GDP Q1 2022 Preliminary Estimate

GDP rose across Q1 2022, but monthly data shows a softening from February

Source: ONS

Headline GDP

UK GDP is estimated to have increased by 0.8% QoQ in Q1 2022 (Jan to Mar), and by 8.7% YoY. This is 0.7% above its pre-coronavirus level (Q4 2019).
Growth in Q1 2022 came on the back a strong performance in January as restrictions eased, with the economy being hit more recently by global supply chain disruption.
On a monthly basis, GDP fell by 0.1% in March 2022, after no growth in February (revised down from 0.1% growth) and a 0.7% rise in January.

GDP breakdown by sector

Services

Services output rose by 0.4% in Q1 2022 and by 9.9% compared with Q1 2021. It is now 1.4% above pre-coronavirus pandemic levels.
On a monthly basis, services declined 0.2% in March, dragged down by a large decrease (-15.1%) in the wholesale and retail trade and repair of motor vehicles and motorcycles industry.
Across the quarter, there were a number of upward and downward contributors. On the upside, services benefited from a recovery from the impact of Covid-19 restrictions across accommodation and food services (+5.1% in Q1 2022 vs Q4 2021), transport and storage (+3.6%), employment agencies and travel agencies (administrative and support service activities rose by 2.8%). There was also strong growth in information and communication (+3.6%).
But on the downside, retailing, wholesaling and car sales have come under pressure amid global supply chain challenges (-2.3% across wholesale and retail trade, and repair of motor vehicles and motorcycles in Q1). Additionally, health is under pressure from continuing decreases in the NHS Test and Trace service and vaccination programmes (human health and social work activities fell by 1.8% in Q1).

Production

Production output rose by 1.2% in Q1 2022, but is 1.8% below its pre-pandemic level, partially because of supply chain challenges. On a monthly basis, services declined by 0.2% in March.
The rise in output across Q1 was primarily driven by an uplift in manufacturing output (+1.3%). There were large increases in the manufacture of basic metals and metal production (+8.4%), other manufacturing and repair (+5.3%), and manufacture of food products, beverages and tobacco (+2.6%).
However, this was partly offset by the manufacture of basic pharmaceutical products and pharmaceutical preparations (-12.9%).

Construction

Construction output increased by 3.8% in Q1 2022 – 1.9% above pre-pandemic levels. On a monthly basis, construction output increased by 1.7%.
On a quarterly basis, new work and repair and maintenance (2.8% and 5.5% respectively) contributed to the quarterly growth, in part following repair work after the February storms.

Household consumption

In Q1, household consumption rose by 0.6%, but remains 0.5% below pre-coronavirus levels.
The quarterly increase was driven by spending on restaurants and hotels, clothing and footwear, and miscellaneous goods and services. This was partially offset by net tourism and transport, mainly because of a fall in expenditure on cars.