GDP monthly estimate, UK: March 2019

Gross domestic product (GDP) measures the value of goods and services produced in the UK. It estimates the size of and growth in the economy.

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Dyddiad y datganiad:
10 May 2019

Cyhoeddiad nesaf:
10 June 2019

1. UK gross domestic product (GDP) grew by 0.5% in the three months to March 2019

GDP increased by 0.5% in Quarter 1 (Jan to Mar) 2019, up from the 0.2% increase in Quarter 4 (Oct to Dec) 2018. The strength in quarterly growth is in part due to the low December monthly growth in the base period, which makes the current period look stronger in comparison.

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2. All main sectors contributed positively to GDP growth in Quarter 1 2019

The services sector was the largest contributor to quarterly GDP growth, increasing by 0.3% in Quarter 1 (Jan to Mar) 2019. The production and construction sectors also contributed positively, with growths of 1.4% and 1.0%, respectively. Within production, manufacturing growth was notably strong at 2.2%.

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3. Rolling three-month growth was 0.5% in the three months to March 2019

Rolling three-month growth was 0.5% in March 2019, picking up from lower growth rates through the end of 2018 and start of 2019.

Rolling three-month growth is based on output gross value added (GVA) and so there will be discrepancies in the time series with our quarterly estimates of GDP, which include information on the expenditure and income approaches to measuring GDP.

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4. GDP contracted by 0.1% in March 2019

Monthly GDP growth was negative 0.1% in March 2019, as the services and construction sectors contracted.

The monthly growth rate for GDP is volatile and so it should be used with caution and alongside other measures, such as the three-month growth rate, when looking for an indicator of the longer-term trend of the economy. However, it is useful in highlighting one-off changes that can be masked by three-month growth rates.

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5. The services sector grew by 0.3% in Quarter 1 2019

Figure 4 shows the decline in professional, scientific and technical activities rolling three-month growth in the past four months, after peaking in November 2018. However, the overall output for this industry still remains high.

Month-on-month growth in the services sector was negative 0.1% in March 2019. The largest negative contributor to this was the information and communication sector, driven by computer programming, which contracted by 2.3%. However, this is an industry that has performed strongly in the past year, with its overall output remaining high.

Quarterly growth in the services sector was 0.3%. The main drivers to this were retail trade and the information and communication sub-sector. However, professional, scientific and technical activities acted as a drag on GDP growth.

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6. Quarterly growth in the production sector was 1.4%

Figure 5 shows rolling three-month growth in production and manufacturing over the past year. Throughout 2018, growth varied within 1 percentage point. However, in the first three months of 2019, growth has increased; this is the strongest quarterly manufacturing growth since Quarter 3 (July to Sept) 1988, although these numbers are not entirely consistent over time due to changes in methods and definitions related to the treatment of stocks.

Monthly growths in production and manufacturing were 0.7% and 0.9%, respectively. This was the third positive monthly manufacturing growth in a row; the last time this occurred was between October and December 2017.

Rolling three-month growth in production was 1.4% in March 2019. Manufacturing growth was the highest in three decades, at 2.2% in the three months to March, driven by pharmaceuticals, food products and basic metals. Meanwhile, electricity contracted for the fifth month in a row, with growth of negative 2.3%.

The strong growth in manufacturing is consistent with an increase in activity ahead of the UK’s originally intended departure date from the European Union, but we were unable to quantify the effect of this.

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7. The construction sector grew by 1.0% in Quarter 1 2019

Figure 6 shows that, after peaking in Quarter 1 (Jan to Mar) 2017, quarter-on-quarter a year earlier growth declined until Quarter 1 2018. However, there has been a slight recovery in more recent periods.

Monthly growth in construction was negative 1.9% in March 2019, as both new work, and repair and maintenance declined.

Rolling three-month growth in construction was 1.0%, as the strong monthly growth in January 2019 boosted the three-month period. Rolling three-month growth in construction was driven by repair and maintenance.

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8. Growth in the expenditure approach to measuring GDP was 0.5% in Quarter 1 2019

Gross capital formation (GCF), government expenditure and household expenditure all contributed positively to growth of 0.5% in GDP in Quarter 1 (Jan to Mar) 2019. Within GCF, business investment had a small positive contribution to growth. However, there was a large negative contribution from net trade in Quarter 1 2019.

There have been some notable movements in non-monetary gold (NMG) in the first quarter, which explain the large and offsetting contributions to GDP growth from gross capital formation and net trade.

More information on the expenditure approach can be found in the GDP first quarterly estimate bulletin.

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9. Nominal GDP increased by 1.0% in Quarter 1 2019

Nominal GDP, or GDP in current prices, grew by 1.0% in Quarter 1 (Jan to Mar) 2019. The largest contributor to this growth was gross operating surplus of corporations, although compensation of employees and other income also had positive contributions.

Taxes on products and production less subsidies was the only component to contribute negatively to nominal growth in Quarter 1 2019.

More information on the income approach can be found in the GDP first quarterly estimate bulletin.

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10. Quality and methodology

The Gross domestic product (GDP) Quality and Methodology Information report contains important information on:

  • the strengths and limitations of the data and how it compares with related data
  • uses and users of the data
  • how the output was created
  • the quality of the output including the accuracy of the data
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Manylion cyswllt ar gyfer y Bwletin ystadegol

James Scruton
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