UK GDP fell 0.1% in the second quarter, the first contraction in more than a year
UK gross domestic product (GDP) is estimated to have fallen by 0.1% in Quarter 2 (Apr to June) 2022, based on the first estimate.
In output terms, services fell by 0.4% and are now 1.1% above pre-coronavirus (COVID-19) pandemic levels. The largest negative contributions to services output resulted from human health and social work activities, and wholesale and retail trade.
There was partially offsetting positive contributions from accommodation and food service activities, and other service activities.
There was a 5.4% fall in human health and social work activities, reflecting a large reduction in coronavirus activities, such as NHS Test and Trace, COVID-19 vaccination programme and lateral flow orders over the second quarter.
There was a 1.0% fall in wholesale and retail trade. The Business Insights and Conditions Survey (BICS) highlighted that around 32% of businesses within the wholesale and retail trade industry reported global supply chain disruptions at the end of the second quarter of 2022.
Despite an increase of 1.6% in the wholesale and retail of cars, this industry remains 1.9% below pre-coronavirus pandemic levels. The Society of Motor Manufacturers and Traders (SMMT) noted that the ongoing shortages in component supply and restrictions in China have hampered the global vehicle production ability to fulfil demand in the second quarter of 2022.
The fall in services output was partially offset by increases in output from accommodation and food services (4.7%), driven by increases in accommodation and in food and beverage service activities reflecting rises in mobile food stands and takeaway food shops.
There were positive contributions from consumer-facing services, such as other service activities (travel agencies and tour operators did particularly well as COVID-19 restrictions eased on the tourism industry), accommodation and food service activities, and arts, entertainment and recreation activities.
There was a 0.2% decrease in real household consumption in Quarter 2 2022, offset by a positive contribution from net trade.
Also, monthly estimates show that GDP fell by 0.6% in June 2022, following a downwardly revised 0.4% increase in May (the Platinum Jubilee and the move of the May bank holiday led to an additional working day in May 2022) and two fewer working days in June 2022, although this impacted on monthly GDP, there was little impact on the quarterly estimates.
Production output rose by 0.5% a slowdown compared with the previous quarter when it increased by 1.3%, while the level of production output remains 1.2% below pre-pandemic levels.
The quarterly rise in production output was driven by a rise in electricity, gas, steam and air conditioning supply (2.7%), resulting from growth in the manufacture of gas; and electric power generation, transmission and distribution.
There was a 0.3% fall in mining and quarrying output in Quarter 2 (Apr to June) 2022, following a reduction in mining support service activities.
Overall growth in manufacturing was broadly flat, however there were falls in 7 of the 13 manufacturing sub-sectors. The largest contributor to the fall in manufacturing was in manufacture of chemicals and chemical products.