GDP monthly estimate, UK : October 2021

• Gross domestic product (GDP) is estimated to have grown by 0.1% in October 2021 and is 0.5% below its pre-coronavirus (COVID-19) pandemic level (February 2020).

• Services output grew by 0.4% in October 2021, with the most significant contribution coming from human health activities, which grew by 3.5%, mainly because of a continued rise in face-to-face appointments at GP surgeries in England.

• Services output overall has now reached its pre-coronavirus pandemic level (February 2020); consumer-facing services are 5.2% below their pre-pandemic levels, while all other services are 1.4% above.

• Output in consumer-facing services grew by 0.3% on the month mainly because of an 8.1% increase in the wholesale and retail trade and repair of motor vehicles and motorcycles sector, while all other services rose by 0.4%.

• Production output decreased by 0.6% in October 2021, with electricity and gas down by 2.9%, and mining and quarrying down by 5.0%.

• Construction contracted, with output down by 1.8% in October 2021, the largest fall since April 2020; the sector is now 2.8% below its pre-pandemic level.

Monthly real gross domestic product (GDP) slowed in October 2021, growing by 0.1% compared with 0.6% growth in September 2021.

Table 1 shows an increase in services output in October 2021 and falls in both production and construction. Overall, GDP remains 0.5% below its pre-coronavirus (COVID-19) pandemic level (February 2020) in October 2021, with services output reaching its pre-coronavirus pandemic level.

Overall, GDP grew by 0.9% in the three months to October 2021, mainly reflecting the strong performance of the services sector in September 2021. This growth largely reflects the gradual easing of coronavirus restrictions to varying degrees in England, Scotland and Wales, including the reopening of accommodation and food service activities and arts, entertainment and recreation services compared with the previous three months (May to July 2021).

Services output grew by 0.4% in October 2021 and has reached its pre-coronavirus (COVID-19) pandemic level (February 2020). This follows strong growth of 0.7% in September 2021.

Human health and social work activities grew by 2.6% in October 2021 and was the main contributor to October’s growth in services (Figure 3). Human health activities reached a record high level in October 2021, increasing by 3.5%, with growth from a continued rise in face-to-face appointments at GP surgeries in England. The NHS Test and Trace and vaccine programmes had a positive 0.1 percentage point impact on October’s gross domestic product (GDP) growth.

Administrative and support activities grew by 3.3% and was the second largest contributor to October’s growth in services. The main contributor to growth was employment activities (growing by 6.7%) particularly within temporary employment agency activities. Travel agency, tour operator and other reservation service and related activities also saw strong growth of 30.4% but remained 50.1% below its pre-coronavirus pandemic level.

Wholesale and retail trade grew by 1.4% and was the third largest contributor to October’s growth in services. Wholesale and retail trade and repair of motor vehicles and motorcycles was the main contributor to growth in this industry, growing by 8.1%. This follows a large fall of 13.3% in September 2021.

Downward contributions to services growth included a 5.5% fall in accommodation and food service activities, driven by a 7.5% fall in food and beverage service activities particularly within restaurants. Even with the fall, food and beverage service activities grew by 8.9% in the 3 months to October 2021, following strong growth in September 2021.

There was also a downward contribution from a 1.8% fall in professional, scientific and technical activities. Within this, falls were seen in scientific research and development (7.3%); architectural and engineering activities; technical testing and analysis (4.2%), accounting, bookkeeping and auditing activities; tax consultancy (3.7%) and in advertising and market research (2.2%).

Elsewhere, air transport continued to expand as coronavirus-related travel restrictions eased, growing by 26.6% in October 2021, but remaining 66.2% below its pre-pandemic level.

Consumer-facing services

Output in consumer-facing services grew by 0.3% in October 2021. This was mainly driven by an 8.1% increase in the wholesale and retail trade and repair of motor vehicles and motorcycles, and a 30.4% increase in travel agency, tour operator and other reservation service and related activities. These increases were partially offset by a fall in food and beverage service activities (down by 7.5%).

Consumer-facing services are 5.2% below their pre-pandemic levels (February 2020) in October 2021, while all other services are 1.4% above them.

Overall, services grew by 1.1% in the three months to October 2021, mainly reflecting the gradual reopening of accommodation and food service activities and arts, entertainment and recreation services compared with the previous three months (May to July 2021).

More detailed breakdowns on services are available in the Index of Services, UK: October 2021.

NHS Test and Trace services and vaccine programmes

Coverage adjustments have been applied to the volume data to estimate the impact on GDP from the NHS Test and Trace services and COVID-19 vaccine programmes, by incorporating new cost-weighted activity indicators.

The NHS Test and Trace adjustment for October 2021 was £1,300 million, down from £1,400 million in September as the number of coronavirus tests fell by approximately 10%. The vaccine programme’s adjustment for October 2021 was £500 million, up from £200 million in September as the number of coronavirus vaccinations increased by approximately 130%. October 2021 was the first full month when the NHS delivered coronavirus booster jabs. Note that published adjustments are rounded to the nearest £100 million.

Overall, the total adjustment increased by £200 million in October 2021, to £1,800 million, and had a positive 0.1 percentage point impact on GDP growth.

For further information on the methodology behind these adjustments, please refer to Measuring the economic output of COVID-19 testing, tracing and vaccinations and a full record of Health volume adjustments and their contribution to GDP growth can be found in the accompanying dataset.

Production output decreased by 0.6% in October 2021, with water supply the only sector showing growth (Figure 5).

Mining and quarrying fell by 5.0% in October 2021 due to planned maintenance of oil fields taking place earlier in the summer this year, with extraction of crude petroleum and natural gas falling for the second consecutive month.

Electricity, gas, steam and air conditioning supply fell by 2.9% in October 2021. The distribution of gas fell for the fifth consecutive month, following exceptionally high levels in May 2021 (the highest since December 2001), mainly resulting from adverse weather conditions boosting demand for energy.

Manufacturing remained flat in October 2021. Water supply was the only sector to increase in October 2021, by 0.6%.

Overall, production grew by 0.5% in the three months to October 2021, with a 25.5% growth in mining and quarrying and a 0.7% increase in water supply. These increases were partially offset by a fall of 6.2% in electricity, gas, steam and air conditioning supply and a fall of 0.1% in manufacturing.

More detailed breakdowns on production are available in Index of Production, UK: October 2021.

Construction output decreased by 1.8% in October 2021 following an increase of 1.3% in September 2021. This is the largest fall seen in construction since April 2020.

The decline in monthly construction output in October 2021 was driven by a decrease in new work (2.8%) with repair and maintenance remaining flat this month (0.0%). At the sector level, the main contributors were infrastructure and private new housing which decreased by 7.1% and 4.4% respectively. These decreases were partially offset by increases in private industrial and public other new work by 8.8% and 7.0% respectively.

Construction output peaked at 0.9% above its pre-coronavirus (COVID-19) pandemic level in April 2021 but as of October 2021 is now 2.8% below its pre-pandemic level (Figure 6). This reflects recent challenges faced by the construction industry from rising input prices and delays to the availability of some construction products (notably steel, concrete, timber and glass) over recent months.

In line with the monthly fall, construction output fell by 1.2% in the three months to October 2021. This was because of a 1.5% fall in repair and maintenance, mainly because of a 3.5% fall in non-housing repair and maintenance. It was also because of a fall of 1.0% in new work, with housing (both public and private), public other new work, and private commercial new work all falling.

Further detail on the contributions to construction growth can be found in Construction output in Great Britain: October 2021.

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.

Supply chain

Previously, in Coronavirus and the impact on output in the UK economy and the September 2021 GDP monthly estimate, we reported that some businesses involved in the wholesale and retail of new and used cars were reporting supply issues.

In October, car retailers reported supply issues as a result of the ongoing semi-conductor shortage. The supply chain issue initially caused by the semi-conductor shortage is now affecting other industries. For example, renting and leasing activities, which has seen a decrease in new car leases and lease renewals that would be typical of this time of year as a result of limited availability and price increases. A report published by the Society of Motor Manufacturers and Traders states that new car registrations in October 2021 fell by 24.6% on last year, the weakest October since 1991.

Other industries have also reported difficulties in sourcing supplies which have led to them producing less, even though orders have increased. These industries include the manufacture of machinery and equipment and the manufacture of rubber and plastic products.

Food and beverage service activities

Food and beverage service activities saw strong growth in September 2021, with a rise of 3.8% between August and September 2021, where output was 5.8% above its February 2020 level. The growth was driven by restaurants and take away food shops in September which fell back to normal levels in October.

Employment activities

In October 2021, employment activities increased by 6.7% when compared with September 2021. Anecdotal evidence suggests that there were increases in temporary staff from schools and short-term contracts to cover the Christmas period and coronavirus (COVID-19) outbreaks.

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. In recent months, response rates have improved and further information on measuring the data across our main data sources is available in the following releases:

• Construction output in Great Britain: October 2021
• Index of Services, UK: October 2021
• Index of Production, UK: October 2021

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-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.

The UK National Accounts, The Blue Book: 2021 was published on 29 October 2021 introducing various improvements to how we produce volume estimates of GDP, and these changes were enacted for the first time in the GDP monthly release published on 13 October 2021.

Note that estimates for the construction industry from this new approach (double deflation) 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.

The next monthly GDP release on 14 January 2022 will see revisions to the periods January 2020 to September 2021 in line with the National Accounts Revision Policy. These revisions will be consistent with the Quarterly National Accounts release published on 22 December, which will cover the period from Quarter 1 (Jan to Mar) 2020 to Quarter 3 (July to Sept) 2021.

Consultation on the Code of Practice for Statistics

On behalf of the UK Statistics Authority, the Office for Statistics Regulation (OSR) is conducting a consultation on the Code of Practice for Statistics, proposing changes to the 9:30am release practice. Please send comments by 21 December 2021 to regulation@statistics.gov.uk.

Update to the System of National Accounts

As part of an update to the System of National Accounts, the United Nations (UN) are in the process of consulting on several areas being considered for improvement. Previous and live consultations can be found on the UN Statistics Division website. If you would like to discuss any of these consultations with the Office for National Statistics (ONS), please contact us at sna.consultations@ons.gov.uk. Bodies outside the UK National Statistical System are also free to respond to the consultations themselves.

Economic statistics governance after EU exit

Following the UK’s exit from the EU, new governance arrangements are being put in place that will support the adoption and implementation of high-quality standards for UK economic statistics. These governance arrangements will promote international comparability and add to the credibility and independence of the UK’s statistical system.

At the centre of this new governance framework will be the new National Statistician’s Committee for Advice on Standards for Economic Statistics (NSCASE). NSCASE will support the UK by ensuring its processes for influencing and adopting international statistical standards are world-leading. The advice NSCASE provides to the National Statistician will span the full range of economic statistics, including the National Accounts, fiscal statistics, prices, trade and the balance of payments and labour market statistics.

Further information about NSCASE is available.

This release gives data for October 2021 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 GDP

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. Our latest estimates show that the UK economy is now 0.5% 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.