UK economy sees 0.3% slowdown in August

The production sector’s fall of 1.8% was the main driver of this, with services falling by 0.1%. in contrast, construction grew by 0.4%, this being its second consecutive increase after growth of 0.1% in July. 

There’s also been a slowing of the underlying three-month on-three-month growth, where GDP fell by 0.3%, with a fall of 1.5% in production and 0.1% in services, while there was flat growth in construction. 

Year-on-year monthly GDP, however, grew by two percent between August 2021 and August 2022, although this was down from the 3.1% seen between July 2021 and July 2022. 

Broken down by sector, GDP in services fell by 0.1%, with human health and social work activities contributing 1.3% to this drop. This was entirely driven by human health activities, which fell by 1.9%. 

Arts, entertainment and recreation saw a fall of five percent, almost entirely driven by sports, amusement and recreation activities - which fell by 9.4%. There was also a seven percent fall in libraries, archives, museums and other cultural activities. 

These falls were offset by a rise in professional, scientific and technical activities of 1.2% - after two consecutive falls. This sub-sector saw growth in all eight industries. 

Consumer-facing services saw output fall by 1.8%, following a growth of 0.7% in July. Consumer-facing services were also 8.9% below their pre-Covid levels. 

Production output fell by 1.8%, with negative growth in three of the four sectors. 

Manufacturing was the main driver of negative production growth, falling by 1.6% on the previous month. There were notable falls in the development of basic pharmaceutical products and preparations - down six percent - the manufacture of transport equipment - down three percent - and the manufacture of basic metals and metal products - down 2.8%. 

In contrast, the manufacture of chemicals and chemical products saw a growth of 1.1% and made the largest positive contribution to manufacturing. As for the production of transport equipment, the manufacture of motor vehicles, trailers and semi-trailers accounts for most of the fall - dropping by 6.2%. 

Meanwhile the development of basic iron and steel was the main driver within the manufacture of basic metals and metal products, falling by 16.9% on the previous month. 

Mining and quarrying was the second-largest contributor to negative production growth - falling by 8.2%. This was driven by the extraction of crude petroleum and natural gas, which decreased by 10.6% as a result of more planned maintenance than usual. 

In contrast, monthly construction output increased by 0.4% - with this being the second consecutive growth following the upwardly revised increase to 0.1% in July. This 0.4% growth came solely from an increase in new work - 1.9% - as repair and maintenance saw a decrease of two percent on the previous month. 

At the sector level, the main contributors to the increase seen in August were infrastructure, private industrial and private housing new work - increasing by 5.3%, 4.3% and 1.7% respectively.