UK Q2 Growth Doubles On Services, Construction
UK economic growth doubled in the second quarter driven by stronger growth in both services and construction sectors, the initial quarterly estimate from the Office for National Statistics showed Friday. Gross domestic product rose 0.4 percent, faster than the 0.2 percent expansion seen in the first quarter. This was also in line with the Bank of England estimate.
On a yearly basis, GDP advanced 1.3 percent versus 1.2 percent growth seen a quarter ago.
«The economy picked up a little in the second quarter with both retail sales and construction helped by the good weather and rebounding from the effects of the snow earlier in the year,» Head of National Accounts at ONS, Rob-Kent Smith, said.
The dominant services output expanded 0.5 percent and construction logged a quarterly growth of 0.9 percent. These increases helped to offset a 0.8 percent fall in production.
On the expenditure-side, growth in household consumption strengthened slightly to 0.3 percent, while government spending growth held steady at 0.4 percent. Driven by rise in business investment, gross fixed capital formation climbed 0.8 percent.
The trade deficit widened by GBP 4.7 billion to 0.9 percent of GDP, compared with 0.7 percent in the previous quarter. This reflected a 2 percent fall in the value of exports and a 1 percent rise in the value of imports.
According to the monthly GDP estimate, the economy grew only 0.1 percent in June, slower than the 0.3 percent rise seen in May.
In June, the index of services remained flat in June, while farm output contracted 0.2 percent. At the same time, growth in construction came in at 1.4 percent, but slower than the 2.9 percent increase in May.
Industrial production climbed 0.4 percent month-on-month, reversing a 0.2 percent fall in May. This was the first increase in four months and above the expected growth of 0.3 percent.
On the other hand, manufacturing rose at a slower pace of 0.4 percent after gaining 0.6 percent in May. Economists had forecast a 0.3 percent rise for June.
On a yearly basis, growth in industrial output slowed slightly to 1.1 percent from 1.2 percent in May. At the same time, manufacturing output growth held steady at 1.5 percent.
Economists had forecast industrial output to climb 0.7 percent and manufacturing to rise 1 percent in June.
In June, the visible trade deficit narrowed to GBP 11.38 billion from GBP 12.53 billion in May, a separate report from ONS showed. At the same time, the surplus on services increased to GBP 9.52 billion from GBP 9.38 billion.
As a result, the total trade deficit shrank to GBP 1.86 billion from GBP 3.14 billion in May.