Slower growth was mainly explained by manufacturing activity, which contracted 1.9 percent after expanding 5.1 percent in the previous quarter. Output declines in the precision engineering and electronics clusters more than offset output expansions in the biomedical manufacturing and transport engineering clusters.
In contrast, the construction sector bounced back 1.4 percent following a 1.0 percent contraction in the previous three months and marked the first positive figure after 10 consecutive quarters of decline, supported by an improvement in private sector construction activities. Meantime, services gained steam (+2.1 percent vs +1.8 percent in Q4), mainly nudged by the information & communications and business services sectors.
On a quarter-on-quarter seasonally-adjusted annualised basis, the economy grew 2.0 percent in the three months to March 2019, gaining steam from an unchanged 1.4 percent expansion in the previous period and beating market consensus of 1.2 percent. Growth was led by construction, up 7.8 percent from 5.1 percent in the previous three-month period and by services, up 4.8 percent from 2.8 percent in Q4 2018. In contrast, manufacturing shrank a sharp 12.0 percent compared to a 2.7 percent decline in the preceding period.