United Kingdom GDP Growth Contracts 0.3% in Q4

GDP was estimated to have decreased by 0.3 percent in Q4 2012 compared with Q3 2012 and to have been flat in Q4 2012, when compared with Q4 2011. GDP is estimated to have been flat between 2011 and 2012.

The largest contribution to the decrease came from the production sector. A small downward contribution from the services sector was partially offset by a small upward contribution from the construction sector.

The production sector was estimated to have decreased by 1.8 percent in 2012 Q4, following an increase of 0.7 percent in the previous quarter. Both mining and quarrying and manufacturing made similar large negative contributions to the quarter on quarter growth rate falling by 10.2 percent and 1.5% respectively. The decline in mining and quarrying was due in part to an extended and later than usual maintenance period at the UK’s largest North Sea oil field, which reduced oil and gas extraction in 2012 Q4. Manufacturing weakness in Q4 was widespread with the majority of industries showing a decline in comparison with 2012 Q3.
The impact of the decline in mining and quarrying can be seen clearly, if oil and gas extraction is excluded, GDP then falls by 0.1 percent between 2012 Q3 and 2012 Q4 compared with the fall of 0.3 percent in total GDP.
The service sector was estimated to be flat in 2012 Q4, although it did make a small downwards contribution to GDP. This followed growth of 1.2% in 2012 Q3. The level of the service sector in 2012 Q3 was boosted by the Olympics and Paralympics. 

ONS | Nuno Fontes | nuno@tradingeconomics.com
1/25/2013 9:38:56 AM