UK Q3 GDP Growth Confirmed at 0.4%


The British economy advanced 0.4 percent on quarter in the three months to September of 2017, unrevised from the preliminary estimate and following a 0.3 percent expansion in the previous period. Household consumption rose at stronger pace, with car purchases recovering somewhat from a low Q2, while business investment growth softened.

From the expenditure side, the positive contribution to GDP came from gross capital formation (0.5 percentage points) and household final consumption expenditure (0.4 percentage points); while net trade had a negative contribution of 0.5 percentage points and other components were neutral.

Household expenditure advanced by 0.6 percent, after rising by only 0.2 percent in the previous period, boosted by a modest recovery to expenditure on transport, including motor cars. Government spending expanded by 0.3 percent (0.1 percent in Q2 2017), with healthcare and education being the largest contributor to growth. Gross fixed capital formation grew by 0.2 percent (0.6 percent in Q2), as business investment growth slowed (0.2 percent from 0.5 percent in Q2). Meanwhile, the sectors contributing the most to GFCF growth were both dwellings and intellectual property products.

Imports of goods increased by 1.9 percent (0.4 percent in Q2), driven by non-monetary gold within the unspecified goods component, fuels, and machinery and transport equipment; while those of services fell by 1.5 percent (-0.4 percent in Q2), due to other business services. Exports of goods decreased by 1.8 percent (4 percent in Q2), driven by fuels, specifically oils and chemicals; while exports of services went up by 0.6 percent (-1.1 percent in Q2), boosted by other business services. As a result, the trade deficit widened by £2.536 billion to £11.737 billion, the largest widening since Q3 2016.

From the production side, the services aggregate was the main driver to the growth in GDP, contributing 0.3 percentage points, followed by total production (0.2 percentage points). These positive contributions were offset by a negative 0.1 percentage point contribution from the construction industry while agriculture provided no contribution to growth.

The services industries increased by 0.4 percent, the same pace as in the previous period. The largest contribution came from business services and finance (0.6 percent from 0.1 percent in Q2) with professional, scientific, administration and support providing most of this increase. Also, upward contribution came from both distribution, hotels & restaurants (0.3 percent from 0.9 percent); and government and other services (0.2 percent from 0.3 percent); while transport, storage and communications showed no growth (1.2 percent in Q2). Industrial output increased by 1.1 percent (-0.3 percent in Q2), boosted by all four main categories: Manufacturing (1.1 percent from -0.3 percent); mining and quarrying (2.1 percent from 0.6 percent); electricity, gas, steam and air conditioning supply (1.1 percent from -0.3 percent); and water supply and sewerage (0.7 percent from -1 percent). Construction output shrank by 0.9 percent, following a 0.5 percent contraction the previous period.


UK Q3 GDP Growth Confirmed at 0.4%


ONS | Joana Ferreira | joana.ferreira@tradingeconomics.com
11/23/2017 10:06:54 AM