Preliminary data published by the Office for National Statistics (ONS) showed that UK GDP grew by 0.6% in the first three months of 2024 after falling by 0.3% in the fourth quarter of 2023. This was the strongest growth since the 4th quarter of 2021. Economists had expected the economy to expand by 0.4%. The growth in the latest quarter was driven by a 0.7% increase in services output. Services output increased for the first time since Quarter 1 2023. The largest contributor to the growth in service output was a 3.7% increase in the transport and storage subsector. This was largely driven by growth of 6.4% in land transport services via pipelines (excluding rail transport). This industry saw its highest quarterly growth rate since Quarter 3 2020. Consumer-facing services grew by 0.6% in Quarter 1 2024, following a fall of 0.4% in Quarter 4 2023, and this was largely driven by retail trade, except of motor vehicles and motorcycles. Meanwhile, production output increased by 0.8% after a fall of 1.1% in Quarter 4 2023. Within production, manufacturing was the largest contributor with 8 out of the 13 manufacturing subsectors performing positively in the latest quarter. Manufacturing output is estimated to have increased by 1.4% in Quarter 1 2024 following a fall of 1.0% in Quarter 4 2023. The largest positive contributor was a 5.7% increase in the manufacture of transport equipment, which has grown for six consecutive quarters. Construction output is shown to have fallen by 0.9% in Quarter 1 2024 following a decline of 0.9% in the previous quarter.
In annual terms, GDP grew by 0.2%, offsetting a decline in the 4th quarter (-0.2%). Consensus estimates suggested that GDP would remain unchanged.
Meanwhile, monthly estimates show that GDP increased by 0.4% in March, accelerating compared to February (+0.2%, revised from +0.1%). Economists had expected GDP to grow by 0.1%. Services output grew by 0.5%, following growth of 0.3% in February (revised up from +0.1%), and grew by 0.7% in the three months to March 2024. Services output was the largest contributor to the growth in GDP on both the month and the three months to March 2024. Production output grew by 0.2% in March, following growth of 1.0% in February 2024 (revised down from 1.1%), and grew by 0.8% in the three months to March 2024. Construction output fell by 0.4% in March, following a fall of 2.0% in February (revised down from a -1.9%), and fell by 0.9% in the three months to March 2024.