UK Q1 2019 GDP growth estimated at 0.5% (QoQ) and 1.8% (YoY); Manufacturing output soars; Trade deficit widens

UK gross domestic product (GDP) in volume terms was estimated to have increased by 0.5% in Q1 (January to March) 2019. In comparison with the same quarter a year ago (Q1 2018) UK GDP increased by 1.8%, the fastest growth since Q3 2017.

Main points:

• Growth in the services sector slowed to 0.3% in the quarter.
• There was a noticeable pickup in growth in the production sector, driven by growth of 2.2% in manufacturing output.
• Private consumption, government consumption and gross capital formation contributed positively, while net trade contributed negatively to GDP growth.
• The trade deficit widened to 3.4% of nominal GDP in Q1 2019.
• Gross fixed capital formation increased by 2.1% in the quarter, with strong growth in government investment.
• Business investment increased by 0.5% in Q1 2019 following four quarters of contraction.

 

Manufacturing output soars

Production output increased by 1.4% in Q1 2019, within which manufacturing output increased by 2.2%. Services output growth slowed to 0.3% in Q1 2019, while construction output increased by 1.0%. Output of the agriculture, forestry and fishing sector fell by 1.8%, providing the only negative contribution to growth.

 

Trade deficit widens

The trade deficit widened to 3.4% of nominal GDP in Q1 2019.Export volume growth was flat, while import volumes increased by 6.8%, resulting in net trade being a significant drag on GDP growth in the quarter.

Trade in goods exports grew by 4.5% in Q1 2019, reflecting increases in machinery and transport equipment and miscellaneous manufactures, while trade in services exports fell by an offsetting 5.0% due to falls in telecommunications, computer and information technology, intellectual property and other business services. The rise in imports reflects a 11.0% increase in trade in goods imports, partially offset by a 4.4% fall in trade in services imports.

 

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GDP Related:

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U.S. Q1 2019 GDP growth estimated at 3.2%; Real disposable personal income growth slowed to 2.4%; Personal saving rate at 7%