UK GDP Expands 0.8% in Q2

The UK economy advanced 0.8 percent on quarter in the three months to June, the same growth rate recorded in the previous period, driven by the services sector. Preliminary estimates showed the economy is now 0.2 percent bigger than in the first quarter of 2008, its previous peak.

The largest contribution to Q2 2014 GDP growth came from services; these industries increased by 1.0 percent, contributing 0.77 percentage points to the increase in GDP. This followed an increase of 0.8 percent in Q1 2014. In the latest quarter there was widespread growth, with increases in each of the four main services aggregates (distribution, hotels & restaurants; transport, storage & communication; business services & finance; and government & other services). In Q2 2014 output from services was 2.9 percent above its previous peak in Q1 2008, prior to the economic downturn. 

There was also an upward contribution (0.05 percentage points) from production; these industries rose by 0.4 percent, with energy supply increasing by 4.7 percent following a decrease of 6.4 percent in Q1 2014, manufacturing increasing by 0.2 percent following an increase of 1.5 percent in Q1 2014, and mining & quarrying increasing by 0.9 percent following an increase of 0.8 percent in Q1 2014. Partially offsetting these rises was a decrease of 2.5 percent in water & waste management. 

Construction output decreased by 0.5 percent in Q2 2014 when compared with Q1 2014, contributing -0.03 percentage points to GDP growth. The fall in construction output followed a rise of 1.5 percent in Q1 2014. Compared with the previous month, May 2014 saw a dip in construction output of 1.1 percent following a rise of 1.2 percent in April 2014. Early responses for June 2014 indicate a rise into June but this still leaves the level of output in Q2 2014 below that of Q1 2014, mainly due to a strong January 2014.  

Year-on-year, the GDP advanced 3.1 percent in the second quarter of 2014, the highest growth rate since the last quarter of 2007.

UK GDP Expands 0.8% in Q2

ONS | Joana Taborda |
7/25/2014 10:15:06 AM