GDP first quarterly estimate, UK: January to March 2024

First quarterly estimate of gross domestic product (GDP). Contains current and constant price data on the value of goods and services to indicate the economic performance of the UK.

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Cyswllt:
Email Gross Domestic Product team

Dyddiad y datganiad:
10 May 2024

Cyhoeddiad nesaf:
28 June 2024

1. Main points

  • UK gross domestic product (GDP) is estimated to have increased by 0.6% in Quarter 1 (Jan to Mar) 2024, following declines of 0.3% in Quarter 4 (Oct to Dec) and 0.1% in Quarter 3 (July to Sept) 2023.

  • Compared with the same quarter a year ago, GDP is estimated to have increased by 0.2% in Quarter 1 2024.

  • In output terms, services grew by 0.7% on the quarter with widespread growth across the sector; elsewhere the production sector grew by 0.8% while the construction sector fell by 0.9%.

  • In expenditure terms, there were increases in the volume of net trade, household spending and government spending, partially offset by falls in gross capital formation.

  • Compared with the same quarter a year ago, the implied GDP deflator rose by 4.0%.

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2. Headline GDP figures

UK real gross domestic product (GDP) is estimated to have grown by 0.6% in Quarter 1 (Jan to Mar) 2024, following falls in the previous two quarters (Figure 1). Compared with the same quarter a year ago, real GDP is estimated to have increased by 0.2%.

Figure 1 shows that the economy has increased in the latest quarter following two consecutive quarters of negative growth. As explained in our Communicating the UK economic cycle methodology article, the concept of a “technical” recession comprises two or more consecutive quarters of contracting output. Most experts, as noted in our recent blog, consider other factors, while taking into account the latest data. For example, it is advisable to consider the broader picture such as the depth, diffusion (spread) and duration of the change in GDP.

It is also important to note that early estimates of GDP are subject to revision (positive or negative); for more information please refer to our GDP revisions in Blue Book: 2023 article. In the past, the absolute average revision between the first quarterly GDP estimate and the same quarterly estimate three years later is 0.2 percentage points when more detailed information is available through the comprehensive annual supply and use balancing process. The GDP growth vintages are shown in Table 5. In line with the National Accounts Revisions Policy, no periods are open to revision in this publication.

Our GDP monthly estimates bulletin published today (10 May 2024) show that GDP is estimated to have increased by 0.4% in March, following growth of 0.2% in February (revised up from 0.1% growth), and an unrevised increase of 0.3% in January 2024.

As well as producing estimates of GDP, the Office for National Statistics (ONS) also produces estimates of GDP per capita (or per head), which divides UK GDP by the total UK population. This is one proxy indicator of welfare, rather than production. As the UK population might not be changing at the same rate as GDP, this means that growth in GDP per capita can show a different trend to growth headline GDP.

Real GDP per head is estimated to have increased by 0.4% in Quarter 1 2024, following seven consecutive quarters without positive growth. It is estimated to be 0.7% lower compared with the same quarter a year ago. It is important to note that estimates of GDP per head up to 2021 are based on population estimates, whereas data for 2022 to 2024 are based on interim population projections. In our September quarterly national accounts, we will update our estimates of GDP per head for 2022 in line with the latest mid-year population estimates. Data for 2023 will be updated later in line with mid-year estimates, which are expected to be published in summer 2024.

Nominal GDP is estimated to have increased by 1.2% in Quarter 1 2024, mainly driven by an increase in gross operating surplus of corporations. Compared with the same quarter a year ago, nominal GDP is estimated to have increased by 4.2%.

The implied GDP deflator represents the broadest measure of inflation in the domestic economy, reflecting changes in the price of all goods and services that comprise GDP. It is important to note that the GDP deflator covers the whole of the domestic economy, not just consumer spending, and also reflects the change in the relative price of exports to imports. For more information on the implied GDP deflator, see our Measuring price changes of the UK national accounts: February 2023 article.

The implied price of GDP rose by 0.6% in Quarter 1 2024, where the increase is primarily driven by higher prices in household consumption and gross capital formation. Compared with the same quarter a year ago, the GDP implied deflator further eased to 4.0% (Figure 2).

The three approaches to measuring GDP

As explained in our previous release, UK GDP is estimated to have increased by 0.1% in 2023, following growth of 4.3% in 2022. Data up to 2021 have been reconciled through the supply and use (SUTs) framework to produce one coherent estimate of GDP. Estimates of real GDP in 2022 and 2023 have not yet been fully reconciled in a SUTs framework so this estimate of real GDP growth in 2023 reflects the average of the output, expenditure and income measures.

There are differences in the three approaches to measuring GDP at this stage in the production cycle. The differences in these approaches from 2022 onwards may be for various reasons; this is further discussed in Section 9: Measuring the data.

The UK National Accounts, The Blue Book 2024 scheduled for 31 July 2024 has now been moved to the more usual timetable of 31 October 2024 to allow us further time to update the base year from 2019 to 2022 and assure the quality of this granular data.

As a result, The UK National Accounts, The Blue Book 2024 and UK Balance of Payments, The Pink Book: 2024 will now be published on 31 October 2024 rather than 31 July 2024. This means Blue Book 2024-consistent data will be included for the first time in the GDP quarterly national accounts, UK: April to June 2024 publication on 30 September 2024. Additionally, a new publication, which focuses on Blue Book aggregates up to the end of 2022, will be published at 07:00 on 7 August 2024.

The revision period for the June 2024 quarterly national accounts will now be for Quarter 1 2024 only, in line with our standard National Accounts Revisions Policy.

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3. Output

In Quarter 1 (Jan to Mar) 2024, output is estimated to have grown by 0.6%, following two consecutive falls of 0.1% in Quarter 3 (July to Sept) and 0.3% in Quarter 4 (Oct to Dec) 2023. The growth in the latest quarter was driven by a 0.7% increase in services output. Across Quarter 1, early estimates suggest 13 out of 20 of the subsectors grew, compared with 6 subsectors increasing in the previous quarter.

Services

Services output increased for the first time since Quarter 1 2023 after three consecutive quarters of decline. Services increased in all three months of the quarter: January (0.4%), February (0.3%) and March (0.5%), as explained in our monthly GDP release.

There was widespread growth in the services sector, with 11 out of 14 subsectors increasing in Quarter 1 2024, shown in Figure 3. The largest contributor to the growth in service output was a 3.7% increase in the transport and storage subsector. This was largely driven by growth of 6.4% in land transport services via pipelines (excluding rail transport). This industry saw its highest quarterly growth rate since Quarter 3 2020.

As published in our monthly GDP release, there was strong growth in February 2024 where Monthly Business Survey (MBS) data showed strength in the land transport services industry. A reclassification of a company into this industry, previously allocated in the wholesale trade excluding motor vehicles and motorcycles industry, also contributed to the strong growth.

Professional, scientific and technical activities increased 1.3% in the latest quarter and was the second-largest positive contributor. The growth in this subsector was driven mostly by legal activities, and scientific research and development.

Elsewhere there were falls in accommodation and food service activities (0.2%), and activities of households as employers; undifferentiated goods and services activities of households for own use (3.4%).

Overall, consumer-facing services grew by 0.6% in Quarter 1 2024, following a fall of 0.4% in Quarter 4 2023, and this was largely driven by Retail trade, except of motor vehicles and motorcycles. More information can be found in our Retail Sales publication. Additionally, anecdotal evidence from our UK spending on credit and debit cards dataset showed strong growth in credit and debit card spending on delayables at the start of 2024.

Production

The production sector is estimated to have increased by 0.8% in the latest quarter after a fall of 1.1% in Quarter 4 2023. This reflects a fall of 0.5% in January 2024 followed by growths of 1.0% and 0.2% in February and March, respectively. Further information is provided in our monthly GDP release.

Within production, manufacturing was the largest contributor with 8 out of the 13 manufacturing subsectors performing positively in the latest quarter, as shown in Figure 4.

Manufacturing output is estimated to have increased by 1.4% in Quarter 1 2024 following a fall of 1.0% in Quarter 4 2023. The largest positive contributor was a 5.7% increase in the manufacture of transport equipment, which has grown for six consecutive quarters. Manufacture of basic metals and metal products grew 3.1% and manufacture of food products, beverages and tobacco showed growth of 1.5%. However, this was partially offset by a fall of 3.6% in the manufacture of textiles, wearing apparel and leather, which fell for the sixth consecutive quarter.

Elsewhere in the production sector, electricity, gas, steam and air conditioning supply contributed positively. However, the growth in this sector and manufacturing was partially offset by a fall of 2.4% in water supply; sewerage, waste management and remediation activities, and a fall of 2.2% in mining and quarrying across the quarter.

Construction

Construction output is shown to have fallen by 0.9% in Quarter 1 2024 following a decline of 0.9% in the previous quarter. The level of construction output in Quarter 1 2024 was 0.7% lower than the same quarter a year ago.

The fall reflects a decline in new work of 1.8% driven by private commercial new work, which fell by 5.3%. However, repair and maintenance increased 0.3%. Anecdotal evidence from the Bank of England’s Agents’ summary of business conditions report for Quarter 1 2024 suggests housing associations were re-directing budgets towards repairs and upgrading to deal with problems such as damp arising from tenants using less heating because of the higher cost of living.

Data from the Met Office (PDF, 4.56MB) show wet weather in February 2024, which is likely to have had adverse effects on the construction sector. Construction output fell by 2.0% in February 2024 with declines in both new work, and repair and maintenance.

Further detail on construction output can be found in our Construction output in Great Britain: March 2024, new orders and Construction Output Price Indices, January to March 2024.

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4. Expenditure

There was an increase in the volume of net trade, household spending and government spending in Quarter 1 (Jan to Mar) 2024, partially offset by falls in gross capital formation (Figure 5).

Household consumption

There was an increase of 0.2% in real household expenditure in Quarter 1 2024, following declines in the previous two quarters. Within household consumption, the largest contributions to the growth were from housing, water and fuels, recreation and culture, restaurants and hotels, and household goods and services.

Net tourism contributed negatively to growth in the latest quarter. Net tourism is offset within trade and therefore there is no impact on the gross domestic product (GDP) aggregate. Information on how we measure net tourism is provided in our National Accounts articles: Treatment of tourism in the UK National Accounts. Excluding net tourism, domestic consumption increased by 0.6% in the latest quarter, in line with consumer-facing services in the output approach to measuring GDP, which also increased by 0.6%.

Consumption of government goods and services

Real government consumption expenditure increased by 0.3% in Quarter 1 2024, following an increase of 0.1% in the previous quarter. The increase in government consumption in the latest quarter mainly reflects higher activity in health and transport, which was partially offset by falls in public administration and defence, and education.

The growth in health may reflect less impact of industrial action compared with previous quarters. Further information is provided in our monthly GDP release.

Gross capital formation

Gross fixed capital formation (GFCF) is estimated to have increased by 1.4% in the latest quarter, following growth of 0.9% in Quarter 4 2023. Growth was driven by increases in dwellings and other buildings.

Within gross fixed capital formation, business investment is estimated to have increased by 0.9% in Quarter 1 2024, following a 1.4% increase in the previous quarter. Compared with the same quarter a year ago, business investment is estimated to have fallen by 0.6%.

Excluding the alignment and balancing adjustments, early estimates show that inventories fell by £706 million in Quarter 1 2024. In current price terms, estimates show that there was an increase of £3.2 billion in the latest quarter driven by higher stocks in the manufacturing sector.

Net trade

The UK’s trade deficit for goods and services was 0.6% of nominal gross domestic product (GDP) in Quarter 1 2024. However, this includes non-monetary gold, which is an erratic series, so it can be useful to exclude this from the trade balance. Excluding non-monetary gold, the trade deficit was 1.1% of nominal GDP in Quarter 1 2024 (Figure 6).

Export volumes fell by 1.0% in the latest quarter, the fifth consecutive quarterly fall. The decline in the latest quarter was driven by a 3.4% fall in goods exports, which offset a 1.0% increase in services exports.

The decline in goods exports was mainly driven by large movements in non-monetary gold, however, this series also appears within gross capital formation (GCF) as valuables and so the effect is GDP neutral. Elsewhere there were falls in machinery and transport equipment, and fuels.

The increase in services exports was driven mainly by travel, transport and intellectual property services.

Import volumes fell by 2.3% in the latest quarter, following a fall of 0.3% in Quarter 4 2023. The decline in the latest quarter was driven by a 2.9% fall in goods and 1.3% in services.

The fall in goods imports was driven by declines in machinery and transport equipment, in particular in imports of cars and mechanical power generators. The fall in services imports was mainly because of declines in insurance and pensions, and intellectual property services.

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5. Income

Nominal gross domestic product (GDP) increased by 1.2% in Quarter 1 (Jan to Mar) 2024, following a fall of 0.2% in the previous quarter. Growth in nominal GDP was driven by increases in gross operating surplus of corporations, taxes less subsidies, other income and compensation of employees (Figure 7).

Compensation of employees increased by 0.2% in the latest quarter, driven by an increase of 0.7% in wages and salaries, which offset a 2.2% decline in employers’ social contributions.

Early estimates show that taxes less subsidies increased by 1.4% in Quarter 1 2024, following no growth in the previous quarter. Growth in the latest quarter was driven by a 1.1% increase in taxes (mainly Value Added Tax) and a 2.0% decline in subsidies.

Total gross operating surplus (GOS) of corporations excluding the alignment adjustment, increased by 1.6% (Table 3) with increases in non-financial corporations. Within GOS of corporations there is uncertainty around the full impacts of the Energy Bill Relief and Energy Price Guarantee schemes that impact the first half of 2023. This is because we do not have up-to-date quarterly information on the gross trading profits of businesses as these data are collected from HM Revenue and Customs (HMRC) and are available with a lag of approximately two years. As such we rely on contextual data (as outlined in our Profitability of UK companies Quality and Methodology Information) from other sources to inform these quarterly estimates.

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6. International comparisons

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7. GDP first quarterly estimate data

GDP – data tables
Dataset | Released 10 May 2024
Annual and quarterly data for UK gross domestic product (GDP) estimates, in chained volume measures and current market prices.

GDP in chained volume measures – real-time database (ABMI)
Dataset | Released 10 May 2024
Quarterly levels for UK gross domestic product (GDP), in chained volume measures at market prices.

GDP at current prices – real-time database (YBHA)
Dataset | Released 10 May 2024
Quarterly levels for UK gross domestic product (GDP) at current market prices.

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8. Glossary

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9. Measuring the data

Revisions to GDP

It is also important to note that early estimates of gross domestic product (GDP) are subject to revision (positive or negative); for more information please refer to our GDP revisions in Blue Book: 2023 article. The GDP growth vintages are shown in Table 5. In line with the National Accounts Revisions Policy, no periods are open to revision in this publication.

Reaching the GDP balance

The different data content and quality of the three approaches – the output approach, the expenditure approach and the income approach – dictate the approach taken in balancing quarterly data. In the UK, there are more data available on output in the short term than in either of the other two approaches. To obtain the best estimate of GDP (the published figure), the estimates from all three approaches are balanced to produce an average, except in the latest two quarters where the output data take the lead because of the larger data content.

The three approaches to measuring GDP allow us to confront our data sources within the national accounts framework. Figure 8 shows that real GDP is estimated to have increased by 0.1% in 2023, however, there are differences in the three approaches to measuring GDP at this stage in the production cycle. The differences in these approaches across 2022 and 2023 may be for various reasons.

Output approach

In the output approach, we do not currently have final estimates for intermediate consumption (value of goods and services purchased to be used up in the production of goods and services) as outlined in our Impact of Blue Book 2023 changes on gross domestic product article. Initially, we use turnover and output as a proxy for changes in gross value added and assume that the intermediate consumption ratio by industry, calculated in 2021, holds constant into 2022 onwards. For example, input costs as a proportion of turnover or output remain fixed. In September 2024, data will now be confronted through the supply and use tables (SUTs) framework for the first time, and as a result we will have estimates for intermediate consumption for 2022.

Expenditure approach

In the expenditure approach, we currently have lower response rates for areas such as the Living Costs and Food Survey, which underpin our estimates of household consumption. As explained in our GDP quarterly national accounts, UK: July to September 2023 release, the 2022 annual benchmark data for the International Trade in Services (ITIS) survey are not yet available because of improving sample methodology and requiring additional time to quality assure the data. However, the quarterly ITIS data for 2022 and 2023 were included in this dataset.

Income approach

In the income approach, we do not have up-to-date quarterly information on the gross trading profits of businesses, as these data are collected from HM Revenue and Customs (HMRC) and are available with a lag of approximately two years. We rely on contextual data (as outlined in our Profitability of UK companies Quality and Methodology Information) from other sources to inform these quarterly estimates. There is currently more uncertainty around the compensation of employees figures in this publication because of lower response rates in the Labour Force Survey. We have used additional information from our Pay As You Earn Real Time Information bulletin to help inform the estimates.

Estimates for 2023 will next be open for revision in September 2024 where 2022 data will also be confronted through the SUTs framework for the first time and, as a result there will be one single estimate of GDP for 2022. This release will also incorporate changes from 2020 onwards as well as updating the base year from 2019 to 2022. Further information is provided in our Proposed changes to be implemented in Blue Book and Pink Book: 2024 article.

Quarterly GDP is a balanced measure of the three approaches, while the GDP monthly estimate focuses on gross value added (GVA) and output as a proxy for GDP. This results in data differences (in both levels and growths terms) between the quarterly publications (average GDP) and the GDP monthly estimate (output approach to GDP). Quarterly GDP is the lead measure of GDP because of its higher data content and inclusion of variables, which enable the conversion from a GVA concept to a GDP basis.

Information on the methods we use for Balancing the output, income and expenditure approaches to measuring GDP is available.

Alignment adjustments, found in Table M of our GDP first quarterly estimate data tables, have a target limit of plus or minus £3,000 million on any quarter. However, in periods where the data sources are particularly difficult to balance, larger alignment adjustments are sometimes needed, as explained in our article Recent challenges of balancing the three approaches of GDP. Our standard practice is to prefer that the alignment adjustment be out of tolerance rather than over-adjust individual GDP components to achieve a balance. This is most likely to occur in the latest quarter where the constraints are larger, where we must align to the output estimate for the change in GDP, and where the data content is at its lowest.

To achieve a balanced GDP dataset through alignment, balancing adjustments are applied to the components of GDP where data content is particularly weak in a given quarter because of a higher level of forecast content. The balancing adjustments applied in this estimate are shown in Table 6. The resulting series should be considered accordingly.

Net trade

HM Revenue and Customs (HMRC) implemented a data collection change affecting data on goods exports from Great Britain (GB) to the EU in January 2021, and data on goods imports from the EU to GB in January 2022. For more information see HMRC’s Methodology changes to trade in goods statistics from March 2022 article. We have applied adjustments to our estimates of goods imports from the EU for 2021 to reflect this data collection change, which brought imports and exports statistics onto a like-for-like basis in 2021, as detailed in our Trade in goods: Adjustments to 2021 EU imports estimates, by chapter dataset. The full time series for goods imports from and exports to the EU contains a discontinuity from January 2021 resulting from the move from Intrastat to customs declarations, as detailed in our Impact of trade in goods data collection changes on UK trade statistics: adjustments to 2021 EU imports estimates article. We are continuing to work with HMRC to consider possible options to account for this discontinuity.

Separately, in 2021, the use of Staged Customs Controls (SCC) allowed customs declarations to be reported up to 175 days after the date of import for imports of non-controlled goods from the EU to GB. The UK government introduced full customs controls in January 2022, while July 2022 marked the first full month of data where delayed customs declarations submitted under SCC could not be included. Temporary arrangements still apply for imports of goods from Ireland to GB. In our article Impact of trade in goods data collection changes on UK trade statistics: further update on Staged Customs Controls published on 3 July 2023, we presented analysis on the impact of SCC on trade in goods data for imports from the EU to GB in 2022. We have previously adjusted for the impact of SCC and have published an article Impact of trade in goods data collection changes on UK trade statistics: adjustments to 2022 EU imports estimates providing a detailed breakdown of the impact of these adjustments.

In the December 2023 Quarterly national accounts release, we incorporated a number of better quality but less timely annual datasets for 2022, however, annual data for 2022 from the International Trade in Services (ITIS) Survey have not been included in this dataset as we have been developing and improving methodology for the sample and require additional time to quality assure the data. These will be incorporated in our September 2024 Quarterly national accounts. Quarterly ITIS data for 2022 are included in our current dataset.

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10. Strengths and limitations

The UK National Accounts are drawn together using data from many different sources. This ensures that they are comprehensive and provide different perspectives on the economy, for example, sales by retailers and purchases by households. Further information on measuring gross domestic product (GDP) can be found in the Guide to the UK National Accounts, and more quality and methodology information (QMI) is available in the Gross domestic product (GDP) QMI.

Important quality information

There are common pitfalls in interpreting data series, and these include:

  • expectations of accuracy and reliability in early estimates are often too high

  • revisions are an inevitable consequence of the trade-off between timeliness and accuracy

  • early estimates are often based on incomplete data

Very few statistical revisions arise as a result of “errors” in the popular sense of the word. All estimates, by definition, are subject to statistical “error”.

Many different approaches can be used to summarise revisions; the “Accuracy and reliability” section in the Gross domestic product (GDP) QMI analyses the mean average revision and the mean absolute revision for GDP estimates over data publication iterations.

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12. Cite this statistical bulletin

Office for National Statistics (ONS), released 10 May 2024, ONS website, statistical bulletin, GDP first quarterly estimate, UK: January to March 2024

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Manylion cyswllt ar gyfer y Bwletin ystadegol

Gross Domestic Product team
gdp@ons.gov.uk
Ffôn: +44 1633 455284