UK Monthly GDP Up Slightly But Lockdown Weighs on Activity

FEB GDP +0.4 % M/M (PREV -2.2%), -7.8% Y/Y (PREV -9.2%)

FEB INDEX OF SERVICES +0.2% M/M; -8.8% Y/Y; PRV -2.5% M/M, MED +0.6%

FEB IND PRODUCTION +1.0% M/M, PRV -1.8%, MED +0.5%

FEB MANUFACTURING +1.3% M/M, PRV -2.3%, MEDIAN +0.5%

FEB CONSTRUCTION +1.6% M/M, PRV 0.0%, MEDIAN +0.5%

• After dropping by 2.2% in Jan, UK m/m GDP rebounded to 0.4% in Feb, coming in slightly weaker than markets expected (BBG: +0.5%).
• GDP remains 7.8% below the Feb 2020's pre-pandemic level.
• For Q1 GDP to record a flat reading, Mar GDP would need to grow by 6.4%.
• Feb's uptick was broad-based with ever major sector positing an increase:
• The services sector grew by 0.2%, slightly weaker than expected (BBG: +0.6%) and mainly on the back of wholesale and retail services, up 3.3% m/m.
• Industrial output ticked up to 1.0%, while manufacturing output edged up by 1.3% in Feb. Both indicators increased by more than markets expected and the ONS noted that car manufacturers saw a partial recovery after a weak Jan.
• Construction rose significantly by 1.6%, surpassing forecasts looking for a 0.5% uptick after having struggled for a couple of months.
• Exports to the EU increased in Feb, following a sharp drop in Jan, but they remained 15.1% below Dec's level.
• Imports were still 24.5% below their Dec figure, as a number of issues are hampering trade, the ONS noted.