GDP monthly estimate, UK: February 2021

• UK gross domestic product (GDP) is estimated to have grown by 0.4% in February 2021, as government restrictions affecting economic activity remained broadly unchanged.

• The service sector grew by 0.2% in February 2021, as wholesale and retail trade sales picked up a little but, overall, consumer-facing services industries remain well below pre-pandemic (February 2020) levels.

• Output in the production sector grew by 1.0% in February 2021, as manufacturing grew 1.3% following contraction in January.

• The construction sector grew by 1.6% in February 2021, driven by growth in both new work and repair and maintenance.

• February’s GDP is 7.8% below the levels seen in February 2020, compared with 3.1% below the initial recovery peak in October 2020.

• Latest estimates show that January’s GDP fell by 2.2%, an upward revision from negative 2.9%.

Monthly real gross domestic product (GDP) is estimated to have increased by 0.4% in February 2021 following a revised fall of 2.2% in January 2020. Restrictions were in place to varying degrees across all four nations of the UK throughout January and February. Restriction announcements for each nation are available:

• England
• Scotland
• Wales
• Northern Ireland

The output approach to GDP shows that February’s level is 7.8% below that seen in February 2020 and is 3.1% below levels seen in October 2020, the initial recovery peak. Overall, all main sectors of GDP remain below their pre-pandemic (February 2020) levels, but only services remains notably lower than the initial recovery peak in October 2020.

Output growth in the services sector was broadly flat in February 2021 (grew by just 0.2%) as coronavirus (COVID-19) restrictions remained largely unchanged; this follows negative 2.5% growth in January 2021. The largest contributor to growth in services output in February 2021 was wholesale and retail trade as sales picked up slightly. However, the services sector remains 8.8% below the level of February 2020 compared with 3.9% below its initial recovery peak in October 2020.

The production sector also grew in February 2021, by 1.0%. This was mainly because of manufacturing output picking up for the first time since November 2020 as the manufacture of motor vehicles, trailers and semi-trailers grew following contraction in the previous two months. The production sector is now 3.5% below its February 2020 level.

The construction sector saw growth of 1.6% in February 2021, driven by both new work and repair and maintenance. The construction sector is now 4.3% below the level of February 2020.

Looking ahead, initial results from Wave 27 of the Business Insights and Conditions Survey (BICS), which covered the dates 8 to 21 March 2021, found that of businesses currently trading, 40% reported a negative impact on their turnover compared with what is normally expected for this time of year. This compares with 44% reporting decreases in Wave 25 (8 to 21 February 2021).

The monthly growth rate for GDP is volatile. It 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.

GDP contracted by 1.6% in the three months to February 2021, down from a revised 1.4% contraction in the three months to January 2021.

As part of this release we are also taking on changes to data through 2020 as published in the UK quarterly national accounts, October to December 2020. Table 2 shows how revisions to monthly GDP headline growth across 2020 averaged 0.23 percentage points, in absolute terms. The largest revisions were seen in April 2020 (a 0.4 percentage points downward revision to negative 18.7% growth) and July 2020 (a 0.6 percentage points upward revision to 7.3% growth). Revisions to service sector growth throughout 2020 is the main cause of this; largely a result of the incorporation of Value Added Tax (VAT) turnover data up to Quarter 3 (July to Sept) 2020 as well as updated methods relating to the measurement of education in the pandemic. Revisions to construction sector growth are also the result of the incorporation of VAT turnover data. More detail on reasons behind revisions can be found in GDP Quarterly National Accounts: October to December 2020.

Services output grew by just 0.2% in February 2021 as coronavirus (COVID-19) restrictions remained largely unchanged; this follows a revised negative 2.5% growth in January 2021. The services sector remains 8.8% below the pre-pandemic level of February 2020.

Figure 3 shows the performance of total services output, a composite industrial indicator based on output in consumer-facing services, and output in all other industries in the services sector. In January 2021, consumer-facing services such as trade of motor vehicles and retail trade as well as food and beverage services weakened as restrictions were reintroduced across the UK. These weaknesses largely remained in February 2021 as restrictions remained broadly unchanged. However, wholesale and retail trade did pick up in sales, growing 3.3% and contributing to the 0.2% growth in services. Overall, in February 2021, consumer-facing services were 18.6% below pre-pandemic levels (February 2020), while all other services were 7% below pre-pandemic levels.

Health output saw a slight contraction in February 2021 of 2.7%. This follows historically high output levels in January 2021, mainly due to coronavirus testing and tracing and vaccine schemes across the UK. Adjustments for these programmes decreased overall GDP by 0.1 percentage points in February 2021 in comparison to January 2021; some of these adjustments are in other industries than health. More information is available in Section 8: Measuring the data.

Service sector growth for January 2021 was revised upwards by 1.0 percentage points to negative 2.5%. Almost half of the upward revision was because of upward revisions in accommodation and food service activities, where growth was revised up by 13 percentage points to negative 15.1%. Most of the revisions across services were because of the incorporation of late survey returns.

Services output contracted by 1.9% in the three months to February 2021. This was driven by decreases in education services and wholesale and retail trade, partly offset by growth in human health and social work activities.

Production increased by 1.0% in February 2021, with growth in three out of the four sub-sectors. The manufacturing sub-sector was the largest contributor to growth in production as it increased by 1.3%. This follows a contraction in January 2021 and a revised contraction in December 2020, which was the first decline since April 2020. Seven out of the thirteen manufacturing sub-sectors grew. The largest positive contributions came from the manufacture of transport equipment sector (which grew by 5.4%) and manufacturing of computer, electronic and optical products (which grew by 9.0%).

Mining and quarrying declined by 2.1% in February 2021. Oil and gas extraction has seen large declines since June 2020, mainly because of tightened COVID-19 restrictions impacting on demand. Electricity, gas, steam and air conditioning supply increased by 0.5% (its fourth month of consecutive growth), while water supply increased 1.4% in February 2021.

Output in the production sector fell by 0.1% in the three months to February 2021. This was driven by a fall in manufacturing in both December 2020 and January 2021.

Construction output grew by 1.6% in February 2021 following revised flat growth in January 2021 (revised down from 0.9% growth due to late survey returns). The monthly growth was driven by both a rise in repair and maintenance (1.9%) and in new work (1.5%).

The growth in repair and maintenance was mainly driven by private housing (growing 4.7%). The growth in new work was mainly driven by private commercial (growing 4.0%) and public housing (growing 13.5%).

Previous estimates suggested that construction had recovered to its pre-pandemic (February 2020) levels in November 2020, however, following revisions, the construction sector in February 2021 is 4.3% below pre-pandemic levels.

The construction sector contracted by 1.0% in the three months to February 2021. The main contributors were new work in private commercial, private new housing and private industrial, which contracted by 5.3%, 2.3% and 13.6% respectively.

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 GDP growth.

Gross domestic product (GDP)

A measure of the economic activity produced by a country or region. Gross domestic product (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.

The ONS is publishing more data and analysis than ever before. We are constantly reviewing our publications based on your feedback to make sure that we continue to meet the needs of our users. As a result, future editions of this publication will focus more strongly on headline indicators and main messages. Thank you for your continued support and we value your feedback.

Revisions

This release gives data for February 2021 for the first time. January 2021 is open for revisions, and all months of 2020 are brought in line with the data released as part of the Quarter 4 (Oct to Dec) Quarterly National Accounts.

Coronavirus (COVID-19)

This release captures the direct effects of the coronavirus (COVID-19) pandemic and the government measures taken to reduce transmission of the virus. We have faced an increased number of challenges in producing monthly and quarterly estimates of UK gross domestic product (GDP). More detailed information on the challenges and the steps taken to mitigate those can be found in Coronavirus and the effects on UK GDP.

As a result of these challenges, GDP estimates for February 2021 are subject to more uncertainty than usual.

Early in the pandemic we faced some challenges in timely responses to the monthly business survey as businesses adapted to new conditions. In recent months response rates have improved and are shown for the latest months in Table 3.

Adjustments for testing and tracing and vaccine programmes in the UK

An adjustment has been applied to the data for the impact from testing and tracing, and vaccines programmes. The February adjustment across all industries for vaccines, and testing and tracing was £3,400 million, whereas the January adjustment across all industries for vaccines and testing and tracing activities, in volume terms, was £3,600 million. The small reduction in volumes in testing and tracing reflects the fact that there were slightly fewer COVID-19 tests conducted in February. The equivalent total December 2020 combined adjustment for vaccines, and testing and tracing was £2,200 million. The volume reduction in activity in February over January reduced GDP growth by 0.1 percentage points. Not all of this extra activity will be seen in the output of the health industry as there are other industries involved in the production of the vaccines and various testing kits, as well as a number of service industries involved in the logistical process of delivering the programmes.

These very approximate initial estimates are informed by available in-year spending data for testing and tracing; the available estimated cost to secure and manufacture vaccines for the UK and deploy vaccines in England; available testing and vaccination data and estimated imports. These are early estimates that will be refined as a new method is introduced later this year.

End of EU Exit Transition period

As the transition period has ended and the UK enters into a new Trade and Cooperation Agreement with the EU, the UK statistical system will continue to produce and publish our wide range of economic and social statistics and analysis. We are committed to continued alignment with the highest international statistical standards, enabling comparability both over time and internationally, and ensuring the general public, statistical users and decision makers have the data they need to be informed.

Additionally, the Withdrawal Agreement outlines a need for UK gross national income (a fundamental component of the national accounts, which includes GDP) statistics to remain in line with those of other EU countries until EU budget contributions are finalised for the years in which we were a member, and making budget contributions during the transition period. To ensure this comparability during this period, the national accounts will continue to be produced according to European System of Accounts (ESA) 2010 definitions and standards until at least 2024.

As the shape of the UK’s future statistical relationship with the EU becomes clearer over the coming period, the Office for National Statistics (ONS) is making preparations to assume responsibilities that as part of our membership of the EU, and during the transition period, were delegated to the statistical office of the EU, Eurostat. This includes responsibilities relating to international comparability of economic statistics, deciding what international statistical guidance to apply in the UK context and to provide further scrutiny of our statistics and sector classification decisions.

In applying international statistical standards and best practice to UK economic statistics, we will draw on the technical advice of experts in the UK and internationally, and our work will be underpinned by the UK’s well-established and robust framework for independent official statistics, set out in the Statistics and Registration Service Act 2007. Further information on our proposals will be made available later this year.

Communicating gross domestic product

Recent analysis explains our latest position on how we are looking to communicate GDP, including how we will continue to acknowledge that ’technical’ recessions are comprised of at least two consecutive quarters of contracting GDP.

While it is still true that these early estimates are prone to revision, we prefer to focus on the magnitude of the contraction that has taken place following the COVID-19 pandemic. It is clear that the contraction in GDP in Quarter 2 (Apr to June) 2020 was in the largest recession on record. Our latest estimates show that the UK economy is now 7.8% smaller than it was in February 2020, the effects of which have been most pronounced in those industries that are most exposed to public health restrictions and the effects of social distancing.

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