UK GDP slumps 20.4% in April as lockdown bites
By Michele Maatouk
Date: Friday 12 Jun 2020
(Sharecast News) - The UK economy contracted by a record 20.4% on the month in April as the coronavirus lockdown took its toll, according to figures released by the Office for National Statistics on Friday.
This followed a 5.8% drop in March and was worse than the 18.4% decline expected by economists. It also marked the worst monthly fall since records began in 1997.
In the three months to April, the economy contracted by 10.4% compared to the previous quarter, versus expectations for a 10% decline.
Manufacturing production fell 24.3% in April, while industrial production was down 20.3%. Construction output slid 40.1% and services production was 19% lower. All four sectors suffered their worst monthly falls since their series began.
Jonathan Athow, deputy national statistician for Economic Statistics, said: "April's fall in GDP is the biggest the UK has ever seen, more than three times larger than last month and almost ten times larger than the steepest pre-Covid-19 fall. In April the economy was around 25% smaller than in February.
"Virtually all areas of the economy were hit, with pubs, education, health and car sales all giving the biggest contributions to this historic fall. Manufacturing and construction also saw significant falls, with manufacture of cars and housebuilding particularly badly affected.
"The UK's trade with the rest of the world was also badly affected by the pandemic, with large falls in both the import and export of cars, fuels, works of art and clothing."
Samuel Tombs, chief UK economist at Pantheon Macroeconomics, said: "The economy will take a long time to recover from the pummelling inflicted by the Covid-19 pandemic. April's unprecedented drop in GDP extends the decline from January's peak to a gargantuan 25.2%. This collapse greatly surpasses the 6% peak-to-trough decline in GDP seen in the 2008-to-09 recession, which previously was the deepest in post-war history."
Andrew Wishart, UK economist at Capital Economics, said: "Given the lockdown started to be eased in May, April will mark the trough in GDP. So we are past the worst. But the recovery will be a drawn-out affair as restrictions are only lifted gradually and businesses and consumers continue to exercise caution.
"And while the trough in activity is now behind us, the fiscal cost of the collapse and the rise in the unemployment rate to over 8% that will result are only just starting to emerge."
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