GDP monthly estimate, UK : December 2021

• Gross domestic product (GDP) fell by 0.2% in December 2021 to equal its pre-coronavirus (COVID-19) pandemic level (February 2020); while the Quarter 4 (Oct to Dec) 2021 estimate was still 0.4% below its pre-coronavirus level (Quarter 4 2019).

• Services output was down 0.5% in December 2021, while production rose 0.3% and construction increased by 2.0%; services and construction were both above pre-coronavirus levels, by 0.5% and 0.3% respectively, while production remained 2.6% below.

• Output in consumer-facing services fell by 3.0% in the month, mainly driven by a 3.7% fall in retail trade, while all other services rose by 0.1%; consumer-facing services were 8.4% below their pre-coronavirus levels, while all other services were 2.8% above.

• In the previous GDP monthly bulletin, we said that quarterly GDP for Quarter 4 2021 would either match or surpass its pre-coronavirus level (Quarter 4 2019) provided the monthly December 2021 estimate did not fall by more than by 0.2% and there were no other data revisions; while December 2021 fell by 0.2%, revisions to 2021 data - in line with the National Accounts Revisions Policy - saw Quarter 4 2021 remain below its pre-coronavirus level.

Monthly real gross domestic product (GDP) is estimated to have fallen by 0.2% in December 2021, compared with a 0.7% growth in November 2021 (revised down from 0.9% growth). This release includes revisions to the monthly data back to January 2021, consistent with the first quarterly estimate of GDP.

Services were the main contributor to GDP’s 0.2% fall in December 2021, detracting 0.4 percentage points from GDP growth (Figure 2). This was partially offset by a positive 0.1 percentage point contribution from construction, while production made a negligible contribution.

In December 2021, GDP was estimated to have equalled its pre-coronavirus (COVID-19) pandemic level (February 2020). November 2021 remains the first month that GDP recovered to above its pre-coronavirus levels, by 0.3% (revised down from the previous estimate of being 0.7% above).

At the sub-sector level, the largest positive contributors to monthly GDP between February 2020 and December 2021 were human health and social work activities, and professional, scientific and technical activities. The largest detractors from monthly GDP between February 2020 and December 2021 were other service activities and real estate activities (Figure 3).

GDP contracted by 0.2% in December 2021 but because of revisions back to January 2021, in-line with the National Accounts Revisions Policy, Quarter 4 (Oct to Dec) 2021 was still below its pre-coronavirus level (Quarter 4 2019), by 0.4%. The monthly revisions back to January 2021 are available in Section 7.

The Office for National Statistics (ONS) produces estimates of both monthly and quarterly GDP using separate methods. As such both estimates of GDP have different pre-pandemic levels. Further information is available in Measuring monthly and quarterly UK gross domestic product during the coronavirus (COVID-19) pandemic.

GDP grew by 1.0% in the three months to December 2021. The main sub-sectors contributing to this growth were human health and social work activities, administrative and support service activities, and transport and storage.

Following the large 9.2% fall in 2020 because of the initial impact of the coronavirus pandemic and public health restrictions, GDP output saw an annual rise of 7.3% in 2021. To see the average annual GDP growth please see the first quarterly estimate of GDP.

Services output fell by 0.5% in December 2021 but remained 0.5% above its pre-coronavirus (COVID-19) pandemic level (February 2020). This followed a 0.6% growth into November 2021 (revised down from 0.7%). At the services sub-sector level in December 2021, 5 of the 14 were above their pre-coronavirus levels, with the largest contribution from human health and social work activities.

Wholesale and retail trade fell by 3.2% in December 2021 and was the main contributor to December’s fall in services (Figure 4). The main driver of this fall was retail trade, which contracted by 3.7%. The Omicron variant of coronavirus was reported by some retailers as affecting retail footfall. More detailed breakdowns on retail trade are available in Retail sales, Great Britain: December 2021.

Accommodation and food service activities was the second largest contributor to December’s fall in services, down by 9.2%. Both accommodation and food and beverage service activities fell in December, by 11.5% and 8.1% respectively, with businesses reporting impacts from the Omicron variant.

The largest positive contributor to services growth in December 2021 was human health and social work activities (up 2.4%). The NHS Test and Trace and vaccination programme was the main driver of the increase with partially offsetting downward contributions from other areas of human health, including GP appointments and A&E attendance. The fall in GP service activity in December was driven by a reduction in face-to-face appointments. Telephone consultations also fell, but they remain much stronger than pre-coronavirus levels.

Consumer-facing services

Output in consumer-facing services fell by 3.0% in December 2021, mainly driven by a 3.7% fall in retail trade and an 8.1% fall in food and beverage service activities. More detailed breakdowns on retail trade are available in Retail sales, Great Britain: December 2021.

Consumer-facing services were 8.4% below their pre-coronavirus levels (February 2020) in December 2021, while all other services were 2.8% above.

Overall, services grew by 1.2% in the three months to December 2021 compared with the previous three months (July to September 2021), with positive growth seen in 8 of the 14 services sub-sectors.

More detailed breakdowns on services are available in the Index of Services, UK: December 2021.

NHS Test and Trace services and vaccine programmes

The NHS Test and Trace and COVID-19 vaccination programme had a positive 0.7 percentage point impact on gross domestic product (GDP) in December 2021, with output of these services increasing by 51% and 19% respectively (Table 1). Growth in coronavirus testing in England was particularly strong, driven by increases in both the number of tests processed in laboratories and the number of lateral flow devices dispatched. The increase in coronavirus vaccinations in England was driven by the number of booster vaccinations administered.

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 the accompanying dataset.

Production output increased by 0.3% in December 2021, with growth in three out of the four sub-sectors. This follows growth of 0.7% in November 2021 (revised down from 1.0%).

Production was 2.6% below its pre-coronavirus (COVID-19) pandemic level (February 2020), primarily driven by manufacturing which was 2.5% below. Water supply and sewerage remained the only production sector above the pre-coronavirus level (9.0%).

Manufacturing grew by 0.2% in December 2021, with the manufacture of basic pharmaceutical products and pharmaceutical preparations (up 12.0%) and the manufacture of transport equipment (up 3.1%) the main drivers of this growth.

Electricity, gas, steam and air conditioning supply increased by 1.6% in December 2021, with distribution of gas increasing by 5.6%. Water supply and sewerage also increased in December 2021, by 1.7%. Mining and quarrying was the only sector to fall in December 2021, with a contraction of 3.1% driven by a 2.7% fall in extraction of crude petroleum and natural gas.

Overall, production fell by 0.4% in the three months to December 2021, with falls of 3.2% in electricity, gas, steam and air conditioning supply and 4.5% in mining and quarrying. This was partially offset by an increase of 1.8% in water supply and sewerage. Manufacturing saw flat growth in the three months to December 2021.

More detailed breakdowns on production are available in the Index of Production, UK: December 2021.

Construction output increased 2.0% in December 2021 following an increase of 1.9% in November 2021 (revised from a 3.5% growth). 

Construction output was above its pre-coronavirus (COVID-19) pandemic level (February 2020) for the first time, by 0.3% (Figure 7). There are revisions back to January 2021 because of late and revised survey data, with the largest revisions seen in September and November 2021 (down 1.4 and 1.6 percentage points respectively). This means that construction is no longer estimated to have surpassed its pre-coronavirus levels in either April or November 2021. The monthly revisions back to January 2021 are available in Section 7.

The increase in monthly construction output in December 2021 was driven solely from an increase in new work (3.5%) while repair and maintenance saw a decline, decreasing 0.7%. 

At the sector level, the main contributors were infrastructure new work and private new housing, which increased by 8.5% and 3.1% respectively. Notable increases were also seen in the smaller sectors of private industrial new work and public new housing, which grew by 9.1% and 7.4% respectively. All sectors in repair and maintenance saw small decreases on the month. Anecdotal evidence received from both returns received for the Monthly Business Survey for Construction and Allied Trades and the Business Insights and Conditions Survey (BICS) suggested some of the issues in sourcing construction products over recent months had continued to ease.

Construction output rose by 1.0% in the three months to December 2021 compared with the previous three months (July to September 2021). Similar increases in both new work and repair and maintenance (1.1% and 0.8% respectively) contributed to the growth. At the type of work level, eight of the nine sectors saw an increase, with the largest contributions coming from public other, private industrial and private commercial new work (4.9%, 8.7% and 2.1% respectively).

Further detail on construction growth can be found in Construction output in Great Britain: December 2021, new orders and Construction Output Price Indices, October to December 2021.

There were some common themes that were anecdotally reported to have played a part in performance across different industries, however, it is often difficult to quantify these effects.

There was a rise in anecdotal evidence from businesses that customers had cancelled events and appointments, or that their staff or customers had been required to self-isolate because of the Omicron variant of coronavirus (COVID-19).

The problems seemed to be more consequential in the service sector, with the hospitality and retail industries being particularly affected.

This release gives data for December 2021 for the first time and incorporates revisions to monthly data from January 2021 to November 2021. This is consistent with GDP first quarterly estimate, UK: October to December 2021. Table 2 shows the revisions to monthly GDP and the main sectors from January to November 2021.

Construction saw revisions in all months back to January 2021 mainly because of late and revised survey data. Services and production saw revisions due to late survey data for October and November 2021. All three sectors also have revised seasonal factors, with the full year being available for the first time.

Contribution to growth

Contribution to growth indicates how many percentage points a sector or industry is adding or removing from a given growth rate, usually headline gross domestic product (GDP) growth.

Gross domestic product (GDP)

A measure of the economic activity produced by a country or region. GDP growth is the main indicator of economic performance. There are three approaches used to measure GDP:

• the output approach 

• the expenditure approach 

• the income approach  

Index numbers

Data relative to a given base value, which typically refers to a year.

Rolling three-month growth

Rolling three-month growth takes the average level of three consecutive months (for example, April, May and June), and compares it with the average level of the previous three months (for example, January, February and March). The rolling three-month growth rate is often used alongside the monthly growth rate, as the latter can be more volatile.

For further definitions, please see the Glossary of economic terms.

This release captures the direct effects of the coronavirus (COVID-19) pandemic and the government measures taken to reduce transmission of the virus.

Early in the pandemic, we faced some challenges in receiving timely responses to the Monthly Business Survey (MBS) as businesses adapted to new conditions. Further information on measuring the data across our main data sources is available in the following releases:

• Construction output in Great Britain: December 2021, new orders and Construction Output Price Indices, October to December 2021

• Index of Production, UK: December 2021

• Index of Services, UK: December 2021

There have been large movements in UK gross domestic product (GDP) over the course of the coronavirus pandemic. This is primarily in response to public health restrictions and voluntary social distancing that have been in place over this period. Given the size of these effects, there has been a focus on where the economy is relative to its pre-coronavirus pandemic levels.

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-pandemic levels. This primarily reflects that monthly estimates of GDP are based on only the output measure of GDP, while quarterly estimates of GDP reflect the average of the three approaches (output, income and expenditure).

However, 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.

Within the monthly GDP publication government data are sourced on a quarterly basis; a monthly forecast is used to estimate data for the monthly round until quarterly data are available. While this is a standard practice with many of our data sources, pre-empting the behaviour of a series during a pandemic, in particular for health and education, comes with more uncertainty than usual so caution is advised when looking at the monthly estimates beyond the latest published quarter.

Update to the System of National Accounts

As part of an update to the System of National Accounts, the United Nations (UN) are in the process of consulting on several areas being considered for improvement. Previous and live consultations can be found on the UN Statistics Division website. If you would like to discuss any of these consultations with the Office for National Statistics (ONS), please contact us at sna.consultations@ons.gov.uk. Bodies outside the UK National Statistical System are also free to respond to the consultations themselves.

Quality and methodology information on strengths, limitations, appropriate uses, and how the data were created is available in the Gross domestic product (GDP) QMI.

The monthly growth rate for GDP is volatile. It 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. Such comparisons and growth rates can nonetheless be found in our accompanying dataset.

Communicating gross domestic product

Recent analysis explains our latest position on how we are looking to communicate GDP, including how we will continue to acknowledge that "technical" recessions comprised at least two consecutive quarters of contracting GDP.

While it is still true that these early estimates are prone to revision, we prefer to focus on the magnitude of the contraction that has taken place following the coronavirus pandemic. It is clear that the contraction in GDP in Quarter 2 (Apr to June) 2020 was the largest recession on record.