Britain's quarterly economic growth was confirmed at 0.5 percent in the first quarter of 2019, above the previous three-month period's figure of 0.2 percent. Household expenditure, government consumption and investment contributed positively to GDP growth, while net trade contributed negatively.
Private consumption increased by 0.6 percent in the first quarter, revised down slightly from the first estimate of 0.7 percent. Household consumption of miscellaneous goods and services, which includes spending on other financial services, increased by 2.9 percent, following a fall of 1 percent in Q4 2018. Miscellaneous goods and services made the largest overall contribution to household consumption in the first quarter of the year, largely as a result of increased expenditure on other financial services.
Government consumption is estimated to have increased by 0.8 percent, revised down from the first estimate of 1.4 percent and following an advance of 1.3 percent in the previous quarter. This increase reflects widespread growth in a number of areas including health, which increased by 0.6 percent, and other functions of central government, such as general public services and economic affairs.
Gross fixed capital formation (GFCF) increased by 1.2 percent in the first three months of 2019, revised down from the first estimate of 2.1 percent. This primarily reflects revisions to government investment, which is now estimated to have increased by 5.2 percent, compared with its previous estimate of 8.1 percent, due to initial budget estimates being replaced by provisional financial year data. The quarterly increase was due to increases across a number of central government departments. Following four consecutive quarters of decline throughout 2018, business investment grew by a revised 0.4 percent in the first quarter of 2019 – revised downwards by 0.1 percentage points compared with the first quarterly estimate. At an asset level, investment in other buildings and structures has been the main contributor to growth. Some of the growth in the investment in buildings has been offset by a fall in investment in transport, which continued its recent decline in the first quarter of the year.
The UK trade deficit widened to £21.58 billion, or 3.7 percent of GDP, the widest quarterly deficit on record. Exports rose 1.5 percent while imports jumped 10.8 percent, largely a reflection of the sizeable increase of imports of unspecified goods, which includes non-monetary gold (NMG). Excluding unspecified goods, the trade deficit was at 1.7 percent of GDP.
On the production side, industrial output increased by 1.1 percent in the first quarter, rebounding from a 0.8 percent contraction in Q4, within which manufacturing output increased by the most since Q3 1999 (1.9 percent vs -0.7 percent in Q4). Services output growth slowed to 0.4 percent from 0.5 percent, while construction output increased by 1.4 percent, compared to a 0.5 percent fall in Q4. Output of the agriculture, forestry and fishing sector fell by 1.4 percent (vs 0.6 percent in Q4), providing the only negative contribution to growth.
ONS | Joana Ferreira | joana.ferreira@tradingeconomics.com
6/28/2019 8:59:15 AM