GDP Q4 2022 Preliminary Estimate

GDP

UK quarterly GDP is estimated not to have grown in Q4 2022 (Oct to Dec).
On a monthly basis, GDP dropped by 0.5% in September, following an unrevised growth of 0.1% in November 2022.
In Q4, services output was flat, production fell by 0.2% and construction grew by 0.3%.
The UK remains the only G7 economy in which GDP has not yet exceeded its pre-Covid peak.

UK economy failed to grow in the fourth quarter

Source: ONS

GDP breakdown by sector

Services

Services output saw flat growth in Q4 2022, slowing from a 0.2% increase in Q3.
On a monthly basis, services fell 0.8% in December, following growth of 0.2% in November.
Growth was seen in six out of 14 sub-sectors, with the largest positive contribution from administrative and support services, particularly travel agents, which increased by 14.8% in Q4 2022 following a fall in Q3.
This was largely offset by declines in education (1.6%) and transportation and storage output (2.4%). Within the transport and storage sub-sector, there were falls from postal and courier activities as well as rail transport, as both industries experienced strike action in Q4.
Although there was an increase in wholesale and retail trade; repair of motor vehicles and motorcycles on the quarter, retail trade declined over the period, as consumers cut back on spending because of increased prices.

Production

Production output fell 0.2% in Q4 2022 - the sixth consecutive quarter of contraction.
On a monthly basis, production increased 0.3% in December, after growth of 0.1% in November.
The latest quarterly fall in production output was driven mostly by declines in electricity, gas, steam and air conditioning supply (1.3%), and mining and quarrying (1.6%).
The manufacturing sector was broadly flat in Q4, with declines in 10 out of the 13 sub-sectors. The largest negative contributions came from the manufacture of chemicals; and basic metals and metal products.
These falls were offset by increases in the manufacture of pharmaceutical products and preparations, and the manufacture of transport equipment.

Construction

Construction output rose by 0.3% in Q4 2022 but slowed from the first half of the year.
The main positive contributions came from infrastructure (6.5%), marking the first positive quarterly growth in the sector since Q3 2021.
The main negative contributions came from private housing (both new work and R&M), with both seeing quarterly falls of 3.2% and 3.5% respectively.

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.