Commentary Directory

UK Monthly GDP: July 2023

Jacob Hess
September 13, 2023

UK Monthly GDP

9/13/2023 (July 2023)

-0.5% MoM

Below Expectations

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Services Output -0.5% MoM
Consumer-facing Services Output 0.0% MoM
Industrial Production -0.7% MoM
Construction Production -0.5% MoM

UK GDP is estimated to have fallen -0.5% MoM in July, reversing growth of 0.5% MoM in June. All three segments made negative contributions with the services sector weighing the most on GDP growth. Specifically, services output was down -0.5% MoM. The industry that made the largest impact in July was the human health and social work industry which contracted by -2.1% MoM as strikes from medical doctors caused thousands of appointments to be cancelled. Consumer-facing services showed no growth on the month. Industrial production fell -0.7% MoM after strong growth of 1.8% MoM was recorded in June. Manufacturing production specifically fell -0.8% MoM. Nine of the thirteen subsectors saw a contraction during the month. The expansion of crude oil and natural gas production offset some of this decline causing mining and quarrying production to increase 1.9% MoM. Adding to the decline of the industrial sector was a -0.5% MoM decline in the construction sector.

From ONS

The GDP decline in July was likely a result of some mean reversion after a strong June. Unfortunately, that sets the UK up for a weak start to Q3 with little reason to believe that growth can regain momentum in August and September. In the three months to July, GDP growth is still up 0.2% with a strong 0.6% increase if production. This figure is boosted by the June expansion which will fall off when results for Q3 2023 growth are reported.