UK Q2 GDP Growth Rate Confirmed at 0.3%

The UK economy advanced 0.3 percent on quarter in the three months to June of 2017, unrevised from the preliminary estimate and following a 0.2 percent expansion in the previous period. There was relatively strong growth in government spending and investment, while household consumption rose at softer pace and business investment stalled.
ONS | Joana Ferreira | 8/24/2017 9:13:28 AM
From the expenditure side, the positive contribution to GDP came from government spending (0.1 percentage points), gross capital formation (0.1 percentage points) and household final consumption expenditure (0.1 percentage points); while net trade had no contribution to growth.

Government spending expanded by 0.6 percent (0.7 percent in Q1 2017), with healthcare being the largest contributor while public administration expenditure fell. Gross fixed capital formation grew by 0.7 percent (1 percent in Q1). The sectors contributing to GFCF growth were general government, public sector dwellings and private sector transfer costs, while business investment stalled. Meanwhile, household expenditure advanced by only 0.1 percent, the lowest quarter-on-quarter growth since Q4 2014, after rising by 0.4 percent in the previous period. The slowdown was driven by a decline in growth in household expenditure on transport, including motor cars. Household expenditure on transport declined by 2.2 percent compared with a relatively strong Q1 performance, where transport grew by 1.4 percent. 

Imports of goods increased by 0.4 percent (2.1 percent in Q1) and those of services by 1.8 percent (0.4 percent in Q1). Exports of goods also increased, by 1.5 percent (1.8 percent in Q1), but exports of services decreased by 0.4 percent (-4.1 percent in Q1). As a result, the trade deficit widened slightly to £13.8 billion from £13.7 billion in Q1. 

From the production side, the services industries were the only positive contributor to output GDP growth, at 0.4 percentage points, while production and construction both fell and together detracted around 0.1 percentage points from growth.

The services industries increased by 0.5 percent following a 0.1 percent gain in Q1. The largest contribution came from distribution, hotels and restaurants (0.9 percent from -0.6 percent in Q1) with retail trade except of motor vehicles and motor cycles providing most of this increase. Also, upward contribution came from: Transport, storage and communications (1.2 percent from -0.8 percent); business services and finances (0.3 percent from 0.5 percent); and government and other services (0.4 percent, the same as in Q1). Industrial output contracted by 0.3 percent (0.1 percent in Q1): The greatest decrease was in manufacturing, the largest component of production (-0.6 percent from 0.3 percent), followed by electricity, gas, steam and air conditioning supply (-0.2 percent from -4.2 percent). These decreases were moderated by an increase in mining and quarrying (0.4 percent from 1.5 percent) and water supply and sewerage (0.1 percent from 1 percent). Construction output shrank by 1.3 percent, following a 1.1 percent gain the previous period.

UK Q2 GDP Growth Rate Confirmed at 0.3%