- UK gross domestic product (GDP) was estimated to have increased by 0.3% in Quarter 1 (Jan to Mar) 2017, the slowest rate of growth since Quarter 1 2016.
- Slower growth in Quarter 1 2017 was mainly due to services, which grew by 0.3% compared with growth of 0.8% in Quarter 4 (Oct to Dec) 2016.
- In Quarter 1 2017 there were falls in several important consumer-focused industries, such as retail sales and accommodation; this was due in part to prices increasing more than spending.
- Production, construction and agriculture grew by 0.3%, 0.2% and 0.3% respectively in Quarter 1 2017.
- GDP per head was estimated to have increased by 0.1% during Quarter 1 2017.
This is the second Preliminary GDP bulletin released as part of the new economic theme days. As such this bulletin now follows a more streamlined format and some tables such as revisions, previously found in the background notes, can now be found in the main datasets.
Monthly economic commentary has been published alongside this release, presenting new analysis on the latest economic data.
We welcome your feedback on this new style bulletin via our short survey.Nôl i'r tabl cynnwys
Change in GDP is the main indicator of economic growth. The preliminary estimate of GDP is based solely on the output approach to measuring GDP.
The output approach measures gross value added (GVA) at a detailed industry level before aggregating to produce an estimate for the whole economy. GDP (as measured by the output approach) can then be calculated by adding taxes and subtracting subsidies (both only available at whole economy level) to this estimate of total GVA. However, as there is no information available on taxes and subsidies at this stage, the quarterly growth for output GVA is taken as a proxy for GDP growth (more information on creating the preliminary estimate of GDP is available on the methods and sources page of our website).
The preliminary estimate is the first of three estimates of GDP published by the Office for National Statistics, followed by the second estimate and the quarterly national accounts. In the second estimate of GDP and the quarterly national accounts, the output GVA and GDP estimates are balanced with the equivalent income and expenditure approaches to produce headline estimates of GVA and GDP. Further information on all three approaches to measuring GDP can be found in the national accounts.
All data in this bulletin are seasonally adjusted, chained volume estimates and have had the effect of price changes removed (in other words, the data are deflated).
The growth estimates within this release are created from short-term measures of output and should be considered alongside medium and long-term patterns in the series to give a more comprehensive picture. At this stage, data content is less than half of the total required for the final output estimate. The estimate is subject to revision as more data become available, but these revisions are typically small between the preliminary and third estimates of GDP, with no upward or downward bias to these revisions. More information on the data content and the monthly path of the components of the output measure of GDP are included in section 6.
In accordance with National Accounts Revisions Policy, there are no periods open for revision in this release.Nôl i'r tabl cynnwys
Table 1: GDP main figures, UK, Quarter 1 (Jan to Mar) 2017
|Most recent||Most recent|
|Weights per||quarter on a||quarter on the|
|Description||1000||year earlier||previous quarter|
|GDP per head||…||1.4||0.1|
|Source: Office for National Statistics|
|1. Components may not sum due to rounding.|
|2. Manufacturing is a component of the production aggregate.|
|3. No data represented by …|
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Figure 1 shows the seasonally adjusted volume series for GDP, along with quarter-on-quarter growths, over the past decade. Following growth of 0.3% in Quarter 1 2017, GDP has grown for 17 consecutive quarters.
Figure 2 shows the average compound quarterly growth rate experienced over the 5 years prior to the economic downturn in 2008 to 2009, the average compound quarterly growth rate experienced between Quarter 3 (July to Sept) 2009 and Quarter 2 (Apr to June) 2014 (5 years following the downturn), and the current quarterly growth rate observed in the most recent period (Quarter 1 2017). Compound average growth is the rate at which a series would have increased or decreased if it had grown or fallen at a steady rate over a number of periods. This allows the composition of growth in the recent economic recovery to be compared with the long run average.
The UK experienced slightly slower average compound GDP growth in the 5 years following the economic downturn compared with the 5 years prior: this is also true of the services industry. Figure 2 shows that in Quarter 1 2017, total GDP, construction and services were weaker than their post-downturn average.
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In Quarter 1 (Jan to Mar) 2017, UK GDP was estimated to have increased by 0.3%. The services aggregate was the main driver to the slower growth in GDP, contributing 0.23 percentage points. Production, construction and agriculture contributed 0.04, 0.01 and 0.00 percentage points to the headline figure respectively.
Services grew by 0.3% in Quarter 1 2017, compared with growth of 0.8% in Quarter 4 (Oct to Dec) 2016. Within the services aggregate, two of the four main sectors decreased in Quarter 1 2017.
The main contributor to the slowdown in services was the distribution, hotels and restaurants sector, which decreased by 0.5%, contributing negative 0.07 percentage points to quarter-on-quarter GDP growth. Retail trade and accommodation services were the main contributors to the negative growth in this sector. These industries were impacted by increases in prices, as reported in the latest Retail Sales and Consumer Price Inflation publications. These falls were partially offset by an increase in food and beverage service activities, which grew by 2.7%.
The transport, storage and communications industries decreased by 0.2% in Quarter 1 2017. The main drivers to the fall in this sector were publishing activities, telecommunications and computer programming activities.
However, the negative growths in these two sectors were more than offset by positive growths in the government and other services and business services and finance sectors.
Government and other services grew by 0.5%, with human health activities and education being significant contributors, reflecting their large weights within GDP.
Business services and finance grew by 0.7%, with accounting activities and travel agency activities both performing strongly in this quarter.
Many of the significant negative contributions in the services industries in Quarter 1 2017 came from consumer-focused industries, such as retail trade; accommodation; and the trade and repair of motor vehicles, which all decreased when compared with the previous quarter.
Within the production aggregate: manufacturing increased by 0.5% in Quarter 1 2017, due mainly to a large rise in the manufacture of motor vehicles industry; mining and quarrying increased by 1.3%; and water supply, sewerage, waste management and remediation activities increased by 0.5%.
However, these positive growths were partially offset by a 3.2% decrease in electricity, gas, steam and air conditioning supply. This followed a growth of 4.0% in Quarter 4 2016.
Construction output was estimated to have increased by 0.2% during Quarter 1 2017, following a growth of 1.0% during Quarter 4 2016.
Agriculture output was estimated to have increased by 0.3% in Quarter 1 2017, following a growth of 1.0% in Quarter 4 2016. Agriculture is the smallest of the main industrial groups with a weight of less than 1% in the output measure of GDP.Nôl i'r tabl cynnwys
Figure 4 contains information about the data content for each month in Quarter 1 2017 and Quarter 1 2017 as a whole. The data content for the Quarter 1 2017 preliminary estimate is 44% of total output data, which is broadly similar to previous preliminary estimates.
The approach to producing the preliminary GDP estimate uses monthly output data for January and February and forecasts for estimating March. The forecasts are reinforced by early responses to our Monthly Business Survey. More information on creating the preliminary estimate of GDP is available on the methods and sources page.
The Index of Production, construction output and Index of Services all feed into the headline GDP estimate. Some small revisions have taken place to previously published estimates, as seen in Table 2. Additional detail for sectors with production and services can be found in the Monthly Path dataset, published alongside this bulletin.
Table 2: Previously published and current monthly growth rates in Production, Construction and Services
|Index of production||-0.3||-0.7||-0.4||-0.8||-0.7|
|Index of services||-0.1||…||-0.1||0.2||0.0|
|Source: Office for National Statistics|
|1. Based on forecasts and early responses to the March Monthly Business Survey|
|2. No Data represented by …|
|3. Percentage change|
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Some general information on the quality of the estimate of GDP can be found in the Things you need to know about this release section in the main part of this statistical bulletin. Further information is available on the methods and sources page of our website.
The GDP Quality and Methodology Information document contains important information on:
- the strengths and limitations of the data
- the quality of the output: including the accuracy of the data and how it compares with related data
- uses and users
- how the output was created
The national accounts provide an integrated description of all economic activity within the economic territory of the UK, including activity involving both domestic units (that is, individuals and institutions resident in the UK) and external units (those resident in other countries). In addition to being comprehensive, the accounts are fully integrated and internally consistent. More information can be found in the UK National Accounts: A Short Guide.Nôl i'r tabl cynnwys