GDP monthly estimate, UK: October 2023

• Monthly real gross domestic product (GDP) is estimated to have shown no growth in the three months to October 2023, compared with the three months to July 2023.

• Monthly GDP is estimated to have fallen by 0.3% in October 2023, following growth of 0.2% in September 2023.

• Services output fell by 0.2% in October 2023, driven by a fall in information and communication, and was the main contributor to the fall in growth in GDP; this follows growth of 0.2% in September 2023.

• Production output fell by 0.8% in October 2023, driven by widespread declines in manufacturing, after showing no growth in September 2023.

• The construction sector fell by 0.5% in October 2023 after growth of 0.4% in September 2023.

Monthly real gross domestic product (GDP) is estimated to have shown no growth in the three months to October 2023 when compared with the three months to July 2023. Services output grew by 0.1%, production output fell by 0.7% and construction fell by 0.3% over the same period.

Monthly GDP is estimated to have fallen by 0.3% in October 2023, following growth of 0.2% in September 2023.

This release provides data for October 2023 for the first time and no earlier periods are open for revision.

Output in the services sector fell by 0.2% in October 2023 and was the largest contributing sector to the contraction in monthly GDP. Production and construction output both fell on the month, by 0.8% and 0.5%, respectively.

Monthly GDP grew by 0.3% in October 2023 compared with the same month last year. For comparison, monthly GDP grew by 1.3% between September 2022 and September 2023. In September 2022, there was an additional bank holiday for the State Funeral of Her Majesty Queen Elizabeth II and many businesses closed or operated differently on this day. This should be considered when interpreting seasonally adjusted movements involving September 2022.

Overall, the services sector is estimated to have grown by 0.1% in the three months to October 2023 compared with the three months to July 2023. The largest contributors to the growth in services over the three months were professional, scientific and technical activities and education, which grew by 1.2% and 1.1%, respectively.

On the month, services output is estimated to have fallen by 0.2% in October 2023 following growth of 0.2% in September 2023. Figure 3 shows the monthly contributions from the services sector to gross domestic product (GDP) in October 2023.

The main driver to the 0.2% fall in the services output was information and communication, which fell by 1.7% in October 2023, following growth of 0.4% in September. Looking at the three months to October 2023, compared with the three months to July 2023, information and communication saw a fall of 0.3%.

Five of the six industries in the information and communication subsection fell in October 2023, with the largest contributions coming from computer programming, consultancy and related activities, as well as motion picture, video and TV production.

Professional, scientific and technical activities fell by 0.7%, with falls in five out of the eight industries. Legal activities was the largest contributing industry, falling by 2.8% in October 2023.

These falls were partially offset by growth in administrative and support service activities, which grew by 0.7% in October 2023. This was driven by growth of 1.4% in rental and leasing activities.

Human health and social activities work grew by 0.4% in October 2023, driven by a growth of 0.5% in human health activities. There were three days of coordinated industrial action by junior and senior doctors in October 2023, where NHS England news reported that 118,026 appointments were rescheduled. This is less than the four days of strikes in September 2023, where another NHS England news article reported that 129,913 appointments were rescheduled. The number of coronavirus (COVID-19) vaccinations also increased in October 2023 compared with the previous month, as the latest vaccination campaign peaked.

An overview of data sources used in our estimates of service output can be found in our data sources catalogue. The monthly business survey (MBS) is used for 42.9% of the services sector by industry weight. In October 2023, the turnover response rate for the MBS element of the services sector was 85.6%. We would expect this to increase over time as more responses are received and any new data will be included in future monthly GDP releases. For context, the average turnover response rate for the service sector in 2022 now stands at 97.0%.

Consumer-facing services

Output in consumer-facing services fell by 0.1% in October 2023, and remains 5.0% below pre-coronavirus pandemic levels (February 2020), while all other services were 7.2% above (Figure 4). The largest negative contributions in October 2023 came from other personal service activities, which fell by 2.3%.

The largest positive contributions to consumer-facing services in October 2023 came from wholesale and retail trade and repair of motor vehicles and motorcycles, which grew by 2.2% on the month.

Consumer-facing services were 5.0% below their pre-pandemic levels (February 2020) in October 2023, with 10 of 13 industries lower (Figure 5). Within consumer-facing services, the largest contributor to this lower level in October 2023, compared with February 2020, is buying and selling, renting and operating of own or leased real estate, excluding imputed rent where output is 9.8% lower.

Figure 5: 10 of 13 consumer-facing service industries remain below their pre-coronavirus (COVID-19) pandemic levels (February 2020) in October 2023

Monthly consumer-facing services index, January 2019 to October 2023, UK

Notes:

1. Condensed industry titles are used for presentation purposes. For full titles, see our Consumer-facing services industry classification subsection in Section 9: Measuring the data.

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

Production output is estimated to have fallen by 0.7% in the three months to October 2023 compared with the three months to July, driven by a fall of 0.9% in manufacturing. Electricity, gas, steam and air conditioning supply fell by 0.5%, mining and quarrying grew by 1.2% and water supply, sewerage, waste management and remediation activities grew by 0.1% over the same period.

On the month, production output is estimated to have fallen by 0.8% in October 2023, driven by widespread declines in manufacturing output, following no growth in September and a fall of 0.5% in August.

Mining and quarrying output grew by 0.2% in October 2023 after a fall of 2.2% in September 2023. The growth in October was driven by a growth of 3.2% in other mining and quarrying.

Electricity, gas, steam and air conditioning supply fell by 1.8% in October for its fourth consecutive monthly fall in output. This fall was driven by a contraction of 3.2% in the electric power generation, transmission and distribution industry, which has also seen four consecutive monthly falls.

Water supply, sewerage, waste management and remediation activities grew by 1.6% mainly driven by growth of 2.5% in sewerage activities.

Manufacturing fell by 1.1% in October 2023 with widespread falls in 10 of the 13 subsectors. The largest negative contributions in October came from a 2.5% fall in manufacturing of computer, electronic and optical products, and a 3.0% fall in manufacture of machinery and equipment not elsewhere classified (N.E.C.) in the month. The largest offsetting positive contributor in manufacturing was the manufacture of transport equipment, which grew by 0.4% in October 2023 (Figure 7).

The monthly business survey (MBS) is used for 75.9% of the production sector by industry weight. In October 2023, the turnover response rate for the MBS element of the production sector was 84.9%. We would expect this to increase over time as more responses are received and any new data will be included in future monthly gross domestic product (GDP) releases. For context, the average turnover response rate for the production sector in 2022 now stands at 96.9%. A full set of data sources used in monthly GDP can be found in our data sources catalogue.

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

Construction output is estimated to have fallen by 0.3% in the three months to October 2023 compared with the three months to July 2023. New work decreased by 2.0% over the period, while repair and maintenance rose by 2.2%. Within new work, the largest contributor to the decrease came from private new housing, which decreased by 4.6%.

In October 2023, monthly construction output is estimated to have decreased 0.5% in volume terms. This follows a 0.4% increase in September 2023.

The decrease in monthly output in October 2023 came solely from a decrease in new work (1.7% fall), with repair and maintenance increasing (1.3%) on the month. Three out of the nine sectors saw a decrease on the month.

At the sector level, the main contributors to the monthly decrease were private housing new work and private commercial new work, which decreased 5.2% and 1.2%, respectively.

Anecdotal evidence received from returns for our Monthly Business Survey (MBS) for construction and allied trades suggested an effect from heavy rainfall and strong winds. The Met Office confirmed in their Monthly weather report (PDF, 4.8MB) that in October 2023, England and Wales saw its third-wettest three-day period on record.

Construction data are sourced from our monthly business survey. For October 2023, the survey turnover response rate for construction was 75.1%. We would expect this to increase over time as more responses are received and any new data will be included in future monthly gross domestic product (GDP) releases. For context, the average turnover response rate in 2022 now stands at 93.4%.

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: October 2023 bulletin.

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

October 2023  had exceptionally wet weather, as detailed in the Met Office's October 2023 weather report (PDF, 4.8MB). This report stated that "this was provisionally the equal-sixth wettest October on record for the UK in a series from 1836". The wet period in October 2023 was cited as a negative factor from businesses, most notably in the construction, retail, pubs and tourism (outdoor recreation activities) sectors. For more information, see our Retail sales bulletin.

In services, we also had comments suggesting that the October half term affected recreation activities (amusement parks, museums, and theatres). While a regular seasonal event, it should be noted that, for some local authorities, part of the half term fell into November this year.

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

• Construction output in Great Britain: October 2023

• Index of Production, UK: October 2023

• Index of Services, UK: October 2023

The main data source for these statistics is the Monthly Business Survey (MBS) and response rates for each can be found in:

• our MBS (production) response rates dataset

• our Current and historical MBS (services) response rates dataset

• our Output in the construction industry dataset

Our monthly Gross domestic product (GDP) data sources catalogue provides a full breakdown of the data used in this publication.

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 estimate 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).

The coronavirus (COVID-19) 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 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.

Consumer-facing services industry classification

The industry breakdown used for consumer-facing services is based on the UK Standard Industrial Classification (SIC). In October 2023, we launched a 12-week public consultation on the UK adoption of industrial classification of economic activity.

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 and 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^th 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) have completed 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 2023, as announced on 6 September 2023. The outcome of this review can be viewed on the OSR website. This review covered:

• 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

We have already started work looking into the recommendations of this review and will set out plans more fully during January 2024.

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