UK Economy Grows Below Expectations in Q1

UK’s GDP advanced 0.8 percent in the first three months of 2014, marking a fifth straight quarter of economic expansion. While manufacturing and services climbed 1.3 percent and 0.9 percent respectively, agriculture and mining were down.

Preliminay estimates showed the largest contribution to growth in Q1 2014 came from services (+0.7 percentage points). The index for total services increased by 0.9 percent, following a growth of 0.8 percent in Q4 2013. All four main services aggregates advanced: distribution, hotels & restaurants (+1.5 percent); transport, storage & communication (+1.1 percent); business services & finance (+0.9 percent) and government & other services (+0.4 percent).  In Q1 2014 output from services was 2.0% above its previous peak in Q1 2008, prior to the economic downturn.

There was also an upward contribution from production (0.11 percentage points). The index of production advanced by 0.8 percent in Q1 2014, following an increase of 0.5 percent in the previous quarter. Manufacturing contributed the most to the increase, with growth of 1.3 percent, following the 0.6 percent expansion in Q4 2013. Water & waste management rose by 1.1 percent following an increase of 1.6 percent in Q4 2013. Partially offsetting these rises were decreases in mining & quarrying (-1.1 percent) and in energy supply (-2.0 percent). In Q1 2014 output from production was at its highest level since Q4 2011, but still remained 11.5 percent below its pre-economic downturn peak in Q1 2008.

Construction output rose 0.3 percent in Q1 2014, contributing 0.02 percentage points to the increase in GDP. The quarterly growth was recorded despite a drag on output caused by a weak February. Early responses to the monthly business survey for March indicate a rise into March but not a return to the level of output witnessed in January 2014.

Agriculture output decreased by 0.7 percent, following an increase of 0.2 percent in the previous quarter.

In Q1 2014 GDP was estimated to be 0.6 percent below the peak in Q1 2008. From peak to trough in 2009, the economy shrank by 7.2 percent. 

GDP was 3.1% higher in Q1 2014 compared with the same quarter a year ago.

UK Economy Grows Below Expectations in Q1

ONS | Joana Taborda |
4/29/2014 1:38:33 PM