UK Q3 2018 GDP increased by 0.6% (growing 3 times quicker than the Eurozone and at the fastest pace since 2016) but business investment fell

UK gross domestic product (GDP) in volume terms was estimated to have increased by 0.6% between Quarter 2 (Apr to June) 2018 and Quarter 3 (July to Sept) 2018.

In comparison with the same quarter in the previous year, the UK economy has grown by 1.5%, continuing its relatively subdued performance over the last year.

All four sectors of output contributed positively to growth in Quarter 3 2018, with the largest contribution from the services industries at 0.3 percentage points.

In the construction industry, output continued to recover following a weak start to 2018, which was in part impacted by the adverse weather. Output increased by 2.1% in Quarter 3 2018 – the fastest increase since Quarter 1 (Jan to Mar) 2017.

Output in the production sector rose by 0.8% in Quarter 3 2018, following a decline of 0.8% in Quarter 2 (Apr to June). While output increased across all four main production sectors, around half of total production growth in Quarter 3 was driven by manufacturing. Following two consecutive quarters of decline in the first half of 2018, manufacturing recovered in Quarter 3 to rise by 0.6%.

In the services industries, output growth eased to 0.4% in Quarter 3 2018, contributing 0.3 percentage points to growth in GDP. This is in line with average rates seen since the start of 2017, following the relatively strong growth of 0.6% in Quarter 2 2018.

Household spending grew by 0.5% while business investment fell by 1.2% between Quarter 2 and Quarter 3 2018.

Net trade contributed 0.8 percentage points to GDP growth in Quarter 3 2018, with a 2.7% rise in exports and flat growth in imports.

Nominal GDP increased by 1.1%, driven by growth in compensation of employees of 1.3% in Quarter 3 2018.

 

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