GDP monthly estimate, UK: October 2022

• Monthly real gross domestic product (GDP) is estimated to have grown by 0.5% in October 2022, following a fall of 0.6% in September 2022, which was affected by the additional bank holiday for the State Funeral of HM Queen Elizabeth II.

• Looking at the broader picture, GDP fell by 0.3% in the three months to October 2022 compared with the three months to July 2022.

• The services sector grew by 0.6% in October 2022, after falling by 0.8% in September 2022; the largest contribution to the growth came from wholesale and retail trade; repair of motor vehicles and motorcycles, which rose by 1.9% in the month.

• Output in consumer-facing services grew by 1.2% in October 2022, after falls of 1.7% in September 2022 and 1.6% in August 2022.

• Production remained broadly flat in October 2022, after growth of 0.2% in September 2022; manufacturing was the only sub-sector to contribute positively to production in October 2022, offset by negative contributions from electricity, gas, steam and air conditioning supply, and water supply, sewerage, waste management and remediation activities.

• The construction sector grew by 0.8% in October 2022; this is its fourth consecutive increase after growths of 0.4% in September 2022, 0.6% in August 2022 and 0.2% in July 2022.

Monthly real gross domestic product (GDP) is estimated to have grown by 0.5% in October 2022 (Figure 1) following a fall of 0.6% in September 2022. Monthly GDP is now estimated to be 0.4% above its pre-coronavirus levels (February 2020).

Estimates for September 2022 were affected by the bank holiday for the State Funeral of Her Majesty Queen Elizabeth II, where some businesses may have closed or operated differently on this day. As this was a one-off event, its impact does not get removed from our seasonally adjusted estimates. This should be considered when interpreting the seasonally adjusted movements in September and October 2022. More information on our seasonal adjustment approach is available in Section 9: Measuring the data.

The services sector grew by 0.6% in October 2022 and was the main driver of the growth in GDP. Production remained broadly flat in October 2022 and construction grew by 0.8%, its fourth consecutive increase after growths of 0.4% in September 2022, 0.6% in August 2022 and 0.2% in July 2022 (Figure 2).

Looking more broadly, GDP fell by 0.3% in the three months to October 2022 compared with the three months to July 2022, with a 1.7% fall in production, a 1.1% rise in construction and fall of 0.1% in services.

Monthly GDP grew by 1.5% in October 2022 compared with the same month last year. For comparison, monthly GDP grew by 1.3% between September 2022 and September 2021.

Services grew by 0.6% in October 2022, following a fall of 0.8% in September 2022. Figure 3 shows the contributions from the services sector to GDP in both September and October 2022.

The main driver of services growth in October 2022 was wholesale and retail trade; repair of motor vehicles and motorcycles, which grew by 1.9% in the month following a fall of 2.0% in September 2022. All three industries within this sub-sector saw growth. Wholesale and retail trade; repair of motor vehicles and motorcycles rose by 6.5% in October, after a weak September. The Society of Motor Manufacturers and Traders (SMMT) reported new registrations for September 2022 were only 4.6% above September 2021, which was the weakest September since 1998. Wholesale trade except of motor vehicles and motorcycles rose by 1.9% and retail trade except of motor vehicles and motorcycles rose by 0.6% after a fall in September 2022. This, according to Retail sales, Great Britain: October 2022, was affected by the additional bank holiday for the State Funeral.

The second-largest contribution within services came from human health and social work activities, which grew by 1.3% in October 2022 following growth of 0.9% in September 2022. This was solely driven by a 1.8% rise in human health activities in October, where there was an increase in underlying health activities and a rise in coronavirus (COVID-19) testing and vaccinations for the second consecutive month because of the autumn booster campaign.

The only negative contributions towards services growth in October 2022 came from financial and insurance activities falling 0.2%, and education falling 0.3% in the month, because of a slight decrease in attendances when compared with September.

NHS Test and Trace services and vaccine programmes

NHS Test and Trace and COVID-19 vaccination programme activity grew for the second consecutive month in October 2022 (Figure 4), driven by an increase in vaccine activity because of the autumn booster campaign. Despite this growth on the month, levels remain significantly below the highs seen at the end of 2021. Overall, NHS Test and Trace, and the coronavirus vaccination programme contributed an estimated 0.1 percentage points to monthly GDP growth.

• Testing volumes for October 2022 grew by 8.6% from September 2022; laboratory-processed testing and lateral flow device testing volumes both grew so both contributed to this increase.

• Tracing volumes fell to zero in March 2022 for England and remain there; all contact tracing within the UK stopped as of June 2022.

• Vaccine volumes grew by 64% in October 2022; this growth was driven by the autumn booster programme, as it was in September 2022.

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 1.2% in October 2022, following a fall of 1.7% in September 2022. Consumer-facing services were 8.9% below their pre-coronavirus levels (February 2020) in October 2022, while all other services were 2.4% above (Figure 5).

The largest contribution towards consumer-facing services growth came from the wholesale and retail trade; repair of motor vehicles and motorcycles industry, which grew by 6.5% in October 2022, after a fall of 3.3% in September 2022. The Society of Motor Manufacturers and Traders (SMMT) reported new registrations for September 2022 were only 4.6% above September 2021, which was the weakest September since 1998.

There were also positive contributions from travel agency, tour operator and other reservation service and related activities, which grew by 7.1% in October 2022 after a 9.7% fall in September 2022, and sports activities and amusement and recreation activities, which grew by 5.9% in October 2022 after an 8.2% fall in September 2022.

Overall, services fell by 0.1% in the three months to October 2022 compared with the three months to July 2022, with negative growth in 9 of the 14 services sub-sectors offset by positive contributions in the other five.

More detailed breakdowns on services are available in our Index of Services, UK: October 2022 bulletin.

Production output remained broadly flat in October 2022, after a growth of 0.2% in September 2022, with negative growth in three of the four sub-sectors fully offset by growth in manufacturing.

Manufacturing was the only sub-sector to grow, rising by 0.7% in the month. The main drivers were the manufacture of basic pharmaceutical products and pharmaceutical preparations (up 8.4%) and manufacture of transport equipment (up 2.3%). Manufacturing saw a fall in 7 of its 13 sub-sectors, though not enough to offset the growth seen in the other six.

Within manufacture of transport equipment, the manufacture of motor vehicles, trailers and semi-trailers accounts for most of the growth. This increased by 6.0%, its second consecutive growth following a rise of 5.8% in September 2022.

Electricity, gas, steam and air conditioning supply was the largest negative contributor, falling by 2.4%, with a 4.1% fall in manufacture of gas and a 1.5% fall in electric power generation, transmission and distribution. According to anecdotal evidence from the Department for Business, Energy and Industrial Strategy (BEIS), demand in October 2022 was 4% lower than that seen in October 2021. In October 2022, average temperatures were 0.7 degrees higher than in October 2021, with 2.8 heating days. The estimated drop may also indicate some changes in consumer behaviour in response to recent energy price rises.

Water supply and sewerage was the second-largest negative contributor in October 2022, falling by 1.6%. This was driven by both sewerage, and water collection, treatment and supply, which decreased by 2.6% and 1.6% respectively.

Mining and quarrying saw the smallest fall, of 0.5%, driven by all industries within experiencing negative growth on the month.

Overall, production decreased by 1.7% in the three months to October 2022, compared with the three months to July 2022, driven primarily by manufacturing, which fell by 1.8%.

There has been a downward trend in manufacturing, since its last three-month on three-month growth in July 2021. There were also declines in mining and quarrying, and water supply and sewerage, which fell by 5.3% and 0.8% respectively. Electricity, gas, steam and air conditioning supply was the only sector that saw growth, up by 0.2% over the same period.

More detailed breakdowns on production are available in our Index of Production, UK: October 2022 bulletin.

Monthly construction output increased by 0.8% in volume terms in October 2022. This is the fourth consecutive monthly growth, with October 2022 having the highest level of construction output (£15,248 million) since records began in January 2010.

The 0.8% growth in construction output in October 2022 represents an increase of £123 million in monetary terms compared with September 2022, with 5 out of the 9 sectors seeing an increase on the month.

The increase in monthly construction output in October 2022 came from increases in both new work (0.5%) and repair and maintenance (1.3%) on the month (Figure 8). At the sector level, the main contributors to the increase in October 2022 were private new housing, and non-housing repair and maintenance, which increased by 2.9% and 1.7% respectively.

Anecdotal evidence shows continued increased prices for certain construction products, however, annual price growth has started to ease for many products from their high levels in mid-2022. This is shown in our Construction Output Price Index (OPI): Quarter 3 2022. New orders remain strong, as seen in our New orders in the construction industry Quarter 3 2022 dataset, which saw a 6.4% quarterly increase.

Further detail on construction output growth rates, can be found in our Construction output in Great Britain: October 2022 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.

There was anecdotal evidence to suggest that industrial action in October 2022 had an impact on businesses. Rail strikes resulted in units in accommodation, and food and beverage service activities, reporting a reduction in their revenue. However, units involved in bus transport reported that the strikes had led to an increase in their turnover. The port strikes were also reported as having had an impact, with units in haulage, logistics and shipping, employment agencies, and manufacture of machinery reporting that they had led to a reduction in their turnover. Postal strikes were also mentioned, with units in courier activities and employment agencies reporting an upturn in their revenue.

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: October 2022
• Index of Production, UK: October 2022
• Index of Services, UK: October 2022

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 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 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 data 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.

We are 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

For the State Funeral of Queen Elizabeth II there was an additional bank holiday on 19 September 2022. This led to one fewer working day in September 2022. This should be considered when interpreting the movements involving September 2022. Previous experience of additional, or substitute, bank holidays in 2002 and 2012 highlighted that such events might lead to more volatile movements in the monthly path of GDP.

As part of our usual seasonal adjustment practice, prior adjustments are made for calendar effects (where statistically significant), such as returns that do not comply with the standard trading period, regular bank holidays, and Easter. Adjustments for repeating and predictable effects are estimated and removed from the final seasonally adjusted series, for example, a permanent change in the seasonal pattern. Adjustments for effects that do not repeat are estimated and removed during the seasonal adjustment process, but are then put back into the final seasonally adjusted series, for example, the effect of extreme weather or one-off quantifiable events.

The additional bank holiday in September 2022 is not regular, so there was not an explicit adjustment to account for it as part of the seasonal adjustment process. However, indirectly, the timing of the bank holiday will affect the number of trading days in the period where it falls. There is likely to be some impact on our GDP estimates (positive or negative depending on the sector) in September 2022 because of the additional bank holiday. This is an ad hoc effect, so it did not get removed from our GDP seasonally adjusted estimates.

In our figures, we reviewed the trading day patterns of all industries, considering the timing of the additional bank holiday, ensuring the genuine activity from the bank holiday was reflected in our published GDP seasonally adjusted estimates. We will continue to review our seasonal adjustment parameters on a regular basis.

Users are therefore likely to find an effect related to one fewer working day in September in the seasonally adjusted series. Caution should be taken when interpreting the seasonally adjusted movements involving September 2022.

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.