The main reason for this increase is stronger production and construction output offsetting weaker growth in total services. GDP growth is still driven by services.
Production output rose by 0.6 per cent in the latest quarter, following a 0.1 per cent fall in the previous quarter. This rise is largely caused by stronger manufacturing, which rose by 0.6 per cent compared with a fall of 0.4 per cent in the first quarter. Mining and quarrying rose 1.1 per cent while energy supply fell by 0.4 per cent.
Total services grew by 0.8 per cent in the second quarter of 2007, a slight decrease on the previous quarter’s growth. This is mostly caused by weaker distribution, hotels and restaurants and government and other services. Business services and finance showed increased growth in the second quarter.
Distribution, hotels and restaurants increased by 0.4 per cent, compared with 1.0 per cent in the previous quarter. The slowdown is mainly because of weaker wholesale and hotels and restaurants, which were partially offset by stronger retailing.
Transport, storage and communication rose by 1.4 per cent, less than the 1.6 per cent rise in the first quarter. The slight decrease is mostly due to land transport and post and telecommunications.
Business services and finance grew by 1.3 per cent in the second quarter, up from 1.0 per cent. The largest contribution comes from other business services, which includes legal services, labour recruitment and architects and engineers. The acceleration in growth is mainly due to stronger computing.
Government and other services rose by 0.1 per cent in the second quarter compared with a previous rise of 0.5 per cent. Weaker recreational services are the prime cause of this decrease.
Construction rose by 1.1 per cent, compared with 0.7 per cent in the first quarter.