UK Q4 GDP Growth Confirmed At 0.7%

The British economy advanced 0.7 percent on quarter in the three months to December of 2016, following a downwardly revised 0.5 percent expansion in the previous period and in line with a second estimate. Net trade and consumer spending boosted growth while business investment contracted.
ONS | Joana Ferreira | 3/31/2017 9:11:44 AM
From the expenditure side, the positive contribution to GDP came from net trade (1.7 percentage points), and household final consumption expenditure (0.4 percentage points). In contrast, gross capital formation subtracted 1.6 percentage points from growth.

Exports jumped by 4.6 percent, following a 2.1 percent drop in the previous period, while imports shrank 1 percent following a 2.3 percent gain. As a result, the trade deficit narrowed to £10.0 billion from £18.1 billion in Q3. 

Household expenditure advanced by 0.7 percent (from 0.8 percent in Q3); and gross fixed capital formation edged up 0.1 percent (0.6 percent in Q3), despite a 0.9 percent contraction in business investment (from 0.4 percent in Q3), driven by falls within the other buildings and structures and transport equipment assets. Meanwhile, government spending showed no growth (from -0.1 percent in Q3); and the level of inventories rose by £12 million, following an increase of £1,448 million in the previous period.

From the production side, the service industries increased by 0.8 percent following a 0.9 percent gain in Q3 and marking the 16th consecutive quarter of growth. Output rose for: Distribution, hotels and catering (2 percent from 1.1 percent in Q3); transport, storage and communication (0.8 percent from 2.6 percent); business services and finance (0.5 percent from 0.7 percent); and government and other services (0.3 percent, the same as in Q3). Industrial output increased by 0.4 percent (-0.4 percent in Q3), as output expanded for: manufacturing (1.2 percent from -0.7 percent in Q3); electricity, gas, steam and air conditioning supply (4 percent from -4.3 percent); and water supply and sewerage (0.9 percent from -0.1 percent). By contrast, output from mining and quarrying (including oil and gas extraction) contracted by 6.9 percent (4.5 percent in Q3). Construction output advanced by 1 percent, following a 0.3 percent fall the previous period; and agriculture grew 1 percent, the first increase in four quarters. 

Compared to the same period of 2015, the economy expanded 1.9 percent, worse than a second estimate of a 2 percent expansion.

Looking at 2016 as a whole, growth slowed to 1.8 percent from 2.2 percent in 2015 and 3.1 percent in 2014.

UK Q4 GDP Growth Confirmed At 0.7%