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 second estimate and following a 0.3 percent expansion in the previous period. Household consumption rose at stronger pace while fixed investment growth softened.

From the expenditure side, the positive contribution to GDP came from household final consumption expenditure (0.3 percentage points), gross capital formation (0.1 percentage points) and business investment (0.1 percentage points); while net trade had a negative contribution of 0.1 percentage points and other components were neutral.

Household expenditure advanced by 0.5 percent, after rising by only 0.2 percent in the previous period. Gross fixed capital formation grew by 0.3 percent (1 percent in Q2 2017), as business investment growth was unchanged at 0.5 percent, while government spending fell by 0.2 percent (0.4 percent in Q2), mainly due to healthcare.

Imports of goods increased by 1.7 percent (0.5 percent in Q2), driven by increases in fuels, and machinery and transport equipment; while those of services fell by 0.8 percent (0.7 percent in Q2), due to other business services and sea transport. Exports of goods increased by 0.8 percent (3.1 percent in Q2), driven by machinery and transport equipment; while exports of services went up by 1.8 percent (0.9 percent in Q2), due primarily to strength in other services, which includes research and development. As a result, the trade deficit widened by £0.16 billion to £7.833 billion.

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 (0.7 percent from 0.1 percent in Q2), followed by distribution, hotels & restaurants (0.5 percent, the same as in Q2). Meanwhile, output showed no growth for both government and other services (from 0.3 percent in Q2) and transport, storage and communications (1.4 percent in Q2). Industrial output increased by 1.3 percent (-0.1 percent in Q2), boosted by: manufacturing (1.3 percent from -0.1 percent); mining and quarrying (2.9 percent from 1.1 percent); and electricity, gas, steam and air conditioning supply (1.4 percent from -0.2 percent). Water supply and sewerage output fell 0.5 percent after a 1 percent drop in Q2. Construction output shrank by 0.5 percent, following a 0.3 percent contraction the previous period.

UK Q3 GDP Growth Confirmed at 0.4%

ONS | Joana Ferreira |
12/22/2017 10:02:14 AM