UK economy grows in May as services offset production falls

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 £19.5 billion in May from £20.6 billion in April, comfortably beating the FXStreet-cited consensus for a £23.6 billion shortfall.

Goods exports rose £1.5 billion, or 4.5%, to £35.0 billion, driven by a £1.2 billion increase in exports to non-EU countries and a £300 million rise in exports to the EU.

Goods imports increased £500 million, or 0.8%, to £54.5 billion, as a £800 million rise in imports from non-EU countries was partly offset by a £400 million decline in imports from the EU.

Over the three months to May, the total goods and services trade deficit widened by £4.4 billion to £9.1 billion, as the goods deficit widened to £60.9 billion while the services surplus narrowed to £51.8 billion.

Copyright 2026 Alliance News Ltd. All Rights Reserved.