having seen no increase between Quarter 3 2014 and Quarter 4 2014.
Between Quarter 4 2014 and Quarter 1 2015, GDP for the United States of America (USA) increased by 0.1%; between Quarter 1 2014 and Quarter 1 2015, GDP for the USA rose by 3.0%. GDP for Japan continued to increase in Quarter 1 2015, growing by 0.6%, following a 0.3% increase in the previous quarter. However between Quarter 1 2014 and Quarter 1 2015, Japan's economy contracted by 1.4%.
GDP for the Group of Seven (G7) countries for Quarter 1 2015 was not available at the time of preparation of this publication.
Table 2: International GDP quarterly growth rate comparisons for selected economic areas, quarter-on-quarter
|Chained volume, seasonally adjusted|
|Source: Office for National Statistics|
|1. EU28 is the European Union|
|2. EA19 is the eurozone|
|3. G7 is the Group of Seven countries|
|4. Q1 refers to Quarter 1 (Jan to Mar)|
|5. Q2 refers to Quarter 2 (Apr to June)|
|6. Q3 refers to Quarter 3 (July to Sept)|
|7. Q4 refers to Quarter 4 (Oct to Dec)|
Download this table Table 2: International GDP quarterly growth rate comparisons for selected economic areas, quarter-on-quarter.xls (28.2 kB)
Figure 17 shows GDP for the UK, EU, the USA and Japan, all indexed to Quarter 1 2008 (the pre-downturn peak in the UK) to allow comparison of each since that period.
More detailed information on these estimates can be found on the Eurostat website. Information on the estimates for the USA can be found on the Bureau of Economic Analysis website; information on the estimates for Japan can be found on the Japanese Cabinet Office website while information for the G7 countries can be found on the Organisation for Economic Co-operation and Development’s website.Back to table of contents
GDP and components, previously published on 28 April 2015
Figure 18 shows quarterly revisions between latest and previously published estimates of GDP. The only period open for revision in this release is Quarter 1 (Jan to Mar) 2015.
Revisions for the GDP Output approach are shown in Annex E (36.5 Kb Excel sheet) of this release.Back to table of contents
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