GDP monthly estimate, UK: December 2022

• Monthly real gross domestic product (GDP) is estimated to have fallen by 0.5% in December 2022, following an unrevised growth of 0.1% in November 2022.

• Looking at the broader picture, GDP was flat in the three months to December 2022, and annual GDP output is estimated to have grown by 4.1% in 2022, following growth of 7.4% in 2021.

• The services sector fell by 0.8% in December 2022, after unrevised growth of 0.2% in November 2022; the largest contributions to this fall came from human health activities, education, arts, entertainment and recreation activities, and transport and storage.

• Output in consumer-facing services fell by 1.2% in December 2022, following growth of 0.4% in November 2022 (revised up from 0.2%).

• Production output grew by 0.3% in December 2022, following growth of 0.1% (revised up from a 0.2% fall) in November 2022. The main contributor to this growth was electricity, gas, steam and air conditioning supply.

• The construction sector was flat in December 2022 after a fall of 0.5% (revised down from being flat) in November 2022.

Monthly real gross domestic product (GDP) is estimated to have fallen by 0.5% in December 2022 (Figure 1) following unrevised growth of 0.1% in November 2022. Monthly GDP is now estimated to be 0.5% below its pre-coronavirus (COVID-19) levels (February 2020). Annual GDP output is estimated to have grown by 4.1% in 2022, following growth of 7.4% in 2021.

The services sector fell by 0.8% in December 2022 and was the main driver of the fall in GDP. Production grew by 0.3% in December 2022 and construction remained flat on the month.

Looking more broadly, GDP was flat in the three months to December 2022 when compared with the three months to September 2022. The services sector was flat in the three months to December 2022, while production fell by 0.2% and construction grew by 0.3% in this period. These figures are consistent with the quarterly output measure within our latest GDP first quarterly estimate, UK: October to December 2022 bulletin.

Monthly GDP fell by 0.1% in December 2022 compared with the same month last year. For comparison, monthly GDP grew by 0.6% between November 2021 and November 2022 (revised up from a growth of 0.2% in our previous publication).

Services fell by 0.8% in December 2022, following unrevised growth of 0.2% in November. Figure 3 shows the contributions from the services sector to GDP in December 2022.

The largest driver of the fall in services in December 2022 was human health and social work activities, which fell by 2.8%. This was driven by a 4.2% fall in the human health activities industry, which saw broad falls across the industry. This included fewer GP appointments and operations, partly because of the impact of strikes. A second consecutive fall was seen in the NHS Test and Trace and vaccine programmes, especially vaccination activity.

The second largest contribution to the fall in services was education, which fell by 2.6% in December. This was the industry’s fourth consecutive monthly contraction. In this latest month there was a significant drop in attendance levels, especially in the run-up to Christmas.

There was also a fall in arts, entertainment and recreation, of 7.8%. This was driven largely by a fall of 17.0% in sports activities and amusement and recreation activities in December. This was when the Premier League had fixtures moved for the 2022 FIFA World Cup, not resuming play until 26 December.

The largest positive contribution in services in December came from professional, scientific and technical activities which saw 0.7% growth. This was mainly from 3.1% growths in both legal activities and in the architectural and engineering activities; technical testing and analysis industry.

NHS Test and Trace services and vaccine programmes

NHS Test and Trace and coronavirus (COVID-19) vaccination programme activity fell by 59% in December 2022 and also fell by 59% in November 2022 (Figure 4). This was driven by a fall in vaccine activity as the Autumn booster programme slowed. Overall, NHS Test and Trace and the COVID-19 vaccination programme detracted 0.1 percentage points from 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 our accompanying dataset.

Consumer-facing services

Output in consumer-facing services fell by 1.2%, following a growth of 0.4% (revised up from 0.2% in our last publication) in November 2022. However, consumer-facing services were 8.9% below their pre-coronavirus levels (February 2020) in December 2022, while all other services were 1.5% above (Figure 5).

The largest contribution to the fall in consumer-facing services in December 2022 came from sports activities and amusement and recreation activities. These fell by 17.0% in a month where the Premier League had fixtures moved for the 2022 FIFA World Cup, not resuming play until 26 December.

There were also negative contributions from retail trade, except of motor vehicles and motorcycles, which fell by 1.0% in December 2022. In our Retail sales, Great Britain December 2022 bulletin we noted that "there was continued feedback from retailers suggesting that consumers are cutting back on spending because of increased prices and affordability concerns."

The largest positive contribution in consumer-facing services in December 2022 was from the wholesale and retail trade and repair of motor vehicles and motorcycles industry. This grew by 3.5% in December and was the industry's third consecutive monthly increase. The Society of Motor Manufacturers and Traders (SMMT) in their December 2022 New Car Registrations web page mentions that it was a strong month for battery electric vehicles.

Three month and annual growth

The services sector was flat overall in the three months to December 2022 compared with the three months to September 2022. Negative growth in 8 of the 14 services sub-sectors was offset by positive contributions in the other 6.

Annual services output for 2022 grew by 5.5%, following growth of 7.0% in 2021.

More detailed breakdowns on services are available in our Index of Services, UK: December 2022 bulletin.

Production output grew by 0.3% in December 2022, after growth of 0.1% in November 2022 (revised up from a fall of 0.2% in the last publication). The sector saw growth in two of its four subsectors, with electricity, gas, steam and air conditioning supply being the largest contributor to the production sector’s positive growth.

Manufacturing remained flat in the month. There were falls in the manufacture of food products, beverages and tobacco (down 1.0%), manufacture of chemicals and chemical products (down 1.6%), other manufacturing and repair (down 0.9%) and the manufacture of wood and paper products, and printing (down 1.0%). Manufacturing saw falls in 8 of its 13 subsectors, however they were fully offset by the growth seen in the other 5 (Figure 7).

Manufacture of basic pharmaceutical products and pharmaceutical preparations was the largest positive contributor (up 2.0%). There were also growths in the manufacture of rubber and plastics products, and other non-metallic mineral products (up 1.4%) and the manufacture of machinery and equipment not elsewhere classified (n.e.c.) (up 1.6%).

Electricity, gas, steam and air conditioning supply was the largest positive contributor to production, growing by 5.2%. There was growth of 4.4% in the manufacture of gas and a growth of 5.6% in electric power generation, transmission and distribution. Energy trends data (Excel, 120KB) produced by the Department for Energy Security and Net Zero (DESNZ) show that the average temperature in December 2022 was 2.4 degrees lower than in December 2021.

Water supply and sewerage grew by 0.7% in December 2022. This growth was driven by both sewerage and water collection, treatment and supply which increased by 1.3% and 1.5%, respectively.

Mining and quarrying was the largest negative contributor to production, falling by 4.6% in December 2022. This was driven by a 5.3% fall in the extraction of crude petroleum and natural gas industry.

Overall, production decreased by 0.2% in the three months to December 2022, compared with the three months to September 2022. This was driven primarily by electricity, gas, steam and air conditioning supply, which fell by 1.3%.

Annual production output fell by 3.6% in 2022, following growth of 7.3% in 2021.

More detailed breakdowns on production are available in our Index of Production, UK: December 2022 bulletin.

Monthly construction output was flat (0.0% growth) in volume terms in December 2022 (Figure 8). This follows a decrease of 0.5% in November 2022, which is revised down 0.5 percentage points in this release.

The flat month for construction output in December 2022 was because of an increase in new work (up 0.5%), which was then offset by a fall in repair and maintenance (down 0.7%). Five out of the nine sectors saw an increase on the month.

At the sector level, the main positive contributors were seen in non-housing repair and maintenance and infrastructure new work, which increased 5.4% and 3.7%, respectively. The main negative contributors were seen in private housing, with repair and maintenance and new work falling 8.5% and 2.3%, respectively.

Anecdotal evidence received from returns from the Monthly Business Survey for Construction and Allied Trades (MBS) suggests that freezing temperatures and heavy rainfall in December 2022 may have seen many businesses shut down for Christmas for longer than is usually expected. The Met Office confirmed in their Monthly climate summary that December 2022 was the UK's coldest December since 2010. Additionally, businesses have continued to reference economic worries affecting their customers' likelihood to request construction work. These comments have covered clients in households, businesses and the public sector.

Overall, construction grew by 0.3% in the three months to December 2022, compared with the three months to September 2022. Annual construction output grew by 5.6% in 2022, following growth of 13.1% in 2021.

Further detail on construction output growth rates, along with new orders in the construction industry and construction output prices, can be found in our Construction output in Great Britain: December 2022, new orders and Construction Output Price Indices, October to December 2022 bulletin.

There was anecdotal evidence to suggest that rail strikes had negatively impacted some businesses. Most comments were received from restaurants, caterers, hotels and bars, but other affected units included those engaged in the manufacture of jewellery, the wholesale of food, beauty treatments and the wholesale of wine. Units involved in car hire and in land transport reported an increase in turnover because of the rail strikes.

There was also anecdotal evidence that postal strikes had negatively impacted some businesses. The units affected included businesses engaged in financial planning, hospitality, computer repair, and management consulting. Other units affected include those involved in the manufacture of metal doors and windows, blankets and jewellery and the wholesale of flowers, watches, garden furniture, computer equipment, optical equipment, motor vehicle parts, and households’ goods.

While the direct impact of the strikes by rail and postal workers can be seen in the rail transport and postal and courier activities industries, we are not able to isolate the impact of these strikes from other factors across the wider economy. However, there was anecdotal evidence to suggest that this industrial action had an impact across a wide range of industries.

This release gives new data for December 2022 and revisions back to January 2022, consistent with our GDP first quarterly estimate release on the same day.

The next monthly GDP release on 10 March 2023 will have no periods open for revision in line with our National Accounts Revision Policy.

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.

Real GDP

Real GDP excludes any inflationary issues and reflects the changes in volume terms. This can also be referred to as volume estimates of GDP.

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

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

• Construction output in Great Britain: December 2022, new orders and Construction Output Price Indices, October to December 2022

• Index of Production, UK: December 2022

• Index of Services, UK: December 2022

There have been large movements in UK gross domestic product (GDP) over the course of the coronavirus (COVID-19) 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-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-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).

However, the 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 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 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 (ABS) 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 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. This means that caution is advised when looking at the monthly estimates beyond the latest published quarter.

The Office for National Statistics (ONS) is 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.

Additional bank holiday in September 2022 for the State Funeral of Queen Elizabeth II

For the state funeral of Queen Elizabeth II there was an additional bank holiday on 19 September 2022. This led to one fewer working day in September 2022. This should be considered when interpreting the movements involving September and October 2022. Previous experience of additional, or substitute, bank holidays in 2002 and 2012 highlighted that such events might lead to more volatile movements in the monthly path of GDP.

As part of our usual seasonal adjustment practice, prior adjustments are made for calendar effects (where statistically significant). This includes returns that do not comply with the standard trading period, regular bank holidays, and Easter. Adjustments for repeating and predictable effects are estimated and removed from the final seasonally adjusted series, for example a permanent change in the seasonal pattern. Adjustments for effects that do not repeat are estimated and removed during the seasonal adjustment process, but are then put back into the final seasonally adjusted series. For example, as with the effect of extreme weather, or one-off quantifiable events.

The additional bank holiday in September 2022 is not regular, so there was not an explicit adjustment to account for it as part of the seasonal adjustment process. However, indirectly, the timing of the bank holiday will affect the number of trading days in the period where it falls. There is likely to be some impact on our GDP estimates (positive or negative depending on the sector) in September 2022 because of the additional bank holiday. This is an ad hoc effect, so it did not get removed from our GDP seasonally adjusted estimates.

In our figures, we reviewed the trading day patterns of all industries, considering the timing of the additional bank holiday, ensuring the genuine activity from the bank holiday was reflected in our published GDP seasonally adjusted estimates. We will continue to review our seasonal adjustment parameters on a regular basis.

Users are therefore likely to find an effect related to one fewer working day in September in the seasonally adjusted series. Caution should be taken when interpreting the seasonally adjusted movements involving September and October 2022, and the rolling three-month estimates including these months.

Quality and methodology information on strengths, limitations, appropriate uses, and how the data were created is available in our 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.