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Thomas StorringDirector – Economics and Statistics
Tel: 902-424-2410Email: thomas.storring@novascotia.ca

September 30, 2020
UK GDP Q2 2020 (SECOND ESTIMATE)

The Office for National Statistics (ONS)' first estimate of UK Gross Domestic Product for Q2 2020 reports a decline of 58.7 per cent (seasonally adjusted annualized rate), compared to decline of 9.7 per cent in the first quarter of 2020. This was the largest quarterly decline on record since 1955 when ONS quarterly records began, which signifies the imposition of public health restrictions and voluntary social distancing due to COVID-19. The growth rate for the second quarter was revised upward compared to the previous estimate. Compared to the second quarter of 2019, the UK GDP declined 21.5 per cent. In Q2, UK real GDP growth decline was attributable to the record decline in output in April 2020 and final consumption.

By industry, there were record declines in services, construction, and production industries. The industries most impacted by COVID-19 were construction, manufacturing, retail, accommodation and food services, education, and health and social services.

The households saving ratio increased to a record 29.1 per cent in Q2 2020, compared with 9.6 per cent in Q1 2020.

There has been a phased easing of lockdown restrictions through May and June which reflected some rebound in June GDP.

 

 

 

A seasonally adjusted annualized rate shows what the percent change would be if the quarterly rate continued for four quarters. It is computed by compounding the quarterly rate for four quarters. Reporting annualized rates facilitates comparability between annual and quarterly growth but can exaggerate change when series are volatile. The COVID-19 shocks do not indicate a contraction of UK GDP by 58.7 per cent in Q2.  It would take four quarters of compounded contraction at the same pace as reported in Q2 to reduce UK GDP by 58.7 per cent. Real GDP in Q2 contracted 19.8 per cent compared to Q1 2020.

 

Office for National Statistics



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