GDP monthly estimate, UK : August 2022

• Gross domestic product (GDP) is estimated to have fallen by 0.3% in August 2022, after growth of 0.1% in July 2022 (revised down from a growth of 0.2% in our previous publication).

• There has been a continued slowing in the underlying three-month on three-month growth, where GDP also fell by 0.3% in the three months to August compared with the three months to May 2022.

• Production fell by 1.8% in August 2022 after a fall of 1.1% in July 2022 (revised down from a fall of 0.3% in our previous publication) and was the main contributor to the fall in GDP; this fall was mainly because of a decrease of 1.6% in manufacturing.

• Services fell by 0.1% in August 2022, after growth of 0.3% in July 2022 (revised down from a 0.4% growth in our previous publication); human health and social work activities, and arts, entertainment and recreation activities fell by 1.3% and 5.0% respectively and were the largest contributors to the small fall in services in August, partially offset by growth of 1.2% in professional, scientific and technical activities.

• Construction grew by 0.4% in August 2022, after growth of 0.1% in July 2022 (revised up from a fall of 0.8% in our previous publication); the increase in monthly construction output in August came solely from a 1.9% increase in new work, as repair and maintenance saw a decrease of 2.0% on the month.

• Output in consumer-facing services fell by 1.8% in August 2022, after growth of 0.7% in July 2022 (revised up from growth of 0.6% in our previous publication).

Monthly real gross domestic product (GDP) is estimated to have fallen by 0.3% in August 2022 (Figure 1) following growth of 0.1% in July 2022 (revised down from a growth of 0.2% in our previous publication).

Monthly GDP is now estimated to be at the same level as its pre-coronavirus levels (February 2020).

The production sector fell by 1.8% in August 2022 and was the main driver of the fall in GDP. Services also fell by 0.1% in August 2022 while construction grew by 0.4%, its second consecutive increase after growth of 0.1% in July 2022 (revised up from a 0.8% fall in our previous publication) (Figure 2).

GDP fell by 0.3% in the three months to August 2022 compared with the previous three months to May 2022, with a 1.5% fall in production, 0.1% fall in services and flat growth in construction.

Monthly GDP grew by 2.0% between August 2021 and August 2022, down from 3.1% between July 2021 and July 2022 (revised up from 2.3% in our previous publication).

Services fell by 0.1% in August 2022, following growth of 0.3% in July 2022 (revised down from 0.4% growth in our previous publication). Figure 3 shows the contributions from the services sector to gross domestic product (GDP) in August 2022.

Human health and social work activities fell by 1.3% in August 2022 and was the largest negative contributor to the services fall. This was entirely driven by human health activities, which fell by 1.9% in the month. There were downward contributions in all areas of human health activities, slightly offset by a growth in GP services. Further details of the impact of the NHS Test and Trace services and vaccination programme follow.

The second-largest negative contribution within services came from arts, entertainment and recreation, which fell by 5.0% in August 2022. This fall was almost entirely driven by sports activities and amusement and recreation activities, which fell by 9.4% in the month after a strong July, which included a number of large sporting events. There was also a 7.0% fall in libraries, archives, museums and other cultural activities in August, which were less popular than expected.

These falls were offset by a rise in professional, scientific and technical activities, of 1.2%, after two consecutive falls. This sub-sector saw growth in all eight industries.

NHS Test and Trace services and vaccine programmes

NHS Test and Trace and COVID-19 vaccination programme activity decreased by 28% in August 2022, driven by decreases in both testing and vaccine activity.

• Coronavirus (COVID-19) testing volumes for August fell by 25% from July; this was driven both by decreases in laboratory-processed testing and lateral flow (LFD) testing.

• Tracing volumes fell to zero in March 2022 for England and remain there; all contact tracing within the UK stopped as of June 2022.

• Vaccine volumes fell by 46% compared with July 2022.

Overall, the NHS Test and Trace and the COVID-19 vaccination programme contributed negative 0.1 percentage points to monthly GDP growth.

A full record of the volume estimates of Test and Trace and vaccination programmes, along with their contribution to GDP growth, can be found in the accompanying dataset: Health volume adjustments and contribution to GDP growth.

Consumer-facing services

Output in consumer-facing services fell by 1.8% in August 2022, following growth of 0.7% in July 2022 (revised up from 0.6% in our previous publication). Consumer-facing services were 8.9% below their pre-coronavirus levels (February 2020) in August 2022, while all other services were 2.1% above (Figure 4).

The largest negative contributing industry was sports activities and amusement and recreation activities, which fell by 9.4% in the month. This follows a strong July growth of 12.7% in which a number of large sporting events took place.

The second-largest contributor to the fall in consumer-facing services was retail trade, except of motor vehicles and motorcycles, which fell by 1.6% in August 2022. This is the largest fall for the industry since December 2021; the industry has now fallen nine times in the last 10 months. The ONS publication Retail sales, Great Britain: August 2022 notes a downward trend in the industry since summer 2021 following the lifting of restrictions on hospitality; and that in recent months, rising prices and cost of living are also affecting sales volumes.

These falls were partially offset by a rise in veterinary activities of 4.6% in August 2022 after two consecutive falls of 1.3% in July and 1.3% in June.

Overall, services fell by 0.1% in the three months to August 2022 compared with the previous three months to May 2022, with negative growth seen in 7 of the 14 services sectors, partially offset by positive contributions in the other seven services sectors.

More detailed breakdowns on services are available in the Index of Services, UK: August 2022.

Production output fell by 1.8% in August 2022, with negative growth in three of the four sectors. This is the sector’s third consecutive fall, after falling by 1.1% in July 2022 (revised down from a fall of 0.3% in our previous publication).

Manufacturing was the main driver of negative production growth, falling by 1.6% on the month. Notable falls were seen in the manufacture of basic pharmaceutical products and pharmaceutical preparations (down 6.0%), manufacture of transport equipment (down 3.0%) and manufacture of basic metals and metal products (down 2.8%). Manufacture of chemicals and chemical products saw growth of 1.1% and made the largest positive contribution to manufacturing, though not enough to significantly offset falls elsewhere.

Within manufacture of transport equipment, the manufacture of motor vehicles, trailers and semi-trailers accounts for most of the fall, decreasing by 6.2%. Manufacture of basic iron and steel was the main driver within manufacture of basic metals and metal products, falling by 16.9% on the month.

Mining and quarrying was the second-largest contributor to negative production growth in August 2022, falling by 8.2%. This was wholly driven by extraction of crude petroleum and natural gas, which decreased by 10.6% on the month as a result of more planned maintenance than usual in the sub-sector.

Electricity, gas, steam and air conditioning supply fell by 0.6%, with a 1.2% fall in electric power generation, transmission and distribution being slightly offset by manufacture of gas, which grew by 0.4%. According to anecdotal evidence from the Department for Business, Energy and Industrial Strategy (BEIS), demand in August was 2.4% lower than that seen in August 2021. In August 2022 average temperatures were 2.2 degrees Celsius higher than in August 2021. The estimated drop may also indicate some changes in consumer behaviour in response to recent price rises. This is further shown in our recent Consumer price inflation, UK: August 2022 bulletin where electricity prices rose by 54% in the 12 months to August 2022.

Water supply and sewerage was broadly flat in August 2022, with a fall in sewerage of 1.3% cancelled out by 1.4% growth in waste collection, treatment and disposal activities; materials recovery.

Overall, production decreased by 1.5% in the three months to August 2022, compared with the previous three months to May 2022, driven primarily by manufacturing, which fell by 2.2%. There were also declines in mining and quarrying, and water supply and sewerage, which fell by 2.7% and 0.7% respectively. Electricity, gas, steam and air conditioning supply was the only sector that saw growth, up by 3.5% over the same period.

More detailed breakdowns on production are available in the Index of Production, UK: August 2022.

Monthly construction output increased by 0.4% in volume terms in August 2022. This is the second consecutive monthly growth following the upwardly revised increase to 0.1% in July 2022. August 2022 is the second highest monthly value in level terms (£15,011 million) with May 2022 remaining at the highest level since records began in January 2010 (£15,035 million).

The 0.4% growth in construction output in August 2022 represents an increase of £60 million in monetary terms compared with July 2022, with 3 out of the 9 sectors seeing an increase on the month.

The increase in monthly construction output in August 2022 came solely from an increase in new work (1.9%) as repair and maintenance saw a decrease (2.0%) on the month. At the sector level, the main contributors to the increase seen in August 2022 were infrastructure, private industrial and private housing new work, which increased 5.3%, 4.3% and 1.7% respectively.

Alongside the monthly increase, construction output saw a slight increase of 0.1% in the three months to August 2022. This came solely from an increase seen in new work (1.6%) as repair and maintenance saw a decrease (2.4%). This is the 10th consecutive period of growth in the three-month on three-month series, however, the slowest rate of growth since the three months to October 2021, which saw a fall of 0.7%.

Further detail on construction output growth rates can be found in Construction output in Great Britain: August 2022.

There were some common themes that were anecdotally reported (as part of the Monthly Business Survey) to have played a part in performance across different industries. However, it is often difficult to quantify these effects.

Staff shortages continued to be an issue for businesses with difficulties being reported by businesses working in road haulage, hire of catering equipment, repair and maintenance of motor vehicles, hotels, restaurants and coffee shops, and employment agencies.

There were mixed comments on the availability of semiconductors with businesses in wireless telecommunications, the manufacture of radio equipment and the wholesale of electronic and telecommunications equipment reporting shortages. However, there were also comments from businesses in the manufacture of computers and the manufacture of motor vehicles that suggested the shortage in supply was easing.

This release gives data for August 2022 for the first time. It also incorporates revisions to monthly data from January 1997 to June 2022, as published in our Quarterly national accounts bulletin on 30 September 2022. July 2022 is also open to revision, taking on updated survey data and seasonal adjustment reviews. Table 2 shows the revisions to monthly gross domestic product (GDP) and its sectors for April 2022 to July 2022, since the last monthly publication on 12 September 2022.

The downward revision in July for production was driven by manufacturing where revised survey data have been received. The upward construction revisions were caused by a mixture of survey revisions and seasonal adjustment.

A wide range of improvements to sources and methods have been incorporated into the accounts in this monthly GDP estimate as part of Blue Book 2022 as detailed in our Impact of Blue Book 2022 changes on gross domestic product article. These include:

• measuring the insurance industry using Solvency II regulatory data for the first time

• completing the transition to the improved Financial Survey of Pension Schemes

• a package of better sources and methods that improve the international comparability of the UK GDP estimates

• estimating 2020 for the first time using the supply and use tables (SUTs) framework, which looks at the supply of goods and services on a very detailed level, how they are used in the economy, and their associated prices

These improvements have previously been reflected in the September quarterly national accounts estimate with which the monthly GDP estimate has now aligned with from January 1997 to June 2022.

Contribution to growth

Contribution to growth indicates how many percentage points a sector or industry is adding or removing from a given growth rate, usually headline gross domestic product (GDP) growth.

Gross domestic product (GDP)

A measure of the economic activity produced by a country or region. GDP growth is the main indicator of economic performance. There are three approaches used to measure GDP:

• the output approach

• the expenditure approach

• the income approach

Index numbers

Data relative to a given base value, which typically refers to a year.

Rolling three-month growth

Rolling three-month growth takes the average level of three consecutive months (for example, April, May and June), and compares it with the average level of the previous three months (for example, January, February and March). The rolling three-month growth rate is often used alongside the monthly growth rate, as the latter can be more volatile.

For further definitions, please see the Glossary of economic terms.

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

• Construction output in Great Britain: August 2022
• Index of Production, UK: August 2022
• Index of Services, UK: August 2022

There have been large movements in UK gross domestic product (GDP) over the course of the coronavirus pandemic. This is primarily in response to public health restrictions and voluntary social distancing that have been in place over this period. Given the size of these effects, there has been a focus on where the economy is relative to its pre-coronavirus pandemic levels.

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

However, the coronavirus pandemic has brought many measurement challenges that have created more uncertainty around our three approaches. 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. Further information is available in Measuring monthly and quarterly UK gross domestic product during the coronavirus (COVID-19) pandemic.

Estimates for the construction industry within monthly GDP will differ to those published in the construction output release as 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.

Within the monthly GDP publication, government data are sourced on a quarterly basis; a monthly forecast is used to estimate data for the monthly round until quarterly data are available. While this is a standard practice with many of our data sources, pre-empting the behaviour of a series during a pandemic, in particular for health and education, comes with more uncertainty than usual, so caution is advised when looking at the monthly estimates beyond the latest published quarter.

We are aware of reclassifications or relocations of companies that may impact these published estimates of GDP and associated breakdowns. We are monitoring the data and will seek to implement any resulting changes into the national accounts as soon as possible.

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

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: Monthly gross domestic product by gross value added.