GDP Edge Up In UK

11th August 2023

Monthly real gross domestic (GDP) is estimated to have grown by 0.5% in June 2023, following a fall of 0.1% in May 2023 and growth of 0.2% in April 2023, both unrevised from the previous publication.

A range of businesses cited the additional bank holiday in May as a reason for increased output in June 2023 compared with May 2023.

Looking at the broader picture, GDP has shown 0.2% growth in the three months to June 2023.

Production output grew by 1.8% in June 2023 after a fall of 0.6% in May 2023, unrevised from the previous publication; this sector was the main contributor to the growth in monthly GDP in June.

The construction sector grew by 1.6% in June 2023, following a fall of 0.3% in May 2023, revised down from a fall of 0.2% in the previous publication.

Services output was up 0.2% in June 2023, after showing no growth in May 2023, unrevised from the previous publication; output in consumer-facing services grew by 0.5% in June 2023, following an unrevised fall of 0.2% in May 2023.

Revisions for the periods April and May 2023 are included in this publication.

Monthly real gross domestic product (GDP) is estimated to have grown by 0.5% in June 2023 (Figure 1) following an unrevised fall of 0.1% in May 2023. Monthly GDP is now estimated to be 0.8% above its pre-coronavirus (COVID-19) levels (February 2020). A range of businesses cited the additional bank holiday in May as a reason for increased output in June compared with May.

Output growth in the services sector was 0.2% in June 2023 while production and construction output grew by 1.8% and 1.6% respectively. It is the first month since October 2022 that all 3 sectors contributed positively to GDP on the month.

Monthly GDP grew by 0.9% in June 2023 compared with the same month last year. For comparison, monthly GDP fell by 0.3% between May 2022 and May 2023. The Platinum Jubilee in 2022, and the movement of the May bank holiday, led to an additional working day in May 2022 and two fewer working days in June 2022. It should also be noted that May 2023, saw one fewer working day as there was an additional bank holiday for the coronation of King Charles III. This should be considered when interpreting seasonally adjusted movements involving these months.

Monthly GDP grew by 0.9% in June 2023 compared with the same month last year. For comparison, monthly GDP fell by 0.3% between May 2022 and May 2023. The Platinum Jubilee in 2022, and the movement of the May bank holiday, led to an additional working day in May 2022 and two fewer working days in June 2022. It should also be noted that May 2023, saw one fewer working day as there was an additional bank holiday for the coronation of King Charles III. This should be considered when interpreting seasonally adjusted movements involving these months.

The main contributor to services growth in June 2023 was information and communication, which grew by 1.3% in June 2023, following growth of 1.3% and 0.1% in April and May 2023. Five out of the six industries within this subsector saw growth on the month, with publishing activities, which includes publishing of books, newspapers, and software, having the largest contribution, growing 9.0% in June 2023.

The second largest contribution within services came from wholesale and retail trade; repair of motor vehicles and motorcycles, which grew 0.8% in June 2023, mainly caused by wholesale and retail trade and repair of motor vehicles and motorcycles, which grew 3.9%. Society of Motor Manufacturers and Traders (SMMT) reported a 25.6% increase in new car registrations compared with the same month a year ago. Retail trade, except motor vehicles and motor cycles also contributed to the growth in June 2023, our latest Retail sales, Great Britain: June 2023 bulletin estimates that retail sales volumes grew by 0.7% in June 2023.

There was also increased output from accommodation and food services, which grew 1.5% in June 2023, following a fall of 1.5% in May 2023. The largest contributor was food and beverage services, which grew by 1.4%. There was anecdotal evidence from the monthly business survey that suggested good weather and an increase in live events boosted turnover for business in June.

These increases were partially offset by falls in human health and social work activities, which fell by 0.8% following growth in May 2023 (2.0%), driven largely by a fall of 1.1% in human health activities. There were four days of industrial action by junior doctors in June 2023, compared with none in May 2023, while there was no industrial action by nurses in England in June, compared with two days in May.

NHS Test and Trace and COVID-19 vaccination programme activity, as described in our Measuring the economic output of COVID-19 testing, tracing and vaccinations: April 2020 to June 2021 methodology, fell by 57% in June 2023 after a rise of 20% in May 2023, but remains substantially lower than at its peak towards the end of 2021. 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 our accompanying dataset.

Consumer-facing services
Output in consumer-facing services grew by 0.5% in June 2023, after a fall of 0.2% in May 2023. Looking at the broader picture, consumer-facing services grew by 0.8% in the three months to June 2023. Consumer-facing services were 8.2% below their pre-coronavirus (COVID-19) levels (February 2020) in June 2023, while all other services were 2.2% above (Figure 4).

The largest contribution to the growth in consumer-facing services in June 2023 came from wholesale and retail trade and repair of motor vehicles and motorcycles, which grew by 3.9% in June following a fall of 1.9% in May 2023.

The next largest contribution came from food and beverage services, which grew 1.4% in June 2023, with some businesses noting, on monthly business survey returns, that good weather was responsible for increased turnover.

Read the full report HERE