GDP Monthly Estimate UK - July 2023

13th September 2023

There are no revisions to previously published data in this monthly release because of the regular National Accounts revision policy. We will see the data revisions from our pre-announced changes highlighted in our Impact of Blue Book 2023 article in the Quarterly National Accounts release (to be published on 29 September), and also in the next monthly GDP release (published on 12 October).

For July 2023, monthly real gross domestic product (GDP) is estimated to have fallen by 0.5%, with falls in all three main sectors, following growth of 0.5% in June 2023.

Looking at the broader picture, GDP increased by 0.2% in the three months to July 2023, with growth in all three main sectors.

Services output was down 0.5% in July 2023, after growth of 0.2% in June 2023, and was the main contributor to the fall in GDP in July.

Output in consumer-facing services showed no growth in July 2023, following growth of 0.5% in June 2023.

Production output fell by 0.7% in July 2023, after growth of 1.8% in June 2023.

The construction sector fell by 0.5% in July 2023, after growth of 1.6% in June 2023.

All of the main sectors fell in July 2023. Output in services sector fell by 0.5% and was the largest contributor to the fall in monthly GDP; production output fell by 0.7% and construction output fell by 0.5%. This is the first month since June 2022 that all three sectors contributed negatively to GDP on the month.

Monthly GDP showed no growth in July 2023 compared with the same month last year. For comparison, monthly GDP grew by 0.9% between June 2022 and June 2023. The Platinum Jubilee in 2022, and the move 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 services sector
Services output fell by 0.5% in July 2023, following growth of 0.2% in June 2023. Overall, the services sector grew by 0.1% in the three months to July 2023 compared with the three months to April 2023. Figure 3 shows the monthly contributions from the services sector to gross domestic product (GDP) in July 2023.

The main contributor to the fall in monthly services output was the human health and social work activities sub-sector, which fell by 2.1% in July 2023. This was attributed entirely to a 3.4% fall in the human health activities industry. Industrial action was held in July by NHS senior doctors (two days) and radiographers (two days) for the first time while industrial action by junior doctors increased (five days in July, compared with three in June). NHS England reported that 65,557 appointments and procedures were cancelled because of the senior doctors strike and 101,977 acute inpatient and outpatient appointments were cancelled because of the industrial action by junior doctors.

The next largest contributor to the fall in services output in July 2023 was the 2.1% fall in information and communication, following on from three consecutive monthly growths in this sub-sector. Computer programming, consultancy and related activities was the largest contributing industry, falling by 3.4% in July after three consecutive monthly growths in April, May, and June 2023.

Administrative and support service activities also fell in July 2023, by 1.4%. The largest industry within this sub-sector was employment activities, which fell by 2.3% in July after a growth of 2.1% in June. This industry has had a decrease in monthly output in 9 of the last 12 months. Education also fell in July 2023, by 1.1%, where the sector saw two days of industrial action in England at the start of the month. Please note that education attendance is considered to be constant over the school year, so summer holidays and school leavers did not reduce the estimate of education output in July 2023.

The main offsetting positive contribution was from the arts, entertainment and recreation sub-sector, which grew by 6.6% in July 2023; this was its largest growth since May 2021. Sports activities and amusement and recreation activities grew by 12.4% and creative, arts and entertainment grew by 4.9%.

Consumer-facing services
Output in consumer-facing services showed no growth in July 2023, while all other services fell by 0.6%. The largest positive contributions to consumer-facing services in July 2023 came from the sports activities and amusement and recreation activities industry (up 12.4%) and wholesale and retail trade and repair of motor vehicles and motorcycles (up 2.2%).

The largest negative contributions came from retail trade, except of motor vehicles and motorcycles (down 1.2%) and travel agency, tour operator and other reservation service and related activities (down 3.2%).

On the three months to July, consumer-facing services have growth by 0.7%

The production sector
Production output fell by 0.7% in July 2023, following growth of 1.8% in June 2023 (Figure 4). The largest falling sub-sector was manufacturing, which fell by 0.8% in July 2023.

Overall, production output grew by 0.6% in the three months to July 2023, compared with the three months to April 2023. Manufacturing was also the main contributor to the three-month growth, where manufacturing output grew by 1.7% in the three months to July 2023.

Manufacturing's 0.8% fall was the main contributor to the monthly fall in production, with 9 of its 13 subsectors down on the month (Figure 5). This follows growth of 2.4% in June 2023, the strongest monthly growth since November 2020, where a number of businesses told us that output increased in June 2023 compared with May 2023 because of the additional bank holiday in May.

Manufacture of rubber and plastics products and other non-metallic mineral products was the largest contributor to the fall, down by 5.5%. This is followed by the manufacturing of computer, electronic and optical products, which was down 3.2% in July. The largest offsetting positive contribution within manufacturing came from manufacture of machinery and equipment not elsewhere classified (NEC), which grew by 2.8%.

Mining and quarrying was the only production sub-sector to see increased output in July 2023, growing by 1.9%, caused by growth of 2.9% in the extraction of crude petroleum and natural gas.

Electricity, gas, steam and air conditioning supply fell by 1.5% in July 2023, caused by a 2.5% fall in electric power generation, transmission and distribution.

Water supply and sewerage fell by 0.5%, mainly attributed to a 1.6% fall in water collection, treatment and supply.

The construction sector
Monthly construction output is estimated to have decreased 0.5% in volume terms in July 2023. This follows a 1.6% increase in June 2023, where businesses told us that extremely good weather and an additional working day, compared with May, because of the additional bank holiday for King Charles III coronation, had boosted output.

The decrease in monthly output came solely from a decrease in repair and maintenance (1.3% fall), with new work increasing (0.1%) on the month. Five out of the nine sectors saw a decrease on the month.

At the sector level, the main contributors to the monthly decrease were private housing repair and maintenance and private housing new work, which decreased by 3.9% and 2.2%, respectively.

Readthe full ONS report HERE