UK GDP grew in line with forecasts in October

According to the report from Office for National Statistics, with a backdrop of further national measures being introduced in response to the coronavirus pandemic, monthly GDP grew by 0.4% in October 2020. This is the sixth consecutive monthly increase following a record fall of 19.5% in April 2020.

October 2020 GDP is now 23.4% higher than its April 2020 low. However, it remains 7.9% below the levels seen in February 2020, before the full impact of the coronavirus pandemic.

In October 2020, the services sector grew by 0.2%, following growth of 1.0% in September. The services sector saw growth in 11 out of the 14 sub-sectors, however the accommodation and food service activities sub-sector acted as a drag on growth in October, falling by 14.4% as tightening coronavirus (COVID-19) measures had an adverse impact on activity and a subsequent lack of demand.

Production grew by 1.3% in October 2020, with manufacturing growing by 1.7%. The manufacturing sector saw 11 out of its 13 sub-sectors increasing following large falls across March and April 2020. The largest contribution was from the manufacture of transport equipment, which grew by 5.4% in October 2020. This is a result of growth from large businesses to meet increased demand, however, it is still 18.2% below its February 2020 level.

Despite growth in the latest month, production output is 4.4% lower than the level in February 2020, with manufacturing 6.6% lower.

Output in construction grew by 1.0% compared with the previous month following a record fall of 41.2% in April 2020. This is the sixth consecutive month of growth; it is important to note that since the record monthly growth of 21.8% in June, growth in construction output has slowed.

All components of repair and maintenance saw positive growth in October 2020 where some components of new work fell. The latest increase was driven by public other new work and non-housing repair and maintenance, which grew 7.5% and 5.1% respectively. Private new housing acted as a drag on growth in October, falling by 1.9%.