United Kingdom: GDP growth revised down as economy nearly stalls in Q2
October 5, 2011
In the second quarter, GDP added a seasonally adjusted 0.1% over the previous quarter, according to the final estimate released on 5 October. The reading was revised down from the previously reported 0.2% in both the preliminary and secondary estimates of the national accounts. Domestic demand remained subdued in the second quarter, mainly due to suppressed consumer spending. Government consumption accelerated from 0.8% in the first quarter to 1.1% in the second quarter, while fixed investment rebounded from a 2.8% contraction in the first quarter to a 1.7% expansion in the second quarter. On the other hand, private consumption continued to decline and fell 0.8% in the second quarter (Q1: -0.6% quarter-on-quarter). The contribution from private consumption to overall economic growth has now been negative for four consecutive quarters. Moreover, the contribution from net exports fell into negative territory for the first time since the third quarter of 2010. Exports of goods and services declined 1.3% in the second quarter (Q1: +1.5% qoq), while imports fell 0.3% (Q1: -2.9% qoq). As a result, the net contribution of the external sector to overall growth deteriorated from plus 1.4 percentage points in the first quarter to minus 0.3 percentage points in the second quarter. At the sector level, only growth in services remained positive in the second quarter, which increased 0.5% over the previous quarter (Q1: +0.9% qoq). The industrial sector contracted 1.6% in the second quarter while agriculture declined 1.3%.