COVID-19 SERVICE: We are heightening our efforts to assist the UK retail & leisure industry through this challenging period. Explore this service now… COVID-19 SERVICE

GDP Q4 2020 First Estimate

Headlines:

  • Annual GDP fell by 9.9% in 2020, the largest yearly decline on record. The widespread economic impact caused by COVID-19 is reflected in the fact that all four sub-sectors saw sharp declines in output: services fell by 8.9%, production fell by 8.6%, construction fell by 12.5% and agriculture fell by 9.4%.
  • GDP grew by 1.0% in Q4 2020 (Oct-Dec), following on from the record 16.1% growth recorded in Q3. Despite two consecutive quarters of growth, UK GDP remains 6.6% below where it was in Q4 2019, prior to the pandemic.
  • On a monthly basis, GDP increased by 1.2% in December, above market expectations of 1.0%. This follows a revised 2.3% decline in November, as a second national lockdown weighed on economic activity.
  • During December, a period of eased restrictions early in the month was followed by tighter restrictions across all UK regions over the second half of the month.
  • December’s growth means the UK is likely to avoid a double-dip recession (two recessions within a short period of time).

GDP growth in 2020 fell by 9.9%, returning close to 2013 levels

Source: ONS

GDP breakdown by sector

  • In Q4 2020, the services sector saw the weakest growth (+0.6%) due to the comparatively higher restrictions on consumer facing industries that were in place in November. Meanwhile, Construction rose by 4.6% and Production by 1.8% in the final quarter.
  • Within the services sector, accommodation and food services fell by 32.8% in Q4 2020, due to the reintroduction of restrictions in most parts of the UK in November 2020. 
  • The services sector saw a partial recovery in December and acted as the main contributor to GDP growth over the month, increasing by 1.7% on November. The services sector is now 6.9% below the level of February 2020.
  • Service industries in December benefited as restrictions were eased at the start of the month. The re-opening of non-essential retail and food service activities boosted consumer demand for pubs and restaurants, motor vehicles and personal services such as hairdressers. The Health sub-component also grew strongly in December (+2.4%), mainly due to increased activity from coronavirus testing and tracing schemes across the UK.
  • The Production sector grew marginally by 0.2% in December 2020, while the Construction sector acted as a drag on growth, falling by 2.9% in December following seven consecutive monthly increases.

Source: ONS

Back to Retail Insights



Why get a FREE TRIAL?
  • It's free for 30 days
  • Download a great selection of reports
  • No obligation
  • No credit card details
  • Cancel at anytime
  • No hassle
  • Excel with our RETAIL INSIGHT
START MY FREE TRIAL >