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ONS: All headline sectors made negative GDP contribution in three months to April

Jessica Bird

June 12, 2020

gdp contribution

UK gross domestic product (GDP) fell by 10.4% in the three months to April 2020, during which time all headline industry sectors provided a negative contribution, according to the Office for National Statistics (ONS).

Growth in the services sector fell by 9.9% during this period, construction by 18.2%, financial and insurances by -1.5%, and real estate by 0.4%.

In terms of contribution to the whole economy, the services sector fell by 7.94%, construction by 1.13%, financial and insurances by 0.1% and real estate by 0.05%.

Monthly GDP fell by 20.4% in April, the biggest monthly fall since the series began in 1997.

In April, the construction sector saw the largest monthly fall (-40.1%) since the series began in 2010.

This fall was caused by private housing, which fell 28.3%, and private commercial which fell 19.6%.

Fraser Johns, finance director at construction firm Beard, said: “The huge 40% drop in construction output in April reveals the full impact of COVID-19, coming on the back of a smaller, but still significant, 6% fall in March.

“Private housing fell 60% month-on-month, but there were record declines in all types of work.

“The ONS figures show that in the three months from February to April, construction saw a decline of 18.2% – the largest fall of any major sector of the economy.

“Recovering from this sort of setback will be no simple matter.

“The clear steer from government that the construction sector should get back to work, coupled with the strong guidance from the Construction Leadership Council in terms of how to achieve that safely, means that the industry is in a good position to recover quickly.

“Recent [Purchasing Managers’ Index (PMI)] data has suggested that this is already beginning to happen.

“Beard has been able to keep more than 90% of sites operational throughout the crisis, and now has 100% up and running.

“One recent report has indicated that 97% of sites industry-wide are now operational again. This is hugely encouraging.

“As firms adapt to the new circumstances in which we all find ourselves operating, we now need to continue to find ways of delivering more efficiently.

“The crisis gives us all an opportunity to improve ways of working and modernise outdated practices, so that ultimately the industry may emerge stronger from the crisis.”

Alastair George, investment strategist for Edison Group, said: “This is a truly historic rate of GDP contraction but not a surprise.

“The risk has been that central banks have almost been too effective in supporting markets, masking the economic cost of lockdowns as well as dimming employment and training prospects for younger people less at risk from COVID-19.

“These will be important figures to frame the debate on the government’s lockdown policy for the remainder of the year.”

Ross Counsell, chartered surveyor and director at Good Move, said:  “There is no denying that COVID-19 and lockdown restrictions played a huge part in the decrease of the construction output in April, causing activity to drop by 40.1%.

“April also saw a fall in all new work sectors with both private new housing and private commercial being the largest contributors.

“The decrease in private, new housing work will have a huge impact on budding homeowners due to the housing shortage.

“However, with many large firms now resuming activity, we’ll start to see them work around the clock to get housing work back on the move.

“The construction industry has a long road ahead to recover from the current pandemic.

“However, with social distancing measures starting to relax and the economy gradually reopening, we should eventually see a growth in these figures in the coming months.”


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