GDP monthly estimate, UK: September 2022

• Gross domestic product (GDP) is estimated to have fallen by 0.6% in September 2022, after a fall of 0.1% in August 2022 (revised from a fall of 0.3% in our previous publication) driven by a fall in the services sector.

• Looking at the quarterly picture, GDP fell by 0.2% in the three months to September 2022 compared with the three months to June 2022.

• Services fell by 0.8% in September 2022 after growth of 0.1% in August 2022 (revised from a fall of 0.1% in our previous publication); the largest contribution to the fall came from a 3.2% fall in information and communication activity, and a 2.0% fall in wholesale and retail trade, and repair of motor vehicles and motorcycles.

• Output in consumer-facing services fell by 1.7% in September 2022, after a fall of 1.6% in August 2022 (revised from a fall of 1.8% in our previous publication).

• Production grew by 0.2% in September 2022, after a fall of 1.4% in August 2022 (revised from a 1.8% fall in our previous publication); electricity, gas, steam and air conditioning supply grew by 1.5% and was the largest contributor to growth in production in September 2022.

• Construction grew by 0.4% in September 2022, after growth of 0.6% in August 2022 (revised from growth of 0.4% in our previous publication); the monthly increase came from increases in both new work (0.6%), and repair and maintenance (0.2%).

Monthly real gross domestic product (GDP) is estimated to have fallen by 0.6% in September 2022 (Figure 1) following a fall of 0.1% in August 2022 (revised up from a fall of 0.3% in our previous publication). It is now estimated to be 0.2% below its pre-coronavirus (COVID-19) levels (February 2020).

There was an additional bank holiday on 19 September 2022 for the State Funeral of Her Majesty Queen Elizabeth II and many businesses closed or operated differently on this day. As this was a one-off event, its impact does not get removed from our seasonally adjusted estimates. This should be considered when interpreting the seasonally adjusted movements in September 2022. Unlike normal bank holidays, there was not a shift to leisure and tourism activities because of the widespread nature of business closures. Therefore, while it is very difficult to separate the bank holiday impact from other factors affecting the economy, we estimate that at least half of this month's fall in GDP is because of this bank holiday. More information on our seasonal adjustment approach is available in Section 10: Measuring the data.

The service sector fell by 0.8% in September 2022 and was the main driver of the fall in GDP. Production rose by 0.2% in September 2022 and construction grew by 0.4%, its third consecutive increase after growth of 0.6% in August 2022 and 0.2% in July 2022 (Figure 2).

Looking more broadly, GDP fell by 0.2% in the three months to September 2022 compared with the three months to June 2022 with a 1.5% fall in production, a 0.6% rise in construction and flat growth in services. These figures are consistent with the quarterly output measure within the latest GDP first quarterly estimate, UK: July to September 2022 bulletin.

Monthly GDP grew 1.3% in September 2022 compared with the same month last year down from 2.5% in August 2022 versus August 2021 (revised from 2.0% in our previous publication).

Services fell by 0.8% in September 2022, following growth of 0.1% in August 2022 (revised up from a 0.1% fall in our previous publication). Figure 3 shows the contributions from the services sector to gross domestic product (GDP) in September 2022.

Information and communication fell by 3.2% in September 2022 and was the biggest contributor to the fall in services on the month. Computer programming, consultancy and related activities fell by 3.9% in September 2022. It was the main driver of the fall in information and communication, followed closely by motion picture, video & tv programme production, sound recording and music publishing activities, which fell by 18.0%.

The second-largest negative contribution within services came from wholesale and retail trade; repair of motor vehicles and motorcycles, which fell by 2.0% in September 2022. All three industries contributed negatively. Wholesale and retail trade, and repair of motor vehicles and motorcycles fell by 3.3%, with the Society of Motor Manufacturers and Traders (SMMT) September 2022 reporting new registrations were only 4.6% above last September, which was the weakest since 1998. Wholesale and retail trade, except motor vehicles and motorcycles, fell by 2.2% and 1.4%, respectively.

These falls were partially offset by a rise in human health and social work activities, which grew by 0.9% in September 2022. The growth in this sub-sector was entirely driven by human health activities industry, which grew by 1.5% on the month. There were rises in GPs and critical care volumes in the month, as well as the first growth in the NHS Test and Trace and Vaccine programme since March 2022.

NHS Test and Trace services and vaccine programmes

NHS Test and Trace and COVID-19 vaccination programme activity grew by 71% in September 2022 (Figure 4). This was driven by an increase in vaccine activity because of the autumn booster campaign, partially offset by a fall in testing volumes. Despite this growth on the month, levels remain significantly below the highs seen at the end of 2021 as shown in Figure 4. More specifically in September 2022:

• testing volumes fell by 58% from August 2022; laboratory-processed testing and lateral flow devise (LFD) testing volumes both fell strongly and so both contributed to this fall
• tracing volumes fell to zero in March 2022 for England and remain there; all contact tracing within the UK stopped as of June 2022
• vaccine volumes grew by 251% in September 2022, this growth was driven by the autumn booster programme

Overall, NHS Test and Trace and the COVID-19 vaccination programme contributed 0.1 percentage points to 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 the accompanying dataset.

Consumer-facing services

Output in consumer-facing services fell by 1.7% in September 2022, following a fall of 1.6% in August 2022 (revised up from 1.8% in previous publication). Consumer-facing services were 10.0% below their pre-coronavirus (COVID-19) levels (February 2020) in September 2022, while all other services were 1.9% above (Figure 4).

The largest negative contributing industry was retail trade, except for motor vehicles and motorcycles, which fell by 1.4% in the month. This follows a contraction of 1.7% in August 2022 (revised down from negative 1.6% in previous publication) and this industry has now fallen 10 times in the last 11 months. Our Retail sales, Great Britain: September 2022 bulletin notes that retailers continue to mention the effect of rising prices and the cost of living on sales volumes, data for September 2022 are also affected by the bank holiday for the State Funeral of Her Majesty Queen Elizabeth II, when many retailers closed.

The second-largest contributor to the fall in consumer-facing services was buying and selling, renting and operating of own or leased real estate, excluding imputed rent, which fell by 0.9% in September 2022.

Overall, services remained at the same level in the three months to September 2022 compared with the three months to June 2022, with negative growth seen in 7 of the 14 services sectors offset by positive contributions in the other seven services sectors.

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

Production output grew by 0.2% in September 2022, with positive growth in three of the four sub-sectors. This is the sector’s first growth since May 2022.

Electricity, gas, steam and air conditioning supply was the main driver of production growth, rising by 1.5% on the month. Electric power generation, transmission and distribution saw growth of 4.4%, the largest since December 2020. According to anecdotal evidence from the Department for Business, Energy and Industrial Strategy (BEIS) demand was up 10.6% in September 2022 from August 2022, also noting that the number of heating days in September 2022 was 1.7 compared to 0.6 in September 2021. Manufacture of gas, distribution of gaseous fuels through mains, and steam and aircon supply saw a notable fall of 3.6%, though not enough to offset growth in electric power generation, transmission, and distribution.

Mining and quarrying was the second-largest contributor to positive production growth in September 2022, growing by 0.7%. This was wholly driven by extraction of crude petroleum and natural gas, which increased by 1.0% on the month.

Manufacturing was broadly flat on the month (Figure 6) with the largest negative contributor, manufacture of basic metals and metal products, falling by 3.4%. Notable falls were also seen in the manufacture of chemicals and chemical products (down 3.0%) and manufacturing of computer, electronic & optical products (down 2.7%).

The largest positive contributors to manufacturing were the manufacture of basic pharmaceutical products and pharmaceutical preparations, which saw growth of 9.3% in September 2022. Also contributing positively was manufacture of transport equipment, which rose by 2.7% on the month, Society of Motor Manufacturers and Traders (SMMT) September 2022 comments on the strongest September for commercial vehicle production since September 2011.

Water supply and sewerage fell by 0.3% in September 2022, with a growth in sewerage of 3.5% cancelled out by 2.4% fall in water collection, treatment and supply.

Overall, production decreased by 1.5% in the three months to September 2022, compared with the three months to June 2022, driven primarily by manufacturing, which fell by 2.3%. There has been a downward trend in manufacturing, since its last three-month on three-month growth in July 2021. There were also declines in mining and quarrying, and water supply and sewerage, which fell by 1.0% and 1.4%, respectively. Electricity, gas, steam and air conditioning supply was the only sector that saw growth, up by 2.6% over the same period.

More detailed breakdowns on production are available in the Index of Production, UK: September 2022.

Monthly construction output increased by 0.4% in September 2022. This is the third consecutive monthly growth following the small, upwardly revised increases to 0.6% and 0.2% in August 2022 and July 2022, respectively.

The 0.4% growth in construction output in September 2022 represents an increase of £66 million in monetary terms compared with August 2022, with five out of the nine sectors seeing an increase on the month.

The increase came from rises in both new work (0.6%), and repair and maintenance (0.2%) on the month (Figure 7). At the sector level, the main contributors were infrastructure, and public housing repair and maintenance, which increased 2.8% and 11.3%, respectively.

Anecdotal evidence gathered from businesses over the month to the Monthly Business Survey for Construction and Allied Trades suggested there has been increased narrative around the cost of living crisis. This is as it continues to be a major factor as businesses and households are spending particularly less on repair and maintenance work. Many firms suggested that the high prices for construction materials meant some repair and maintenance projects were being put on hold (whether temporarily or permanently). In contrast, some new projects were continuing as costings were agreed prior to the recent price increases, and as such the construction firms were having to absorb these.

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: September 2022, new orders and Construction Output Price Indices, July to September 2022 bulletin.

There were some common themes that were anecdotally reported (as part of the Monthly Business Survey) to have played a part in performance across different industries. However, it is often difficult to quantify these effects.

Some businesses reported challenging conditions, with the price of energy and the price of fuel continuing to be cited as particular difficulties. Others reported an impact on their turnover following industrial action with strikes being carried out across various sectors. Many businesses also reported currency exchange as an issue that affected them, with a weaker pound making it less affordable to import inputs. Finally, many businesses reported that the additional bank holiday led to a drop in their turnover because there were fewer trading days in the month.

This release gives data for September 2022 for the first time. It also gives revisions to July and August 2022 consistent with GDP first quarterly estimate, UK: July to September 2022 released on the same day. Table 2 shows the revisions to monthly gross domestic product (GDP) and its sectors for July to August 2022, since the last monthly publication on 12 October 2022.

Notes:

1. Revisions are rounded to one decimal place and calculated based on the one decimal place indexes.

2. Further information on current and past revisions can be found in our Revision Triangles dataset.

A number of factors have contributed towards the upwards revisions. Within services we have revised non-market data for public administration, education and health upwards as a result of previous forecasts being replaced with business returns. In production, some of our volume estimates from the Department for Business, Energy and Industrial Strategy (BEIS) have been revised up. Across both services and production we have also seen some revisions resulting from later survey data and the latest seasonally adjusted estimates.

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 the Glossary of economic terms.

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

• Construction output in Great Britain: September 2022, new orders and Construction Output Price Indices, July to September 2022
• Index of Production, UK: September 2022
• Index of Services, UK: September 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-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 for where the economy is relative to its pre-coronavirus 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.

We are 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 additional bank holiday led to one fewer working day in September 2022. Therefore, this should be considered when interpreting the movements involving September 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. For more information, see our Guide to interpreting monthly gross domestic product methodology.

As part of our usual seasonal adjustment practice, prior adjustments are made for calendar effects (where statistically significant), such as 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 the effect of extreme weather or one-off quantifiable events.

The additional bank holiday in September 2022 is not regular, so there is 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 does 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 2022.

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