UK GDP Growth Beats Expectations

The UK economy advanced 0.5 percent on quarter in the three months to September of 2016, slowing from a 0.7 percent expansion in the previous period but better than market expectations of 0.3 percent, preliminary estimates showed. It is the first GDP figure covering a full quarter following the EU referendum, suggesting growth continues to be broadly unaffected with a strong performance in the services industries offsetting falls in other industrial groups.
ONS | Joana Taborda | 10/27/2016 9:18:29 AM
The services industries increased by 0.8 percent, contributing 0.64 percentage points to growth, compared with an increase of 0.6 percent in Q2. All 4 of the main services aggregates (distribution, hotels and restaurants; transport, storage and communication; business services and finance; and government and other services) increased although growth in the transport, storage and communication industries was the main reason behind the increase in services growth between the 2 quarters. It increased by 2.2 percent (0.6 percent in Q2), the fastest expansion since Q4 2009, primarily driven by the motion picture, video and TV programme production, sound recording and music publishing activities, and computer programming industries.

Industrial production shrank 0.4 percent, contributing negatively to the expansion (-0.05 percent), following an increase of 2.1 percent in Q2. 3 of the main production aggregates decreased with: manufacturing falling 1.0 percent following an increase of 1.6 percent in Q2; energy supply decreasing by 3.6 percent following an increase of 4.6 percent in Q2 and water and waste management declining by 0.2 percent following an increase of 2.1 percent in Q2. In contrast, mining and quarrying increased by 5.2 percent, following an increase of 2.8 percent in Q2. 

The construction sector contracted 1.4 percent with a downward contribution to quarterly GDP growth of 0.09 percentage points. This follows a decrease of 0.1 percent in Q2 and marks the biggest downward movement in the construction industry since Q3 2012; however, this is in the context of a pattern of growth to Quarter 1 2016 when construction surpassed its pre-downturn peak. 

The agricultural sector also declined 0.7 percent, following a 1 percent contraction in Q2.

Year-on-year, the economy advanced 2.3 percent, higher than a 2.1 percent expansion in Q2 and better than market expectations of 2.1 percent. It is the fastest growth rate since Q2 2015.  

 UK GDP Growth Beats Expectations