GDP monthly estimate, UK: August 2023

• Monthly real gross domestic product (GDP) is estimated to have grown by 0.2% in August 2023, following a fall of 0.6% in July 2023, revised down from a 0.5% fall in our previous publication.

• Looking at the broader picture, GDP increased by 0.3% in the three months to August 2023, with growth in all sectors.

• Services output rose by 0.4% in August 2023 and was the main contributor to the growth in GDP.

• Output in consumer-facing services fell by 0.6% in August 2023 after a fall of 0.2% in July 2023, revised down from no growth in our previous publication.

• Production output fell by 0.7% in August 2023 after falling by 1.1% in July 2023, revised down from a 0.7% fall in our previous publication.

• The construction sector fell by 0.5% in August 2023 after a fall of 0.4% in July 2023, revised up from a 0.5% fall in our previous publication.

Monthly real gross domestic product (GDP) is estimated to have grown by 0.2% in August 2023, following a fall of 0.6% in July 2023 (Figure 1), revised down from a fall of 0.5% in our previous publication.

This release gives data for August 2023 for the first time. In line with the National Accounts Revisions Policy, it also incorporates revisions to monthly data from January 1997 to June 2023, as published in our Quarterly national accounts bulletin on 29 September 2023. July 2023 is also open to revision for the first time. Further information on these revisions can be found in Section 7: Revisions to gross domestic product.

Looking at the broader picture, GDP showed 0.3% growth in the three months to August 2023 when compared with the three months to May 2023. Production grew by 1.2% and was the main contributing sector to the three-month growth. Services output rose by 0.1% and construction by 0.9%.

Output in the services sector rose by 0.4% in August 2023 and was the only positive contributing sector to the growth in monthly GDP. Production output fell by 0.7% and construction output fell by 0.5% (Figure 2).

Monthly GDP grew by 0.5% in August 2023 compared with the same month last year. For comparison, monthly GDP grew by 0.3% between July 2022 and July 2023 (revised up from showing no growth in our previous publication).

Services output grew by 0.4% in August 2023 following a fall of 0.6% in July 2023, revised down from a fall of 0.5% in our last publication.

Overall, the services sector grew by 0.1% in the three months to August 2023 compared with the three months to May 2023. Figure 3 shows the monthly contributions from the services sector to GDP in August 2023.

The largest drivers of the growth in monthly services output were professional, scientific and technical activities, and education.

Professional, scientific and technical activities grew by 1.2% in August 2023, following on from a 0.5% growth in July 2023. The architectural and engineering activities; technical testing and analysis industry was the largest contributing industry, growing by 4.7% in August, followed by legal activities, which grew by 2.3%.

Education grew by 1.6% in August 2023, after a fall of 1.7% in July 2023 where there were two days of industrial action by teachers in England. Please note that education attendance is considered to be constant over the school year so summer holidays do not reduce the estimate of education output in August 2023. Looking at the three months to August 2023, compared with the three months to May 2023, education output showed no growth.

Information and communication also grew in August 2023, by 0.9%. The growth was driven by computer programming, consultancy and related activities, which grew by 2.4% in August after a fall of 3.1% in July. Wholesale and retail trade; repair of motor vehicles and motorcycles also grew in August 2023, by 0.6%, with the largest contributor being the wholesale trade, except of motor vehicles and motorcycles industry's growth of 1.1% in August.

The largest downward contribution was from arts, entertainment and recreation, which fell by 7.4% in August 2023, following 6.8% growth in July 2023, its largest growth since May 2021. Sports activities and amusement and recreation activities fell by 10.8%, after growth of 12.2% in July, and creative, arts and entertainment fell by 7.7%, after growth of 4.6% in July. In the three months to August 2023, compared with the three months to May 2023, arts, entertainment and recreation has grown by 2.7%.

Consumer-facing services

Output in consumer-facing services fell by 0.6% in August 2023 and remains 4.3% below pre-coronavirus (COVID-19) levels (February 2020), while all other services were 7.0% above (Figure 4). The largest negative contributions in August 2023 came from the sports activities and amusement and recreation activities industry (down 10.8%) and other personal service activities (down 4.3%).

The largest positive contributions to consumer-facing services in August 2023 came from accommodation (up 3.4%) and buying and selling, renting and operating of own or leased real estate, excluding imputed rent (up 0.7%).

Consumer-facing services were 4.3% below their pre-coronavirus levels (February 2020) in August 2023, with 10 of 13 industries lower than February 2020 (Figure 5). Within consumer-facing services, the largest contributor to this lower level in August 2023, compared with February 2020, was buying and selling, renting and operating of own or leased real estate, excluding imputed rent, where output was 8.9% lower.

Figure 5: 10 of 13 consumer-facing service industries remain below their pre-coronavirus levels (February 2020) in August 2023

Monthly consumer-facing services index, February 2020 to August 2023, UK

Notes:

1. Condensed industry titles are used for presentation purposes, for full titles please see Consumer facing services industry classification in our measuring the data section.

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More detailed breakdowns on services are available in the Index of Services, UK: August 2023.

Production output fell by 0.7% in August 2023, following a fall of 1.1% in July 2023, revised down from a 0.7% fall in our previous publication.

The largest driving sub-sector was manufacturing, which fell by 0.8% in August 2023 (Figure 6). Overall though, production output rose by 1.2% in the three months to August 2023, where manufacturing was the main driver, growing by 1.7%.

Manufacturing's 0.8% fall was the main contributor to the monthly fall in production, with 9 of its 13 sub-sectors down on the month. This follows a fall of 1.2% in July 2023.

Other manufacturing and repair was the main driving industry within manufacturing, falling by 3.4% in August 2023, followed by manufacture of computer, electronic and optical products, which fell by 3.2% in the month. The largest offsetting positive contribution within manufacturing came from the manufacture of transport equipment, for which output rose by 1.1% in August 2023 (Figure 7).

Mining and quarrying was the only production sub-sector to see increased output in August 2023, growing by 2.9%, driven by growth of 3.5% in the extraction of crude petroleum and natural gas.

Electricity, gas, steam and air conditioning supply fell by 1.8% in August 2023 driven by a 2.1% fall in electric power generation, transmission and distribution.

Water supply and sewerage fell by 1.6% mainly driven by a 4.0% fall in sewerage.

More detailed breakdowns on production are available in the Index of Production, UK: August 2023.

Monthly construction output is estimated to have decreased by 0.5% in volume terms in August 2023. This follows a 0.4% decrease in July 2023, revised up from a fall of 0.5% in our previous publication.

In August 2023, as part of our Monthly Business Survey (MBS), some businesses told us that heavy rainfall and lower-than-average temperatures led to delays in planned work. On the three months to August 2023, construction output increased by 0.9% compared with the three months to May 2023.

The decrease in monthly output was driven by a decrease of 1.5% in new work, with repair and maintenance increasing on the month by 1.0% (Figure 8). Five out of the nine sectors saw a decrease on the month, with the main contributors in new work coming from private commercial, and private housing, which decreased by 4.1% and 1.4%, respectively.

Further detail on construction output growth rates and new orders can be found in our Construction output in Great Britain: August 2023 bulletin.

There were some common themes that were anecdotally reported (as part of the Monthly Business Survey for Production and Services) to have played a part in performance across different industries. However, it is difficult to quantify the exact impact of each theme.

The industrial action in August 2023 had an impact on different industries to varying degrees. The health sector (junior doctors and senior doctors), rail network and some parts of the transport network (bus and airports) all undertook industrial action for parts of August. However, despite the industrial action, not all of these sectors saw a decline on August.

This release gives data for August 2023 for the first time. In line with the National Accounts Revisions Policy it also incorporates revisions to monthly data from January 1997 to June 2023, as published in our Quarterly national accounts bulletin on 29 September 2023.

July 2023 is also open to revision, taking on updated survey data and seasonal adjustment reviews. Table 1 shows the revisions to monthly gross domestic product (GDP) and its sectors for January to July 2023, since the last monthly publication on 13 September 2023.

In line with the National Accounts Revisions Policy, this release contains data that are consistent with the UK National Accounts, The Blue Book 2023, which will be released on 31 October 2023. A wide range of improvements to data sources and methods have been made as part of Blue Book 2023. This includes estimating 2021 for the first time using the supply and use tables (SUTs) framework, which looks at the supply of goods and services, how they are used in the economy and their associated prices at a very detailed level. These changes, and their impacts on estimates of GDP, up to 2021, were detailed in our Impact of Blue Book 2023 changes on gross domestic product article.

As noted previously, these revisions for 2020 and 2021 were larger than normal, reflecting the larger movements in GDP and the practical challenges of estimating GDP throughout the coronavirus (COVID-19) pandemic.

The revisions to 2022 onwards are as a result of the Blue Book 2023 methodological changes and improved source data and additional updated data. This also includes new Value Added Tax (VAT) turnover data for Quarter 4 (Oct to Dec) 2022 and Quarter 1 (Jan to Mar) 2023. The specific changes made to monthly GDP methods and data sources are outlined in Section 10: Measuring the data.

Our next monthly GDP release is on 10 November. This release will publish data for September 2023 for the first time and July and August 2023 will be open for revision. On the same date we will also publish the first quarterly estimate for Quarter 3 (July to Sept) 2023, this release will not include any revisions to earlier periods.

Our latest estimates show that the output of COVID-19 related testing, tracing and vaccinations is now less than £10 million for the second consecutive month. Given this is now a small contributor to GDP growth we will be no longer be including this dataset in future releases. COVID-19 related testing, tracing and vaccinations will continue to be included on our estimates of monthly GDP as part of the human health industry.

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

• Construction output in Great Britain: August 2023

• Index of Production, UK: August 2023

• Index of Services, UK: August 2023

In the UK, we produce estimates of monthly and quarterly GDP. However, there are reasons as to why these would not provide the same estimate as to where the economy is relative to its pre-coronavirus (COVID-19) pandemic levels. This primarily reflects that the monthly estimate of GDP is based on only the output measure of GDP, while quarterly estimates of GDP reflect the average of the three approaches (output, income and expenditure).

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.

Updates to monthly GDP methods and data sources in Blue Book 2023

A number of changes have been made to the methods and data sources used in compiling monthly GDP and output approach to measuring GDP estimates as part of UK National Accounts, The Blue Book 2023.

Deflators

As announced in our Blue Book 2023 changes article, we have made a number of deflator improvements as part of Blue Book 2023. The following deflator improvements have been incorporated in our monthly GDP estimates. These will affect all industries that produce these products.

The weights used to combined the Producer Price Index and Export Price Index to create an overall output price have been improved for all of manufacturing.

The amount of Services Producer Price Indices (SPPI) has been increased, replacing lower quality deflators for the following products:

• CPA_J62: Computer programming, consultancy and related services

• CPA_J63: Information services

• CPA_M691: Legal activities

• CPA_M692: Accounting, bookkeeping and auditing services; tax consulting services 

• CPA_M70: Services of head offices; management consulting services 

• CPA_M71: Architectural and engineering services; technical testing and analysis services 

• CPA_M73: Advertising and market research services

• CPA_M74: Other professional, scientific and technical services

• CPA_N82: Office administrative, office support and other business support services

A new methodology to account for changes in the quality of computer hardware has been included within the deflator for product CPA_C26: Computer, electronic and optical products.

The deflator for product CPA_M72: Scientific research and development services has been updated to include a Consumer Price Index (CPI).

Implied deflators from household final consumption expenditure have been replaced with Consumer Price Indices (CPI).

Non-market and market sector breakdowns

We have expanded our non-market output industry coverage to be consistent with our approach to supply and use, bringing in data for the non-profit institutions serving households (NPISH) sector to go alongside general government data sources.

The annual Blue Book processing, where we align our monthly output estimates with the higher quality annual estimates of gross value added (GVA) from supply use, is now done separately for each sector, using estimates of market output for the market sector and non-market output for the non-market sector. These concepts are slightly different as the non-market sector can produce market output where an economically significant fee is charged, which will be included in the GVA estimate, but the approach taken provides the best estimate in the short term.

Estimates of GVA in the most recent time periods (often referred to as "the tail", which are time periods beyond where supply use estimates are available), are created separately for the market and non-market sectors by splicing the growth from our market and non-market output series onto the series that have been aligned to sectors GVA from supply use. This removes the need for fixed based weights for aggregating market and non-market data to estimate the total economy.

Market output continues to be measured in the same way, predominantly using the Monthly Business Survey (MBS). While the MBS will pick up some non-market output of the NPISH sector, this is a small component and it remains the best estimate of market sector growth in our short-term estimates.

The Monthly GDP data sources catalogue provides a full breakdown of the data used in this publication.

Consumer-facing services industry classification

The industry breakdown used for consumer-facing services is based on the UK Standard Industrial Classification (SIC).

The following list contains the full SIC names of industries included in consumer facing services and their corresponding shortened industry name where this has been used in Figure 5:

• Wholesale and retail trade; repair of motor vehicles and motorcycles – Sales and repairs of motor vehicles
• Retail trade, except of motor vehicles and motorcycles – Retail except motor vehicles
• Rail transport
• Accommodation
• Food and beverage service activities – Food and beverage
• Buying and selling, renting and operating of own or leased real estate, excluding imputed rent – Real estate activities
• Veterinary activities
• Travel agency, tour operator and other reservation service and related activities – Travel and tourism activities
• Gambling and betting services
• Sports activities and amusement and recreation activities – Sports, amusement and recreation
• Activities of membership organisations
• Other personal service activities
• Activities of households as employers of domestic personnel – Households as employers of domestic personnel

Additional bank holiday in May 2023 for the Coronation of King Charles III

There was an additional bank holiday for the coronation of King Charles III on Monday 8 May 2023. While adjustments are made for regular calendar effects, there was no explicit adjustment for this ad hoc event. However, the timing of the bank holiday indirectly affects the number of trading days, which could affect GDP estimates positively or negatively, depending on the sector.

Office for Statistics Regulation review of GDP

The Office for Statistics Regulation (OSR) will shortly be completing a review of the practices around the preparation and release of information about revisions to estimates of GDP in our Impact of Blue Book 2023 article released on 1 September. This will cover the following:

• processes and quality assurance in making revisions to GDP

• potential improvements to early estimates of GDP enabled through enhanced access to data

• communication of revisions to GDP, the story behind the most recent set of revisions in particular, and uncertainty in early estimates of GDP

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.