GDP Q2 2021

UK GDP increased by 4.8% in Q2 2021 as restrictions eased, and is now 4.4% below its pre-pandemic level

Source: ONS

GDP

UK GDP increased by 4.8% quarter-on-quarter in Q2 2021 (April-June), as most businesses emerged from lockdown and consumers splashed out following the easing of Covid-19 restrictions.
The level of economic activity in the UK is now 4.4% below where it was prior to the pandemic at the end of 2019.
On a month-on-month basis, GDP rose by 2.2% in April, 0.6% in May and 1.0% in June. Health services and a resurgence in hospitality were the main drivers of growth in June.

By Sector:

Services

The services sector continues to the main contributor to the economic recovery, expanding by 5.7% in Q2 2021, fuelled by the re-opening of retail and indoor hospitality.
Within the services sector, accommodation and food services surged by 87.8% in Q2 2021, while wholesale and retail trade increased by 12.8% over the same period.
Pent-up demand for socialising, warmer weather and Euro 2020 were all key growth drivers for retail and hospitality, as these consumer-facing industries grew by a combined 16.7% in Q2 2021.
Services output is now 3.5% below Q4 2019 levels before the pandemic began, with travel and transport acting as the main drag on the service sector recovery.
In June, activity in the services sector rose 1.5% month-on-month (MoM). Health made a strong contribution, as visits to GPs increased and the vaccine rollout continued apace. Hospitality also benefitted from its first full month of indoor dining since Covid-19 restrictions were eased. Food and beverage services grew 10.1% MoM in June.

Manufacturing

Manufacturing output rose by 1.8% in Q2 2021, driven mainly by increased production of food and beverages, and machinery and equipment.
The production of motor vehicles fell by 16.7% in Q2 2021, its second consecutive quarterly fall, as a global semiconductor shortage affected the production of new cars. Output in the manufacture of motor vehicles remains 24.6% below its pre-pandemic level (Q4 2019).
In June, the manufacturing sector remained broadly flat, growing by 0.2% MoM. Eight out of the 13 manufacturing sub-sectors grew with the largest positive contribution coming from the manufacturing of transport equipment (+7.4%), which picked up following a weak May.

Construction

The Construction sector grew by 3.3% in Q2 2021, reflecting a quarter-on-quarter rise in new work (+3.7%) - most notably infrastructure projects - and repair and maintenance (+1.7%).
On a monthly basis, the Construction sector declined in April (-0.2%), May (-0.7%), and June (-1.3%), as firms reported limited availability of construction materials, including timber, steel, cement and tiles. However, output still rose on a quarterly basis, as construction activity was hit in Q1 2021 by the third national lockdown.
Construction output is close to returning to pre-pandemic levels, now at 0.6% below the level it was in Q4 2019

Household consumption

Household consumption increased by 7.3% in Q2 2021, following a fall of 4.6% in the previous quarter.
Spending on restaurants and hotels, and transport, all performed strongly with the reopening of the economy. This was partly offset by a fall in food and drink consumption expenditure, as in-store food sales were negatively affected in May as consumers preferred to dine out following the relaxation of hospitality restrictions.
Compared to pre-pandemic levels, household consumption is now 7.0% lower than in Q4 2019.