Forecasts show that real GDP in the UK will grow by 0.9% in the three months to May 2024, compared to the three months to February 2024. This represents the strongest growth rate in a three-month period since January 2022.
Factors affecting growth: The resulting services: was the main contributor to this growth, with an increase of 1.1% in the mentioned period. Output production: No growth was shown. The construction sector: witnessed a decrease of 0.7%.
Economic Life: Real GDP is expected to grow by 0.4% in May 2024, after recording no growth in April 2024. This statistical bulletin includes April 2024 data for the first time, in addition to the maximum revision from January 2024 to March 2024, including Consistent with quarterly national GDP calculations.
Importance of revisions: It should be noted that preliminary estimates of GDP are often subject to revision, either positive or negative, based on new and updated data. The UK’s adjusted GDP shows positive signs of growth, with an increase in the services sector, while other sectors such as construction face some challenges. Monthly growth forecasts and preliminary estimates may be based on future revisions.
Monthly GDP estimates from ONS: The three main sectors contributed positively to GDP growth in May 2024. Services output grew by 0.3% in May 2024 and was the largest contributor to GDP growth during the month. Production and construction output also increased by 0.2% and 1.9%, respectively.
Longer-term growth forecast for UK GDP Real GDP is expected to grow by 1.0% in the three months to May 2024 compared to the three months to May 2023. For May 2024, growth is 1.4% compared to the same month of the year the past.
The impact of a bank holiday on adjusted GDP
When looking at growth until May 2023, we must take into account that an additional bank holiday may have affected the numbers. On Monday 8 May 2023, a bank holiday was declared for the coronation of King Charles III. There was no explicit adjustment for this temporary event in the estimates, although adjustments were made for normal calendar effects.
Indirect impact of the bank holiday: The timing of the bank holiday can affect the number of trading days, which in turn may positively or negatively impact the high local estimates on the sector. For example, some sectors may consider an increase in activity due to a holiday, while other functions may result in a reduced number of working days. The picture for longer-term growth of the UK’s micro-GDP shows excellent signs, although programs for some events such as a bank holiday for the coronation of the King. Regular calendar adjustments take these adjustments into account, but they may not fully affect economic growth.
UK service sector model until May 2024
Services sector performance in the three months to May 2024 The services sector is expected to grow by 1.1% in the three months to May 2024 compared to the three months to February 2024. The services sector is expected to grow by 1.1% in the three months to February 2024. Among the sub-sectors For this strongest growth since December 2021, 10 of the 14 sub-sectors saw growth during this period.
The main contributors to the growth of the services sector: Professional, scientific and technical activities: increasing by 2.5%, which is the largest contribution to the increase in the resulting services. Administrative activities and support services: witnessed a growth of 3.2%. Human health and social work activities: output increased by 1.7%.
Monthly growth of the services sector and monthly contributions
On a monthly basis, services output is expected to grow by 0.3% in May 2024, in line with the growth recorded in April 2024 which was revised from 0.2% to 0.3%. This represents the fifth consecutive monthly growth in resulting services, with 8 of the 14 growth subsectors to be implemented in May 2024.
Projected monthly and tri-annual contributions of the services sector to GDP in May 2024: Monthly and tri-annual contributions of the services sector to micro-GDP, reflecting the sector’s continued expansionary performance in the UK economy.
Production sector: It is estimated that production output did not show any growth in the three months to May 2024 compared to the three months to February 2024. This was offset by 1.0% growth in gas, electricity, steam, and air-conditioning supplies, 0.6% growth in mining and quarrying, and growth by 1.5% in water supply, sanitation, waste management and treatment activities, through a 0.3% decline in manufacturing.
Production output is expected to grow by 0.2% in May 2024, after an unrevised decline of 0.9% in April 2024. The largest contribution to growth in May 2024 was 0.4% growth in manufacturing. Water supply and sanitation, waste management and treatment, and mining and quarrying also grew by 0.4% and 0.1%, respectively.
Electricity, gas, steam and air-conditioning supply production decreased by 1.9% in May 2024, following 0.5% growth in April 2024, with a 2.0% decline in electric power generation, transmission and distribution and a 1.4% decline in gas manufacturing; Distribution of gaseous fuel through the main network; Steam supply and air conditioning.
Mining and quarrying production recorded growth of 0.1% in May 2024, following growth of 0.9% in April 2024. Growth in May 2024 was driven by a 3.8% monthly rise in other mining and quarrying activities.
