GDP monthly estimate, UK: May 2018
Gross domestic product (GDP) measures the value of goods and services produced in the UK. It estimates the size of and growth in the economy.
Release date: 10 July 2018
UK GDP grew by 0.2% in the three months to May
GDP growth, quarter-on-quarter and three-months on previous three-months
Source: Office for National Statistics
The first of our new rolling estimates of GDP shows a mixed picture of the UK economy with modest growth driven by the services sector, partly offset by falling construction and industrial output.
Services, in particular, grew robustly in May with retailers enjoying a double boost from the warm weather and the royal wedding.
Rob Kent Smith, Head of National Accounts
Sections
Summary
Growth in the three months to May was higher than growth in the three months to April, which was flat. The weakness in growth in the three months to April was largely due to negative drag on GDP from construction.
Retailing, computer programming and legal services all performed strongly in the three months to May while manufacturing contracted. Construction also saw a return to growth after a weak couple of months.
GDP growth driven by services, with falls in construction and production
Contribution to three-months on previous three-months GDP growth
Source: Office for National Statistics
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Growth of 0.4% in the services industries in the three months to May had the biggest contribution to GDP growth.
However, contraction in the production and construction industries meant that they each had negative contributions to GDP.
Agriculture had no contribution to overall GDP growth.
Three-month growth up from flat growth seen in the three months to April
Output gross value added (GVA) growth, three-months on previous three-months
Source: Office for National Statistics
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Rolling three-month growth has slowed since January, however, the growth rate increased in the three months to May 2018.
Rolling three-month growth is based on output gross value added (GVA) and therefore there will be discrepancies in the time series with our quarterly estimates of GDP, which include information on the expenditure and income approaches to measuring GDP.
GDP increased by 0.3% in May
The monthly GDP growth rate was flat in March, followed by growth of 0.2% in April. Overall GDP growth was 0.3% in May.
The monthly growth rate for GDP is volatile and therefore it should be used with caution and alongside other measures such as the three-month growth rate when looking for an indicator of the long-term trend of the economy.
| March 2018 | April 2018 | May 2018 | |
|---|---|---|---|
| GDP | 0.0% | 0.2% | 0.3% |
| Index of Services | 0.2% | 0.4% | 0.3% |
| Index of Production | -0.3% | -1.0% | -0.4% |
| Construction | -1.8% | 0.0% | 2.9% |
| Agriculture | -0.2% | 0.1% | 0.2% |
Source: Office for National Statistics
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Retail and wholesale drove growth in services
Growth, three-months on previous three-months
Source: Office for National Statistics
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The services industries experienced growth of 0.4% in the three months to May. Growth in consumer-facing industries (for example retail, hotels, restaurants) has been slowing over the past year. However, in the three months to May growth in these industries picked up, particularly in wholesale and retail trade.
This industry grew by 0.9% in the three months to May and contributed 0.1 percentage points to headline GDP. This was driven by high growth in the months of April and May, with the latter relating to the good weather seen at the time, as reported in Retail sales, Great Britain: May 2018.
Weak manufacturing pulled production growth down
Growth, three-months on previous three-months
Source: Office for National Statistics
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Manufacturing growth in the three months to May of negative 1.2% contributed negative 0.12 percentage points to headline GDP. This was the third consecutive fall in manufacturing, and was driven by weak exports (see UK index of production: May 2018).
Mining and quarrying grew by 4.6% in the three months to May. This is despite a May growth figure of negative 4.6%, which was in part due to the Sullom Voe oil and gas terminal shutdown. Electricity and gas supply contracted by 0.5%, likely due to the warmer weather in this period.
Weak activity in March was a drag on three-month construction growth
Growth, three-months on previous three-months
Source: Office for National Statistics
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Construction growth decreased by 1.7% in the three months to May, despite a growth rate of 2.9% in the month of May (see Table 1).
This contraction continues from negative growth in the previous two three-month on three-month periods, and contributed negative 0.1 percentage points to headline GDP.
The largest contributors to growth were private housing repair and maintenance and private housing new work (see Construction output in Great Britain: May 2018).
Data
All data used in this bulletin are seasonally adjusted estimates (they take into account the changes we see in the data every year, as a result of public holidays, for example).
Data are in chained volume estimates, which means they have had the effect of price changes removed (in other words, the data are deflated).
This bulletin is designed to give an overview of the latest data on the economy. More granular information is available in the Index of Services, Index of Production, and Construction bulletins.
To provide data for the European Union’s flash GDP estimate, UK data will be sent to Eurostat (the statistical office for the European Union) for the three months to June. These data will assume that the average growth rate calculated based on April and May 2018 data from this release continues into June.
Need to know
Contact
James Scruton
gdp@ons.gsi.gov.uk
Telephone: +44(0)1633 456724