UK Q3 GDP Growth Revised Up To 0.6%


The British economy advanced 0.6 percent on quarter in the three months to September of 2016, the same as in the previous period and better than the second estimate of 0.5 percent expansion. Household expenditure continued to grow while fixed investment rose at a slower pace and net external demand contributed negatively. Compared with the same period of 2015, the economy advanced 2.2 percent following a downwardly revised 2 percent expansion in the precedent quarter and missing the second estimate of 2.3 percent gain.

From the expenditure side, the largest positive contribution to GDP came from gross capital formation, which contributed a positive 1.3 percentage points, and household final consumption expenditure, which contributed a positive 0.5 percentage points, final figures showed. Net external demand subtracted 1.2 percentage points to growth.

Total domestic expenditure grew by 1.8 percent, after expanding by 0.3 percent in the previous period. Growth was recorded for: Household expenditure (+0.7 percent from +0.7 percent in Q2); and gross fixed capital formation (+0.9 percent from +1.1 percent), of which business investment (+0.6 percent). Meanwhile, government spending showed no growth (from -0.1 percent in Q2), non-profit institutions serving households’ consumption contracted 0.4 percent (from +1.7 percent in Q2) and the level of inventories increased by £1.6 billion, following an increase of £0.9 billion in the previous period. 

The trade balance deficit widened to £16.7 billion from £11.0 billion in Q2. Exports decreased by 2.6 percent, following a 1.4 percent rise in the previous period, while imports increased by 1.4 percent following a 0.4 percent gain. 

From the production side, the service industries increased by 1 percent following a 0.6 percent gain in Q2 and marking the 15th consecutive quarter of positive growth. Output rose for: Distribution, hotels and catering (+1.1 percent from +0.9 percent in Q2); transport, storage and communication (+2.6 percent from +0.4 percent); business services and finance (+0.8 percent, the same as in Q2); and government and other services (+0.4 percent from +0.1 percent). Industrial output decreased by 0.4 percent (+2.1 percent in Q2), as output declined for: manufacturing (-0.8 percent from +1.6 percent in Q2); electricity, gas, steam and air conditioning supply (-4.2 percent from +4.6 percent); and water supply and sewerage (-0.1 percent from +2.3 percent in Q2). By contrast, output from mining and quarrying (including oil and gas extraction) increased by 4.3 percent (+2.8 percent in Q2). Construction output decreased by 0.8 percent, following a 0.5 percent increase the previous period.

Compared to the same period of 2015, the economy expanded 2.2 percent, the biggest gain since the second quarter of 2015.

ONS | Joana Ferreira | joana.ferreira@tradingeconomics.com
12/23/2016 10:30:47 AM