GDP Q3 2022 Preliminary Estimate

GDP

UK quarterly GDP is estimated to have fallen by 0.2% in Q3 2022 (July to Sept).
On a monthly basis, GDP dropped by 0.6% in September, following a 0.1% fall in August and 0.1% growth in July
In Q3, services output was flat, production fell by 1.5% and construction rose by 0.6%.

GDP fell by 0.2 percentage points in the third quarter

Source: ONS

GDP breakdown by sector

Services

Services output saw flat growth in Q3 2022, slowing from the 0.2% increase on Q2.
On a monthly basis, services fell 0.6% in September, which was affected by the additional bank holiday to mark the state funeral, following growth of 0.1% in August and 0.5% in July.
As cost-of-living pressures impacted household disposable incomes, retail sales volumes fell by 1.9% in the three months to September 2022, while wholesale trade fell 1.4%.
Other service activities fell by 4.0% in Q3, reflecting a 7.0% fall in other personal service activities such as hairdressers.
Overall consumer facing services saw a fall of 0.8% in Q3, a slowing from the 1.2% increase in the previous quarter.

Production

Production output fell 1.5% in Q3 2022, which is the fifth consecutive quarter of contraction.
On a monthly basis, Production increased by 0.2% in September, the sectors first growth since May.
The latest quarterly fall in production output was driven mostly by a fall in manufacturing output of 2.3%.
The largest negative contribution came from the manufactures of basic metals and metal products and manufactures of chemicals and chemical products.
Anecdotally, some manufacturers suggested shortages of supplies, while other firms reported these challenges were easing.

Construction

Construction output rose by 0.6% in Q3 2022 but slowed on the previous quarter.
Construction firms continue to face challenges, including price pressures from construction inputs and products, labour market shortages and challenges to recruiting new staff.
Earlier in the quarter, businesses also reported challenging working conditions because of the heat and record-breaking temperatures.

Household consumption

In absolute terms, household consumption rose by 1.7% in Q3, but this reflects inflationary pressures.
Excluding the impact of inflation, real household expenditure fell by 0.5% in Q3, driven by falls in clothing and footwear, household goods and services, household furniture.
The implied price of household expenditure increased by 9.1% when compared with Q3 last year, which is the highest for more than three decades.