UK Q4 GDP Growth Confirmed at 0.4%

The British economy grew by 0.4 percent on quarter in the three months to December of 2017, unrevised from the second estimate and following a 0.5 percent expansion in the previous period. Fixed investment increased firmly despite a slowdown in business investment, while net trade contributed negatively to growth.

From the expenditure side, the largest contribution to growth was from gross capital formation at 0.5 percentage points, followed by household spending at 0.2 percentage points and general government at 0.1 percentage points. Meanwhile, net trade had a negative contribution of 0.4 percentage points.

Gross fixed capital formation grew by 1.1 percent (vs 0.5 percent in Q3), with the general government and private dwelling sectors contributing the most to the increase, while business investment rose at a slower 0.3 percent (vs 0.8 percent in Q3 and compared to a second estimate of no growth). Household expenditure advanced by 0.3 percent, the same pace as in Q3, and government spending expanded by 0.4 percent, recovering from a 0.1 percent contraction in the previous period. The largest contributor to this increase in government expenditure was healthcare, followed by spending on public administration and education.

Imports of goods and services went up by 0.4 percent (vs 1.2 percent in Q3 and compared to a second estimate of 1.5 percent), while exports declined by 0.9 percent (vs 1.8 percent in Q3 and compared to a second estimate of -0.2 percent). As a result, the trade deficit widened by £1.758 billion from the previous period to £9.375 billion.

From the production side, the services aggregate was the main driver of growth, contributing 0.3 percentage points, followed by total production (0.1 percentage points).

The services industries increased by 0.4 percent, faster than 0.3 percent in the previous period. Positive growth was recorded within three of the four sub-sectors of the services industries: transport, storage and communications (1.1 percent vs 0.3 percent in Q3); business services and finance (0.6 percent vs 0.5 percent); and government and other services (0.1 percent vs -0.2 percent). By contrast, distribution, hotels and restaurants contracted by 0.1 percent, after a 0.5 percent growth in Q3. Industrial output increased by 0.4 percent (vs 1 percent in Q3), boosted by manufacturing (1.3 percent vs 1.1 percent) while activity in other sub-sectors declined: mining and quarrying (-4.9 percent vs 2 percent); electricity, gas, steam and air conditioning supply (-0.4 percent vs 1.5 percent); and water supply and sewerage (-0.4 percent vs -1.1 percent). Construction output shrank by 0.1 percent, after a 0.4 percent growth in the previous period.

Year-on-year, the economy expanded by 1.4 percent, the least since the second quarter of 2012. 

In 2017, the GDP rose by 1.8 percent, compared with 1.9 percent in 2016.

UK Q4 GDP Growth Confirmed at 0.4%

ONS | Joana Ferreira |
3/29/2018 9:31:41 AM