Data published by the Office for National Statistics (ONS) showed that the economy expanded by 0.4% in May after stagnating in April. Experts expected GDP growth of 0.2%. Looking over the longer term, GDP is estimated to have grown by 1.0% in the three months to May compared with the three months to May 2023.
"The economy grew strongly in May with all the main sectors seeing increases. Many retailers and wholesalers had a good month, with both bouncing back from a weak April," ONS Director of Economic Statistics Liz McKeown said.
Services output grew by 0.3% m/m in May, following a rise of 0.3% in April (revised from +0.2%), with 8 of the 14 services subsectors showing growth in May. This is the fifth consecutive monthly growth in services output. The largest positive contribution at the sub-sector level in services came from the wholesale and retail trade; repair of motor vehicles and motorcycles sub-sector, which rose by 1.8% during the month. The largest negative contribution to services growth came from information and communication, down 1.4%, following growth of 2.8% in April 2024 (revised from +2.3%). Output in consumer-facing services grew by 0.8% in May, following a fall of 0.6% in April 2024 (revised from -0.7%). The main drivers of the growth were a 2.9% growth in retail trade, except of motor vehicles and motorcycles, and a 4.6% growth in the accommodation industry. Meanwhile, industrial production rose 0.2%, as expected, after falling 0.9% in April. The largest contribution to the growth was a 0.4% growth in manufacturing. Water supply, sewerage, waste management and remediation activities, and mining and quarrying also grew by 0.4% and 0.1%, respectively. These were partially offset by a fall of 1.9% in electricity, gas, steam and air conditioning supply.
Meanwhile, real GDP grew by 0.9% in the three months to May 2024, compared with the three months to February 2024. This is the strongest three-month growth since January 2022. Services output was the main contributor, with a growth of 1.1% in this period, while production output showed no growth and construction fell by 0.7%.
In annual terms, GDP grew by 1.4% in May, accelerating compared to April (+0.7%, revised +0.6%), and exceeding economists' forecasts (+1.2%). This was the strongest growth since January 2023.