GDP monthly estimate, UK: April 2019

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Commenting on today’s GDP figures, Head of GDP Rob Kent-Smith said:

More information on the fall in car manufacturing can be found in Section 5.

The rolling three-month growth of 0.3% in April 2019 may appear inconsistent with the month-on-month growths of negative 0.1% in March and negative 0.4% in April. However, the monthly indices in Figure 2 show that high growth into February 2019 raised output significantly above the level of output seen in the months November 2018 to January 2019. Despite the declines in March and April, the average output of the current three months is still above that of the previous three months.

The services sector had a positive contribution to rolling three-month growth in April 2019, increasing by 0.2%. The production sector increased by 0.7%, within which manufacturing grew by 1.2%, making it the second-largest contributor to rolling three-month growth. Construction also had a positive contribution, growing by 0.4% in the three months to April 2019.

Rolling three-month growth was 0.3% in April 2019, down from 0.5% in March, but on par with growth rates at the start of 2019.

Rolling three-month growth is based on output gross value added (GVA) and so there will be discrepancies in the time series with our quarterly estimates of GDP, which include information on the expenditure and income approaches to measuring GDP.

Monthly GDP growth was negative 0.4% in April 2019, as the production sector and manufacturing sub-sector contracted.

The monthly growth rate for GDP is volatile and so it should be used with caution and alongside other measures, such as the three-month growth rate, when looking for an indicator of the longer-term trend of the economy. However, it is useful in highlighting one-off changes that can be masked by three-month growth rates.

Rolling three-month growth in the production sector was 0.7% in April 2019, while manufacturing increased by 1.2%. Within manufacturing, the two largest positive contributors to growth were manufacture of food products and pharmaceutical products. Monthly growth in production was negative 2.7% in April, driven by manufacturing, which contracted by 3.9%.

As seen in Figure 4, the most notable movement in April was the decline in manufacture of transport equipment. Output in this industry has been weak since October 2018 and contracted by 13.4% in April 2019. This pulled manufacturing and overall production output down, although the indices for these series were only slightly below the levels seen throughout the past 12 months.

The decline in transport equipment was due largely to a fall of 24.0% in car manufacturing, as firms planned shutdowns around the originally-intended departure date from the European Union. These data are consistent with that reported by the Society of Motor Manufacturers and Traders (SMMT), which found that car manufacturing was 44.5% lower in April 2019 than in April 2018. Manufacture of chemicals, pharmaceutical products and basic metals were also notably negative in April.

Strong growth in manufacturing in February and March 2019 was consistent with an increase in activity ahead of the UK’s originally-intended departure date from the European Union. The weaker picture in April 2019 was in line with a fall back from early completion of orders in the first quarter of 2019. However, we are unable to quantify the effect of this. This monthly fall in manufacturing is in line with the IHS Markit/CIPS PMI for April 2019 (PDF, 147KB).

Rolling three-month growth in the services sector was 0.2% in April 2019. This was the lowest rolling three-month growth since April 2018. Growth was driven by wholesale and retail trade, within which retail trade was particularly strong, contributing 0.09 percentage points to headline GDP growth. Another large driver to growth was information and communication.

As seen in Figure 5, output in these sub-sectors has performed strongly over the past year, rising above the output level of the services sector as a whole. However, the rate of growth in these two sub-sectors has slowed from a stronger three months to March figure, contributing to the slowing services sector growth seen in the three months to April.

Month-on-month growth in the services sector was flat in April 2019. There was a large positive growth in information and communication in this month, however, this was in part offset by a contraction in professional, scientific and technical activities.

Rolling three-month growth in the construction sector was 0.4% in April 2019. This was driven by strong growth in infrastructure.

Month-on-month growth in construction was negative 0.4%. The largest negative contributor to monthly growth was private housing repair and maintenance.

Revisions in June Quarterly National Accounts: in a change to our published revisions policy, the June Quarterly national accounts (QNA) release will be open for revisions in Quarter 1 (January to March) 2019 only.

The Gross domestic product (GDP) Quality and Methodology Information report contains important information on:

• the strengths and limitations of the data and how it compares with related data
• uses and users of the data
• how the output was created
• the quality of the output including the accuracy of the data

Index of Services

Index of Production

Construction output in Great Britain