GDP monthly estimate, UK: January 2023

• Monthly real gross domestic product (GDP) is estimated to have grown by 0.3% in January 2023, after falling by 0.5% in December 2022.

• Looking at the broader picture, GDP was flat in the three months to January 2023.

• The services sector grew by 0.5% in January 2023, after falling by 0.8% in December 2022, with the largest contributions to growth in January 2023 coming from education, transport and storage, human health activities, and arts, entertainment and recreation activities, all of which have rebounded after falls in December 2022.

• Output in consumer-facing services grew by 0.3% in January 2023; this follows a fall of 1.2% in December 2022.

• Production output fell by 0.3% in January 2023, following growth of 0.3% in December 2022.

• The construction sector fell by 1.7% in January 2023 after being flat in December 2022.

• There are no revisions to previously published data in this release.

Monthly real gross domestic product (GDP) is estimated to have increased by 0.3% in January 2023 (Figure 1) following a fall of 0.5% in December 2022. Monthly GDP is now estimated to be 0.2% below its pre-coronavirus levels (February 2020).

The services sector grew by 0.5% in January 2023 and was the main driver of the increase in GDP. Production fell by 0.3% in January 2023, and construction output decreased by 1.7%.

Looking more broadly, GDP was flat in the three months to January 2023 when compared with the three months to October 2022. Services was flat in the three months to January 2023, while production grew by 0.3% and construction fell by 0.7% in this period.

Monthly GDP was broadly flat in January 2023 compared with the same month last year. For comparison, monthly GDP fell by 0.1% between December 2021 and December 2022.

There have been no revisions to previously published data in this release.

Services grew by 0.5% in January 2023, following a fall of 0.8% in December 2022. Figure 3 shows the contributions from the services sector to gross domestic product (GDP) in January 2023.

The largest driver of the growth in services in January 2023 was education, which grew by 2.5% following a fall of 2.6% in December 2022. In January 2023, school attendance levels returned to normal levels following a significant drop in December 2022.

Transport and storage services grew by 1.6% on the month; the main contributor was an increase of 6.4% in postal and courier activities. This growth comes after a fall of 10.5% in December 2022, which was partly because of the impact of postal strikes.

Human health and social work activities grew by 0.7% in January 2023, following a fall of 2.8% in December 2022. January saw growth of 1.1% in human health activities driven by increased output in the private sector.

Arts, entertainment and recreation grew by 3.4% in January 2023. This was largely driven by sports, amusements and recreation activities, which grew by 8.9% in a month where Premier League football returned to a full schedule following fixtures being postponed in December 2022 for the FIFA World Cup.

Real estate activities, which fell by 0.1% in January 2023, was the only negative contributor in services. Within this subsector, real estate activities on a fee or contract basis fell by 2.3%.

NHS Test and Trace services and vaccine programmes

NHS Test and Trace and coronavirus (COVID-19) vaccination programme activity fell by 32% in January 2023 for its third consecutive monthly fall (Figure 4) and remains significantly lower than its peak towards the end of 2021. Overall, NHS Test and Trace and the COVID-19 vaccination programme contributed negligibly to monthly GDP growth.

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.

Consumer-facing services

Output in consumer-facing services grew by 0.3% in January 2023, following a fall of 1.2% in December 2022. Consumer-facing services were 8.6% below their pre-coronavirus levels (February 2020) in January 2023, while all other services were 2.1% above (Figure 5).

The largest contribution to the growth in consumer-facing services in January 2023 came from sports, amusement and recreation activities. This grew by 8.9% as Premier League football resumed a full schedule of fixtures after matches were postponed in December 2022 for the FIFA World Cup.

Growth was also seen in food and beverage services (1.1%), other personal services (2.6%) and retail trade, except of motor vehicles and motorcycles (0.5%), which all contributed to the overall growth in consumer-facing services.

The largest negative contributor was wholesale and retail trade and repair of motor vehicles and motorcycles, which fell by 2.3%.

Overall, the services sector was flat in the three months to January 2023 compared with the three months to October 2022, with positive growth in 6 of the 14 services sub-sectors offset by negative contributions in the other 8.

More detailed breakdowns on services are available in our Index of Services, UK: January 2023 bulletin.

Production output fell by 0.3% in January 2023, after growth of 0.3% in December 2022. The sector saw falls in two of its four subsectors, with manufacturing being the largest contributor to the production sector’s negative growth.

Manufacturing was the largest negative contributor, falling by 0.4% in the month. Manufacturing saw declines in 7 of its 13 subsectors (Figure 7) with the manufacture of basic pharmaceutical products and pharmaceutical preparations, which fell by 4.7%, being the largest negative contributor. Falls were also seen in manufacture of machinery and equipment not elsewhere classified (n.e.c.) (down 1.6%), manufacture of transport equipment (down 0.5%) and manufacture of computer, electronic and optical products (down 1.0%).

Manufacture of chemical and chemical products was the largest positive contributor (up 2.2%). There were also growths in the manufacture of food products, beverages and tobacco (up 0.7%), manufacture of textiles, wearing apparel and leather products (up 1.2%), manufacture of rubber and plastics products, and other non-metallic mineral products (up 0.4%) and manufacture of electrical equipment (up 1.2%).

Mining and quarrying fell by 2.2% in January 2023. This was driven by extraction of crude petroleum and natural gas with a 3.0% fall.

Electricity, gas, steam and air conditioning supply grew by 0.5%, with a growth of 0.9% in electric power generation, transmission and distribution and a fall of 0.5% in manufacture of gas.

Water supply and sewerage grew by 0.6% in January 2023, with growth in all four industries.

Overall, production increased by 0.3% in the three months to January 2023, compared with the three months to October 2022, driven primarily by electricity, gas, steam and air conditioning supply, which grew by 2.2%.

More detailed breakdowns on production are available in our Index of Production, UK: January 2023 bulletin.

Monthly construction output is estimated to have decreased 1.7% in volume terms in January 2023; this is the weakest monthly growth since June 2022 (negative 2.0%). It is the lowest monthly value in level terms (£14,841 million) since February 2022 (£14,719 million).

The decrease in monthly construction output came from a fall in new work (4.0% fall), partially offset by an increase in repair and maintenance (2.0%), with five out of the nine sectors seeing a decrease.

At the sector level, the main contributors to the monthly decrease were seen in infrastructure new work and private new housing, which decreased 6.5% and 3.0%, respectively.

Anecdotal evidence received from returns for the Monthly Business Survey for Construction and Allied Trades (MBS) continued the narrative around economic uncertainty leading to delays, cancellations and less work being requested by customers in general. Further anecdotal evidence highlighted the mixed impact of heavy rainfall in the first two weeks of January 2023, with outdoor work being affected negatively, but repair and maintenance work seeing an increase because of the weather. This was confirmed in the Met Office Monthly Weather Report (PDF, 5.06 MB) for January 2023.

Further detail on construction output growth rates, along with new orders in the construction industry and construction output prices, can be found in our Construction output in Great Britain: January 2023 bulletin.

There were some common themes that were anecdotally reported (as part of the Monthly Business Survey) to have played a part in performance across different industries. However, it is often difficult to quantify these effects.

The cost-of-living crisis continued to be mentioned extensively throughout the comments received to the survey. This came from reduced demand from households and businesses for goods and services and also in rising costs of materials, energy, and staff costs.

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.

Real GDP

Real GDP excludes any inflationary issues and reflects the changes in volume terms. This can also be referred to as volume estimates of GDP. For further definitions, please see the Glossary of economic terms.

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

• Construction output in Great Britain: January 2023

• Index of Production, UK: January 2023

• Index of Services, UK: January 2023

There have been large movements in UK gross domestic product (GDP) over the course of the coronavirus (COVID-19) 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 our Measuring monthly and quarterly UK gross domestic product during the coronavirus (COVID-19) pandemic article.

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.

The Office for National Statistics (ONS) is aware of reclassifications or relocations of companies that may affect these published estimates of GDP and associated breakdowns. It is monitoring the data and will seek to implement any resulting changes into the national accounts as soon as possible.

Additional bank holiday for Queen Elizabeth II's State Funeral in September 2022

An additional bank holiday was announced for the State Funeral of Queen Elizabeth II, which occurred on 19 September 2022. This resulted in one fewer working day in September 2022, which may affect GDP estimates. Past experience with similar events in 2002 and 2012, as described in Section 3 of A guide to interpreting monthly gross domestic product, highlighted the possibility of fluctuations in monthly GDP.

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. We reviewed the trading day patterns of all industries to ensure the genuine activity from the bank holiday was reflected in our published GDP seasonally adjusted estimates. Caution is advised when interpreting seasonally adjusted movements involving September and October 2022, and rolling three-month estimates.

Quality and methodology information (QMI) 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.