On the expenditure side, government spending advanced much softer in the second quarter (0.1 percent vs 0.5 percent in Q1); while household consumption growth was unchanged (at 0.3 percent) and slightly below-average growth, mainly supported by expenditure for healthcare, housing and energy.
In addition, gross fixed capital formation contracted (-0.7 percent vs 1.6 percent), as both construction investment (-0.1 percent vs 0.5 percent in Q1) and equipment and software investment (-1 percent vs 2.4 percent) declined amid a further fall in machinery investment as the uncertain environment is dampening companies’ investment activity. At the same time, net foreign demand contributed negatively to the GDP growth, as exports rose 1.8 percent (vs -0.8 percent in Q1) while imports jumped at a faster 5 percent (vs -2.4 percent in Q1).
On the production side, output growth slowed for manufacturing (1.3 percent vs 1.4 percent); construction (0.1 percent vs 1.4 percent); financial service activities (0.7 percent vs 2.0 percent) and health and social activities (0.4 percent vs 0.8 percent). Also, output contracted for trade (-0.3 percent vs 0.6 percent); business services (-0.1 percent vs 0.5 percent); public administration (-0.1 percent vs 0.1 percent); and utilities (-2.4 percent vs 0.8 percent) while production of accommodation, food increased much faster (2.6 percent vs 0.2 percent).
Year-on-year, the economy grew by 0.2 percent in the June quarter, the weakest growth since a 0.4 percent contraction in the fourth quarter 2009, after a downwardly revised 1 percent expansion in the previous quarter and missing forecasts of a 0.9 percent advance.