UK Q3 GDP Growth Confirmed at 0.5%

The British 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 and in line with the preliminary estimate. Net external demand was the main driver of growth, while household expenditure and fixed investment rose at a slower pace.
ONS | Joana Ferreira | 11/25/2016 10:34:00 AM
From the expenditure side, the largest positive contribution to GDP came from net trade, which contributed a positive 0.7 percentage points, and household final consumption expenditure, which contributed a positive 0.4 percentage points.

The trade balance deficit narrowed to £12.4 billion from £15.7 billion in Q2. Exports increased by 0.7 percent, following a 1 percent drop in the previous period, while imports shrank 1.5 percent following a 1.3 percent gain. 

Total domestic expenditure decreased by 0.2 percent, after expanding by 1.4 percent in the previous period. Household expenditure (+0.7 percent from +0.9 percent in Q2), government spending (+0.4 percent from flat reading); and gross fixed capital formation (+1.1 percent from +1.6 percent), of which business investment (+0.9 percent) grew. Meanwhile, non-profit institutions serving households’ consumption contracted (-0.4 percent from +1.7 percent) and the level of inventories increased by £3.1 billion, following an increase of £3.0 billion in the previous period. 

From the production side, the service industries increased by 0.8 percent following a 0.6 percent gain in Q2 and marking the 15th consecutive quarter of positive growth. Output rose for: Distribution, hotels and catering (+1.1 percent, the same as in the previous period); transport, storage and communication (+2.3 percent from +0.6 percent); business services and finance (+0.3 percent from +0.6 percent); and government and other services (+0.5 percent from +0.1 percent). Industrial output decreased by 0.5 percent (+2.1 percent in Q2), as output declined for: manufacturing (-0.9 percent from +1.6 percent in Q2); electricity, gas, steam and air conditioning supply (-4.3 percent from +4.6 percent); and water supply and sewerage (-0.5 percent from +2.1 percent in Q2). By contrast, output from mining and quarrying (including oil and gas extraction) increased by 4.3 percent (+2.8 percent in Q2). Construction output decreased by 1.1 percent, following a 0.1 percent fall the previous period.

Compared to the same period of 2015, the economy expanded 2.3 percent, the biggest gain since the second quarter of 2015.

UK Q3 GDP Growth Confirmed at 0.5%