UK Q1 2020 GDP contracts by 2% (QoQ) and contracts 1.6% (YoY); Services, Production and Construction all contract; Household consumption falls the most since 2008

UK Q1 2020 gross domestic product (GDP) was estimated to have fallen by 2% in the quarter compared to Q4 2019, the largest fall since Q4 2008.

When compared with the same quarter (Q1 2019) a year ago, UK GDP decreased by 1.6% in Q1 2020 which was the biggest fall since Q4 2009.

UK 2020 Q1 GDP

The quarter was impacted by widespread disruption to economic activity due to Coronavirus (COVID-19). The economic contraction during the quarter was the most since the 2008 global financial crisis. The decline in Q1 2020 was largely due to the 5.8% fall in economic output in March 2020, with record monthly declines in output across the services, production, and construction industries.

All sectors contract

Services output decreased by 1.9% in Q1 2020, the largest quarterly fall since records began.

Production output fell by 2.1% in Q1 2020, driven by declines in manufacturing.

Construction output decreased by 2.6% in Q1 2020.

UK Q1 2020 GDP sector growth

Consumption collapses

Private consumption, government consumption and net tradeall contributed negatively to growth  in Q1 2020, with only gross capital formation contributing positively to growth.

UK 2020 Q1 GDP consumption trade expenditure

 

Household consumption falls most since the financial crisis

Household consumption fell by 1.7% in Q1 2020, the largest contraction since Q4 2008. The decline in household consumption in the first quarter of the year was driven by falls in spending on transport, restaurants and hotels, and clothing and footwear, in line with expectations of the effects of social distancing that was put in place in March.

Related: UK Q4 2019 GDP growth at 0% (QoQ), 1.1% (YoY); 2019 growth at 1.4% (YoY)

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