UK economy experiences a surprise contraction in November

The Office for National Statistics has released figures to show that the economy in the UK contracted in November 2019, contrary to the forecast for the month.

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Despite predictions of a flat reading for the month, the ONS data shows that monthly gross domestic product dropped 0.3% in November. This contraction in the economy followed the growth of the previous two months. Both September and October were slightly more positive than estimated, with both months seeing slight growth of 0.1%

Three-month period

It is vital to keep in mind that the GDP monthly growth rate is highly volatile, so caution should be taken when interpreting these monthly growth rate figures. In order to obtain indicators of longer-term economy trends, GDP monthly growth rates should be considered alongside measures such as the three-month growth rates.

Head of GDP Rob Kent-Smith noted that although the UK economy had grown slightly in the last three months, the increase in the construction sector had been pulled down by drops in both the services and manufacturing industries.

Production and services

The services sector saw growth of 0.1%, while construction grew by 1.1% in the three-month period to November 2019 and the production industry dropped 0.6%. Disappointingly for manufacturers, this is the second consecutive rolling three-month drop.

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November figures show services dipped 0.3% from October, production slumped 1.2%, and construction saw growth of 1.9%. For manufacturing companies – such as a company producing a hoist winch, for example – the situation is disappointing and concerning. A hoist winch is commonly used in industries such as engineering, construction, and automotive. Although manufacturing has been in decline for some years, experts have blamed the uncertainty surrounding Brexit for the recent slump. The uncertainty that hit domestic customers, paired with low global demand for British products, resulted in a slump for the sector. Production firms have been forced to lay off staff for seven months straight, an industry survey revealed.


Meanwhile, in the construction industry, output grew for the third consecutive three-month rolling period. The rolling three-month growth in the construction industry in November was 1.1%. This was following the October growth of 0.8%. Private commercial and infrastructure is said to have driven this growth in construction, as these sectors grew by 1.8% and 3.0% respectively.