The Office for National Statistics (ONS)' first estimate of UK Gross Domestic Product (seasonally adjusted annualized rate) for Q3 2021 reports growth of 4.3% following growth of 23.6% in Q2. This estimate includes downward revisions to growth this quarter, as well as upward revisions to growth in 2020. Compared to pre-pandemic quarter (Q4 2019), the UK economy is 1.5% smaller in Q3 2021. For Q3 2021, output increased in services as COVID-19 restrictions continued to ease. Construction and production output fell for the quarter.

Services output grew for the second consecutive quarter with increased activity in accommodation and food services and arts, entertainment and recreation following the relaxation of almost all public health restrictions. These sectors provided the largest contributions to growth this quarter. Services output is now 0.6% below pre-pandemic levels.

Production activity was 3.4% lower than pre-pandemic levels as the sector continues to struggle with supply chain challenges. The quarterly decline was driven by lower electricity, gas, steam and air conditioning supply, partially offset by an increase in mining and quarrying as sites reopened after temporary closure. Manufacturing output also fell for the quarter with lower output in 8 of 13 sub-sectors. 

Construction output fell 1.0% in Q3 reflecting industry challenges from higher input prices and supply chain delays.  Construction output is 2.1% below pre-pandemic levels.

A seasonally adjusted annualized rate shows what the percent change would be if the quarterly rate was compounded for four quarters. Reporting annualized rates facilitates comparability between annual and quarterly growth but can exaggerate change when series are volatile. UK GDP did not grow by 4.3% from Q2 2021 to Q3 2021.  Rather it would take four quarters of compounded growth at the same pace as reported in Q3 to increase UK GDP by 4.3%. UK real GDP increased 1.1% from Q2 2021 to Q3 2021 (seasonally adjusted, non-annualized).  

Office for National Statistics