16th Jul 2026 07:20
(Alliance News) - The UK economy returned to growth in May, official figures showed on Thursday, as a rebound in the services sector offset declines in production and construction.
According to the Office for National Statistics, UK gross domestic product rose 0.1% in May from April, matching the FXStreet-cited consensus. The economy had contracted 0.1% in April after expanding 0.3% in March.
Services output, which accounts for the largest share of the UK economy, increased 0.3% in May following a 0.1% decline in April. The strongest positive contribution came from professional, scientific and technical activities, which rose 1.8%.
Production output fell 0.5% on the month after a 0.2% increase in April, missing the FXStreet-cited consensus for a 0.1% decline.
The decline was driven by a 4.6% fall in mining and quarrying output, with crude petroleum and natural gas extraction dropping 4.8% to its lowest level since monthly records began in 1990. Water supply and sewerage output fell 2.4%, while electricity and gas output edged down 0.1%.
Manufacturing output rose 0.1%, with seven of the 13 subsectors recording growth. Machinery and equipment posted the largest increase, up 5.3%, although this was largely offset by a 2.7% decline in basic metals and metal products.
Construction output fell 0.8% in May, following a revised 0.1% decline in April. The monthly decrease was entirely driven by repair and maintenance work, which fell 2.1%, led by a 5.0% drop in private housing repair and maintenance. New work rose 0.2%.
In the three months to May, GDP increased 0.7% compared with the previous three-month period, following revised growth of 0.8% in the three months to April and ahead of FXStreet expectations of a 0.36% increase.
Over the same period, services output grew 0.7%, production output increased 0.1%, and construction output rose 1.6%.
The ONS revised the three-month GDP growth rate for April up to 0.8% from 0.7%. Services growth over the three months to April was also revised up to 0.9% from 0.8%, while production growth was revised to 0.1% from a previously estimated 0.1% decline. Construction growth for the three months to April was revised down to 1.3% from 1.6%.
Separately, the Office for National Statistics said the UK's goods trade deficit narrowed to GBP19.5 billion in May from GBP20.6 billion in April, comfortably beating the FXStreet-cited consensus for a GBP23.6 billion shortfall.
Goods exports rose GBP1.5 billion, or 4.5%, to GBP35.0 billion, driven by a GBP1.2 billion increase in exports to non-EU countries and a GBP300 million rise in exports to the EU.
Goods imports increased GBP500 million, or 0.8%, to GBP54.5 billion, as a GBP800 million rise in imports from non-EU countries was partly offset by a GBP400 million decline in imports from the EU.
Over the three months to May, the total goods and services trade deficit widened by GBP4.4 billion to GBP9.1 billion, as the goods deficit widened to GBP60.9 billion while the services surplus narrowed to GBP51.8 billion.
By Eva Castanedo, Alliance News senior economics reporter
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