GDP monthly estimate, UK: March 2023

• Monthly real gross domestic product (GDP) is estimated to have fallen by 0.3% in March 2023, after showing no growth in February 2023 (unrevised from our previous publication).

• Looking at the broader picture, GDP grew by 0.1% in the three months to March 2023.

• The services sector fell by 0.5% in March 2023, after an unrevised fall of 0.1% in February 2023, and was the main contributor to the fall in monthly GDP.

• Output in consumer facing services fell by 0.8% in March 2023, after unrevised growth of 0.4% in February.

• Production output grew by 0.7% in March 2023, which was its strongest monthly growth since May 2021, following a fall of 0.1% in February 2023 (revised up from a 0.2% fall in our last publication).

• The construction sector grew by 0.2% in March 2023 after growth of 2.6% in February 2023 (revised up from a 2.4% growth in our previous publication).

Monthly real gross domestic product (GDP) is estimated to have fallen by 0.3% in March 2023 (Figure 1) following an unrevised flat February 2023. Monthly GDP is now estimated to be 0.1% above its pre-coronavirus (COVID-19) levels (February 2020).

Services sector output fell by 0.5% in March 2023, while production output grew by 0.7% and construction by 0.2%.

Looking more broadly, GDP grew by 0.1% in the three months to March 2023 when compared with the three months to December 2022, consistent with the output section in our GDP first quarterly estimate, UK: January to March 2022 bulletin. Services and production both grew by 0.1% in the three months to March 2023, while construction grew by 0.7%.

Monthly GDP grew by 0.3% in March 2023 compared with the same month last year. For comparison, monthly GDP grew by 0.6% between February 2022 and February 2023, revised up from 0.5% in our previous publication.

Services fell by 0.5% in March 2023, following an unrevised fall of 0.1% in February 2023, with falls in 9 of the 14 sub-sectors. Figure 3 shows the contributions from the services sector to gross domestic product (GDP) in March 2023.

The largest contributor to the fall in services was a 1.4% fall in March 2023 for wholesale and retail trade; repair of motor vehicles and motorcycles. There were falls in all three industries in March 2023: wholesale and retail trade and repair of motor vehicles and motorcycles was the main driver with a fall of 4.1%. Society of Motor Manufacturers and Traders (SMMT) reported that, although this was the strongest March since 2019, it was still below average pre-coronavirus (COVID-19) pandemic March volumes for new car registrations. There was also a 0.9% fall in the retail trade, except in the motor vehicles and motorcycles industry, as reported in our Retail sales, Great Britain: March 2023 bulletin.

Information and communication was the next largest contributor to the fall in services, with a fall of 1.1% in March 2023. The main driver was motion picture, video and TV programme production, sound recording and music publishing, which fell by 6.1% in March.

Administrative and support service activities was the third largest contributor to the fall in services, with a fall of 1.3% in March 2023. There were falls in five of the six industries within, including a 2.3% fall in rental and leasing activities and a 2.3% fall in office administrative, office support and other business support activities.

The largest offsetting movements for services output were a 1.5% growth in arts, entertainment and recreation, where creative, arts and entertainment activities grew by 3.3% in March 2023. There was also a 0.1% growth in real estate activities, with growths in both imputed rent (of 0.1%) and real estate activities on a fee or contract basis (of 1.7%).

NHS Test and Trace services and vaccine programmes

NHS Test and Trace and COVID-19 vaccination programme activity increased by 16% in March 2023 after four consecutive monthly falls (Figure 4), but 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. The NHS Test and Trace services and vaccine programmes section will not feature in future releases of this bulletin, however the data will be available in our Health volume adjustments and contribution to GDP growth dataset.

A full record of the volume estimates of NHS Test and Trace and vaccination programmes, along with their contribution to GDP growth, can be found in our accompanying dataset.

Consumer-facing services

Output in consumer-facing services fell by 0.8% in March 2023, after unrevised growth of 0.4% in February. Consumer-facing services were 9.6% below their pre-coronavirus levels (February 2020) in March 2023, while all other services were 1.8% above (Figure 5).

The largest contribution to the fall in consumer facing services in March 2023 came from wholesale and retail trade of motor vehicles and motorcycles, with a fall of 4.1%. Society of Motor Manufacturers and Traders (SMMT) reported that, although this was the strongest March since 2019, it was still below average pre-coronavirus (COVID-19) pandemic March volumes for new car registrations.

The next largest contributions were from 0.9% falls in both the retail trade, except of motor vehicles and motorcycles industry (as reported in our Retail sales, Great Britain: March 2023 bulletin) and the food and beverage service activities industry.

Overall, the services sector grew by 0.1% in the three months to March 2023 compared with the three months to December 2022, with growths in 6 of the 14 services sub-sectors.

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

Production output grew by 0.7% in March 2023 (Figure 6), the strongest monthly growth since May 2021 in this sector. This follows a fall of 0.1% in February 2023, revised from a 0.2% fall in our previous publication. Manufacturing grew by 0.7% and was the largest contributor to the growth in March 2023.

The manufacturing sector saw growths in 7 of its 13 sub-sectors (Figure 7). The manufacture of basic pharmaceutical products and pharmaceutical preparations, which grew by 4.0%, was the largest positive contributor after two consecutive falls in January 2023 (5.3%) and February 2023 (0.8%). Notable growth was also seen in the manufacturing of computer, electronic and optical product; and the manufacture of basic metals and metal products, growing by 3.3% and 1.7% respectively.

There were falls in 6 of the 13 sub-sectors within manufacturing, with manufacture of rubber and plastics products the largest negative contributor, falling by 1.3%.

Electricity, gas, steam and air conditioning supply grew by 1.1% with growth in both the manufacture of gas and electric power generation, transmission and distribution, growing by 3.3% and 0.1% respectively. Energy trends data produced by the Department for Energy Security and Net Zero (DESNZ) (XLSX, 121KB), show the average temperature in March 2023 was 0.7 degrees lower than in March 2022.

Mining and quarrying was the only negative contributor to production, falling by 1.4% in March 2023. This was driven by other mining and quarrying with a fall of 8.2% in March after growths of 6.9% in February 2023 and 3.9% in January 2023.

Water supply and sewerage grew by 1.7% in March 2023, with growth in waste collection, treatment and disposal activities (up 2.7%), in sewerage (up 2.2%) and water collection, treatment and supply (up 0.2%).

Overall, production output increased by 0.1% in the three months to March 2023, compared with the three months to December 2022, driven primarily by growth of 0.5% in manufacturing.

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

Monthly construction output is estimated to have increased 0.2% in volume terms in March 2023; this follows a 2.6% growth in February 2023; with March 2023 being the highest monthly value in level terms (£15,616 million) since records began in January 2010.

The rise in monthly construction output came from an increase in new work (0.7%), partially offset by a decrease in repair and maintenance (0.6% fall) on the month, with four out of the nine sectors seeing an increase on the month.

At the sector level, the main contributors to the monthly increase were seen in infrastructure new work and public other new work, which increased 2.2% and 6.5%, respectively.

Anecdotal evidence received from returns for the Monthly Business Survey for Construction and Allied Trades (MBS) suggested an easing of inflation and material costs. Despite this, some businesses still noted customers hesitating to request work because of economic worries.

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: March 2023, new orders and Construction Output Price Indices, January to March 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 often difficult to quantify these effects.

There was anecdotal evidence, reported on monthly business survey returns, to suggest that industrial action in March 2023 had a notable impact on different industries of varying degrees. These included the health sector (junior doctors), the civil service, the education sector (teachers and university lecturers) and the rail network. This is further supported by the Business Insights and Conditions Survey (BICS), which stated 1 in 10 businesses (9%) were directly or indirectly affected by industrial action in March 2023.

An exceptionally wet March 2023 (the sixth wettest March since 1836), as seen in the Met Office's Monthly climate summary (PDF, 5.9MB), may have also played a part in reducing output for some industries. This was described as a reason for the decline in retail sales in March 2023 data. Anecdotal evidence was also provided in industries such as food and beverage service activities, sports and recreation activities and some of the service industries associated with the construction industry, for example, rental and leasing of plant and machinery and wholesalers of construction products.

This release gives data for March 2023 for the first time. January 2023 and February 2023 are open for revision and will be consistent with data in our GDP first quarterly estimate, UK: January to March 2023 bulletin published on the same day.

The next monthly gross domestic product (GDP) release on 14 June 2023 will have no periods open for revision in line with the National Accounts Revision Policy.

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 our following releases:

• Construction output in Great Britain: March 2023, new orders and Construction Output Price Indices, January to March 2023

• Index of Production, UK: March 2023

• Index of Services, UK: March 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-coronavirus 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 impact these published estimates of GDP and associated breakdowns. We are monitoring the data and will seek to implement any resulting changes into the national accounts as soon as possible.

Additional bank holiday in September 2022 for the State Funeral of Queen Elizabeth II

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 on strengths, limitations, appropriate uses, and how the data were created is available in our 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.