UK Monthly Economic Review January 2014 (Based on December 2013 data releases)
Monthly headlines: Annual UK economic growth revised up for Q3 2013, QES indicates more growth in Q4 BCC forecasts that the UK economy in 2014 will grow at its fastest rate since 2007 UK's trade position deteriorates and the public finances remain weak
08/01/2014
2013 Q3
2013 Q1
2012 Q3
2012 Q1
2011 Q3
2011 Q1
2010 Q3
2010 Q1
2009 Q3
2009 Q1
2008 Q3
-2
2008 Q1
0 2007 Q3
GDP Growth %
2
-4 Quarterly growth Annual growth
-6 -8
Source: ONS Quarterly National Accounts, Q3 2013
Chart 2: UK GDP by Sector, Q3 2013 3 2 1 0 Agriculture
Production
Construction
Services
-1 -2 -3 -4
Source: ONS Quarterly National Accounts, Q3 2013
Chart 3: UK Manufacturing and Services Output 10
6 4
5
2 Aug-13
Oct-12
Mar-13
May-12
Dec-11
Jul-11
Feb-11
Sep-10
Apr-10
Nov-09
Jan-09
Jun-09
Aug-08
Oct-07
-5
Mar-08
0 0 -2 Manufacturing
-10 -15
UK Economic Review
Services (RHS)
Annual change %
...while improving official sector level data... Industrial output rose by 0.4% in October, with manufacturing production, which also increased by 0.4% in the month, the largest contributor to total production growth. In annual terms, manufacturing output rose by 2.7% in October, the biggest rise since May 2011 (see Chart 3). This is in line with the QES which also indicates an improving picture for the sector. Output from the service sector grew by 0.1% in October and by 2.1% in annual terms. Construction output, which accounts for around 6% of UK economic output, grew 2.2% in October.
4
Quarterly Growth %
...and growth recorded across the economy... The rise in UK GDP in Q3 2013 was broadly based with three - services, production and construction out of the four main sector groupings recording growth (see Chart 2). The agricultural sector (-3.2%) recorded the only decline. The service sector, which accounts for over three-quarters of UK economic output, remains the key driver of growth with output rising by 0.8% in Q3. This mirrors the positive services balances recorded in the Quarterly Economic Survey (QES). Construction output grew by 2.6% and industrial production rose by 0.6% in Q3.
Chart 1: Real GDP Growth
6
Annual change %
Annual UK economic growth revised up... The third official estimate of economic growth (GDP) for Q3 2013 was unrevised at 0.8%. However, due to upward revisions for previous quarters, the UK's economic performance over the past year was better than previously thought. In annual terms, the UK economy grew by 1.9% in Q3 (see Chart 1), up from the previous estimate of 1.5%. UK GDP is now estimated to be 2% below its pre-recession peak in Q1 2008, an improvement on the previous estimate of 2.5%. We expect UK GDP to surpass its prerecession peak in the second half of 2014.
-4 -6
Sources: ONS Production, Services and Construction Statistics, October 2013
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