GDP Q4 2020 First Estimate
- 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
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.
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