United Kingdom: Second estimate confirms GDP growth in Q3
November 24, 2011
In the third quarter, GDP added a seasonally adjusted 0.5% over the previous quarter, according to a second estimate released on 24 November. The reading was unrevised from the preliminary data published by the Office for National Statistics (ONS) on 1 November and represented the fastest pace of growth for a year. In the second quarter, the economy expanded a paltry 0.1% over the previous quarter. Growth in the third quarter was mainly driven by an increase in inventories. According to the ONS, growth in inventories contributed 0.7 percentage points to GDP. Private consumption was flat in the third quarter, contrasting the 0.8% decline in the second quarter, while government consumption added 0.9% in the third quarter (Q2: +1.1% quarter-on-quarter). Fixed investment contracted 0.2% in the third quarter, in contrast to an increase of 1.7% in the second quarter. Exports of goods and services contracted 1.0% in the third quarter (Q2: -1.3% qoq), while imports rose 0.3% (Q2: -0.3% qoq). As a result, the external sector's net contribution to overall growth deteriorated from minus 0.3 percentage points in the second quarter to minus 0.4 percentage points in the third. At the sector level, services were the main contributor to a pick-up in economic activity in the third quarter. Services rose 0.6% in Q3, up from the 0.2% increase seen in Q2. The industrial sector rebounded from a 1.2% contraction in the second quarter to a 0.4% expansion in the third. On the other hand, the construction sector declined 0.2% in the third quarter (Q2: -1.2% qoq). The Central Bank expects GDP to grow 1.0% in 2011 and 0.8% in 2012.