GDP monthly estimate, UK : January 2022

• Gross domestic product (GDP) bounced back in January 2022, increasing by 0.8% after falling by 0.2% in December 2021, when the Omicron variant of the coronavirus (COVID-19) and Plan B restrictions had a more significant impact; GDP is now 0.8% above its pre-coronavirus level (February 2020).

• All sectors grew in January 2022, with services up 0.8%, production up 0.7% and construction up by 1.1%.

• Output in consumer-facing services grew by 1.7% in the month, mainly driven by a 6.8% increase in food and beverage activities, while all other services also saw growth on the month, by 0.6%.

• Services is now 1.3% above its pre-coronavirus (COVID-19) pandemic level, while construction is 1.4% above and production is 2.0% below. Within services, consumer-facing services are now 6.8% below their pre-coronavirus levels, while all other services are 3.4% above.

Monthly real gross domestic product (GDP) is estimated to have grown by 0.8% in January 2022, compared with a 0.2% fall in December 2021.

All sectors contributed positively to GDP growth in January 2022. Services were the main driver contributing 0.6 percentage points, with production and construction both contributing 0.1 percentage points (Figure 2).

In January 2022, GDP was estimated to be 0.8% above its pre-coronavirus (COVID-19) pandemic level (February 2020). The main contributors to monthly GDP growth between February 2020 and January 2022 were human health and social work activities, information and communication and professional, scientific and technical activities. The largest drivers of negative growth from monthly GDP between February 2020 and January 2022 were other service activities and real estate activities (Figure 3).

GDP grew by 1.1% in the three months to January 2022. Services was the main contributor in the three months to January with a 0.8 percentage point contribution, while production and construction both also contributed positively, by 0.1 and 0.2 percentage points respectively.

Services output grew by 0.8% in January 2022 and is 1.3% above its pre-coronavirus (COVID-19) pandemic level (February 2020). This followed a 0.5% fall in December 2021.

Wholesale and retail trade grew by 2.5% in January 2022 and was the main contributor to January’s growth in services (Figure 4). The main driver of this growth was wholesale trade, which grew by 3.8%, partly reflecting a bounce back following weakness in December because of the impact of the Omicron variant of coronavirus (COVID-19). In particular, there was strength seen in wholesale of other specialised materials, this includes items such as wood, metal and hardware. January 2022 saw this sub-sector’s first positive growth since September 2021.

Information and communication was the second largest contributor to the growth in services, which grew by 2.9%. Computer programming, consultancy and related activities grew by 6.5% and motion picture, video and tv programme production, sound recording and music publishing activities grew by 6.7% in January 2022.

The largest negative contributor to services growth in January 2022 was professional, scientific and technical activities (down 1.9%). Scientific research and development was the main driver of the decrease with partially offsetting upward contributions from other areas of professional activities, including accounting, bookkeeping and auditing activities; and architectural and engineering activities.

At the services sub-sector level in January 2022, 6 of the 14 were above their pre-coronavirus levels, with the largest contribution from human health and social work activities (growing 15.1% from February 2020).

Consumer facing services

Output in consumer-facing services grew by 1.7% in January 2022, following a 0.2% fall in the previous month, reflecting the impact of the Omicron variant. The January increase was mainly driven by a 6.8% growth in food and beverage service activities following a fall of 8.1% in December 2021, and a 1.9% growth in retail trade. More detailed breakdowns on retail trade are available in Retail sales, Great Britain: January 2022.

Consumer-facing services were 6.8% below their pre-coronavirus levels (February 2020) in January 2022, while all other services were 3.4% above.

Overall, services grew by 1.0% in the three months to January 2022 compared with the previous three months (August to October 2021), with positive growth seen in 9 of the 14 services sub-sectors.

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

NHS Test and Trace services and vaccine programmes

While Human Health grew by 2.0% overall, the NHS Test and Trace and COVID-19 vaccination programme detracted 0.1 percentage points from GDP growth in January 2022 (Table 1). Increases in the test and trace programme (growing 20%) were offset by a large decrease (falling 73%) in the number of vaccinations, following a drive to administer booster doses in December. All other aspects of Health contributed 0.2 percentage points to the change in GDP in January 2022, with GP appointments rising by 1.9% in January.

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

Production output increased by 0.7% in January 2022, primarily driven by 0.8% growth in manufacturing. This follows growth of 0.3% in December 2021.

The growth in manufacturing in January 2022 was widespread with increases in 10 out of the 13 sub-sectors, partially offset by falls of 23.3% in the manufacture of basic pharmaceutical products and pharmaceutical preparations and of 4.5% in the manufacture of transport equipment both of which increased strongly in December 2021.

Electricity, gas, steam and air conditioning supply increased by 1.0% in January 2022, with electric power generation, transmission and distribution increasing by 0.9%. Mining and quarrying grew by 2.0%, driven by extraction of crude petroleum and natural gas (up 1.0%) and other mining and quarrying (up 7.7%). Water supply and sewerage was the only sector to fall in January 2022, with a contraction of 1.5% driven by a 7.1% fall in sewerage.

Production was 2.0% below its pre-coronavirus (COVID-19) level (February 2020), with manufacturing as the main driver, sitting 1.6% below the pre-coronavirus level. Water supply and sewerage remains the only production sector above the pre-coronavirus level (7.3%).

Overall, production increased by 0.4% in the three months to January 2022, with growths of 0.8% in manufacturing, 1.0% in electricity, gas, steam and air conditioning supply, and 2.6% in water supply and sewerage. This was partially offset by a decrease of 8.3% in mining and quarrying. More detailed breakdowns on production are available in the Index of Production, UK: January 2022.

Construction output increased 1.1% in January 2022 following an increase of 2.0% in December 2021. This is the third consecutive monthly growth greater than 1.0%.

Construction output was 1.4% above its pre-coronavirus (COVID-19) pandemic level (February 2020) in January 2022 (Figure 7). The level of construction output in January 2022 is at its highest level since September 2019.

The increase in monthly construction output in January 2022 was driven solely from an increase in repair and maintenance (4.6%) while new work saw a decline, decreasing 0.8%.

At the sector level, the main contributors were private housing repair and maintenance and non-housing repair and maintenance, which grew by 5.5% and 5.0% respectively.

Anecdotal evidence received from both returns received for the Monthly Business Survey for Construction and Allied Trades and the Business Insights and Conditions Survey (BICS) suggested some of the issues in sourcing construction products in the latter half of 2021 had continued to ease. Along with the easing of supply chain constraints, new orders in the construction industry continued to perform strongly, growing by 9.2% in Quarter 4 (Oct to Dec) 2021 compared with Quarter 3 (July to Sept) 2021 with all sectors recovering to above their pre-coronavirus level.

Construction output rose by 3.0% in the three months to January 2022 compared with the previous three months (August to October 2021). This is the strongest growth in the three-month on three-month series since June 2021 (3.4%).

Increases in both new work and repair and maintenance (4.0% and 1.4% respectively) contributed to the growth. At the type of work level, seven of the nine sectors saw an increase, with the largest contributions coming from infrastructure and private new housing (5.2% and 3.4%).

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

There were some common themes that were anecdotally reported to have played a part in performance across different industries, however, it is often difficult to quantify these effects.

Some businesses reported that coronavirus (COVID-19) restrictions had made trading conditions difficult, and that illness related to COVID-19 had caused staff absence, which had also affected turnover.

Businesses also reported that the cost of inputs had increased significantly, with pressures because of the cost of electricity and fuel being cited often. Some businesses also referenced that the cost of labour was an issue for them.

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.

This release captures the direct effects of the coronavirus (COVID-19) pandemic and the government measures taken to reduce transmission of the virus.

Early in the pandemic, we faced some challenges in receiving timely responses to the Monthly Business Survey (MBS) as businesses adapted to new conditions. Further information on measuring the data across our main data sources is available in the following releases:

• Construction output in Great Britain: January 2022

• Index of Production, UK: January 2022

• Index of Services, UK: January 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 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 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.

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. The ONS is monitoring the data and will seek to implement any resulting changes into the national accounts as soon as possible.

The next monthly GDP release on 11 April 2022 will see revisions to the periods January 2020 to January 2022 in line with the National Accounts Revision Policy. These revisions will be consistent with the quarterly national accounts release published on 31 March, which will cover the period from Quarter 1 (Jan to Mar) 2020 to Quarter 4 (Oct to Dec) 2021.

This release gives data for January 2022 for the first time and there are no revisions in this release.

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

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.

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. Such comparisons and growth rates can nonetheless be found in our accompanying dataset.

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 comprised 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 coronavirus pandemic. It is clear that the contraction in GDP in Quarter 2 (Apr to June) 2020 was the largest recession on record.