United Kingdom GDP Annual Growth Rate at 0.6% in Q1


United Kingdom GDP in volume terms expanded 0.6 percent year-on-year in the first quarter of 2013. This is up from 0.2 percent growth in Q4 of 2012, according to a release by the Office for National Statistics

At this stage the snowfall and cold weather during Q1 2013 appears to have had a limited impact on GDP growth. The strongest evidence was that it reduced retail output in January and March 2013 but boosted demand for electricity and gas in February and March, which increased output in the energy supply industries.

Coming out of the recession in 2008-09, the rate of GDP growth has been slower compared with the early-2000s, owing to weaknesses in the domestic and global markets. Services have continued to grow steadily from 2009, and ended 2012 above pre-recession levels seen at the start of 2008. 
 
Production began to decrease from the start of 2011 following a mild recovery in 2010, as increased inflation and slower wage growth began to reduce households’ real income. Compounding this subdued demand was the development of the euro area sovereign debt crisis, which affected business sentiment in the EU, a key export market for the UK. Construction activity saw a more marked increase than that of production in 2010. 
 
However, this was not sustained, with activity falling from the final quarter of 2011 due to a deteriorating economic outlook. Construction returned to growth in the final quarter of 2012, following five quarters of negative growth. This was short-lived, however, and construction has returned to negative growth again in Quarter 1 2013.

ONS | Nuno Fontes | nuno@tradingeconomics.com
4/25/2013 9:57:32 AM