UK Q3 GDP Growth Beats Expectations

The British economy advanced 0.4 percent on quarter in the three months to September 2017, beating market expectations of 0.3 percent, the preliminary estimate showed. The expansion was mainly driven by services boosted by computer programming, motor trades and retail trade. Also, manufacturing returned to growth after a weak performance in the previous period while construction contracted for the second quarter in a row.
ONS | Joana Ferreira | 10/25/2017 8:52:19 AM
The services aggregate was the main driver to the growth in GDP, contributing 0.29 percentage points. Production returned to growth, recording a rise of 1 percent in Q3, contributing 0.13 percentage points to GDP. Agriculture grew by 1 percent, contributing 0.01 percentage points to GDP due to the low industry weight. Offsetting these growths, construction contracted by 0.7 percent and contributed negative 0.05 percentage points.

Services expanded by 0.4 percent, the same pace as in the previous period. The main contributor to growth was the business services and finance sector, which increased by 0.6 percent (from 0.1 percent in Q2). Growth in this sector was broad-based, with employment activities being the largest contributor, recording an increase of 3.5 percent after a fall of 2.4 percent in Q2. Transport, storage and communications sector advanced by 0.1 percent (from 1.2 percent in Q2), boosted by computer programming activities, which rose by 1.9 percent, offsetting decreases in publishing activities and motion picture activities. Distribution, hotels and catering expanded by 0.4 percent, the same as in Q2, with wholesale trade and repair of motor vehicles being the main contributor to the growth. Government and other services rose by 0.1 percent (from 0.3 percent in Q2), with human health activities and education being significant contributors, reflecting their large weights within GDP.

Within production (1 percent from -0.3 percent in Q2), manufacturing advanced by 1 percent (-0.3 percent in Q2), due mainly to growth across a number of industries, including the manufacture of transport equipment, other manufacturing and repair and the manufacture of machinery and equipment. In addition, mining and quarrying went up by 1.5 percent (0.6 percent in Q2); electricity, gas, steam and air conditioning supply grew by 0.4 percent (-0.3 percent in Q2); and water supply, sewerage, waste management and remediation activities increased by 0.4 percent (-1 percent in Q2)

Construction output was estimated to have decreased by 0.7 percent, following a fall of 0.5 percent during Q2.

Agriculture output was estimated to have increased by 1 percent, rebounding from a drop of 0.1 percent in Q2. Agriculture is the smallest of the main industrial groups with a weight of less than 1 percent in the output measure of GDP.

Compared with the same quarter of 2016, the economy grew 1.5 percent, also better than market expectations of 1.4 percent.

UK Q3 GDP Growth Beats Expectations