UK GDP down by record 20.4% in Q2 2020
UK gross domestic product (GDP) is estimated to have fallen by a record 20.4% in Quarter 2 (Apr to June) 2020, marking the second consecutive quarterly decline after it fell by 2.2% in Quarter 1 (Jan to Mar) 2020, according to the Office for National Statistics (ONS).
This is the largest quarterly contraction since quarterly records began in 1955.
The decline in the second quarter was driven by the 20.0% fall in output in April 2020, the biggest monthly fall on record reflecting widespread monthly declines in output across the services, production, and construction industries.
Following a decline of 1.7% in the first quarter, construction output fell by 35.0% in Quarter 2 2020, reflecting declines in both new work, and repair and maintenance.
Most notably, private new housing declined by 51.2% as housebuilding activity was affected by various social distancing measures that were put in place in response to the coronavirus pandemic.
Ross Counsell, chartered surveyor and director at Good Move, said: “The UK is now in recession for the first time in 11 years due to the impact COVID-19 has had on the economy.
“The UK property market has been one of the most exposed industries to the government’s restrictions with estate agents having to close their doors and buyers/sellers pausing activity throughout lockdown.
“Today’s news of the recession is undoubtedly going to worry those looking to buy a property as they’re going to want to protect their finances as much as possible, therefore they may be more inclined to stay put in their current home.
“Sellers may also be less inclined to accept lower offers on their homes, again, to protect their finances.
“Some may even take their homes off the market until the economy picks back up and their confidence is resumed.
“It’s now more important than ever for estate agents and advisers to support their clients and find the best possible deal for them to help protect their finances long-term.
“This and other measures the government continues to put in place will help keep the property market moving.
“On a positive note, today’s construction output statistics paint a more positive picture with output growing by 23.5% in June.
“It’s encouraging to see the figures point towards a recovery in construction work which is down to the phased restart on work.
“As mentioned above, the government must continue to put measurements in place to help keep construction moving to ensure we continue to see an increase month-on-month.”