Commenting on today’s GDP figures, Head of GDP Rob Kent-Smith said:
"GDP growth was flat in the latest three months, with falls in construction and manufacturing.
"While the largest part of the economy, services sector, returned to growth in the month of July, the underlying picture shows services growth weakening through 2019.
The trade deficit narrowed due to falling imports, particularly unspecified goods (including non-monetary gold), chemicals and road vehicles in the three months to July."
The services sector was the only positive contributor to GDP growth in the three months to July 2019, growing by 0.2%. Stronger growth in July 2019 in each of the main components of GDP, along with the weak production growth in April moving into the base period, meant that rolling three-month GDP growth was no longer negative, at 0.0%.
Output in both the production and construction sectors contracted, by 0.5% and 0.8% respectively. Within production, manufacturing fell by 1.1%.Nôl i'r tabl cynnwys
Rolling three-month growth was flat in July 2019, following growth of negative 0.2% in Quarter 2 (Apr to June) 2019.
Rolling three-month growth is based on output gross value added (GVA). There will therefore be discrepancies in the time series with our quarterly estimates of GDP, which include information on the expenditure and income approaches to measuring GDP.Nôl i'r tabl cynnwys
|May 2019||June 2019||July 2019|
|Index of Services||0.0%||0.0%||0.3%|
|Index of Production||1.2%||-0.1%||0.1%|
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GDP grew by 0.3% in July 2019, with all components apart from agriculture showing growth.
The monthly growth rate for GDP is volatile and so it should be used with caution and alongside other measures, such as the three-month growth rate, when looking for an indicator of the longer-term trend of the economy. However, it is useful in highlighting one-off changes that can be masked by three-month growth rates.Nôl i'r tabl cynnwys
The services sector continued to show subdued growth in the three months to July 2019, growing by 0.2%. This longer-term weakening has been most notable in “other services”, which has declined from the start of 2019. A number of industries have been driving this decline, such as administration and support services, human health activities, education, real estate, and transportation and storage. Information and communication, on the other hand, driven by computer programming, continued to do well throughout this period.
Services grew by 0.3% in the month of July, with widespread growth in a number of industries. The most notable of these was administrative and support service activities, which contributed 0.08 percentage points to GDP growth. However, this relatively large growth for services in July follows four consecutive months of flat growth in the sector.Nôl i'r tabl cynnwys
The production sector fell by 0.5% in the three months to July 2019. There has been significant volatility in this sector throughout the first half of 2019, largely driven by manufacturing, which fell by 1.1% in the most recent three months. Quarter 1 (Jan to Mar) 2019 saw strong growth as a result of work being brought forward ahead of the UK’s original planned date to exit the European Union. There was subsequently a fall in Quarter 2 (Apr to June) 2019, as the increased activity in Quarter 1 2019 unwound. This fall in Quarter 2 2019 was exacerbated by a decline in car production as a result of car production plants bringing forward their summer shut-downs. Elsewhere in production, electricity and gas performed well in the three months to July, growing by 2.8%.
Monthly growth for production was 0.1% in July 2019, with strength coming from the often-volatile manufacture of pharmaceutical products, which grew by 3.8%.Nôl i'r tabl cynnwys
Growth in construction was negative 0.8% in the three months to July 2019. This fall was driven by private housing repair and maintenance and public other new work, which fell by 6.3% and 6.2% respectively.
The month-on-month growth in July 2019 was 0.5%. This increase was driven by private new housing and public housing repair and maintenance, which grew by 4.4% and 7.8% respectively. The increase in private new housing coincides with a fall of 11.7% in public new housing, a reversal of the picture seen in recent periods.
Blue Book 2019
Each year, we produce an annual update to the UK National Accounts in the Blue Book and Pink Book and the associated releases. The Blue Book and Pink Book 2019-consistent datasets will be published on 30 September 2019. The publication of monthly gross domestic product (GDP) on 10 October will also incorporate these changes.
Details on the scope are available in the article, Latest developments and changes to be implemented in Blue Book and Pink Book 2019. Indicative impacts on headline GDP components for the years 1997 to 2016 were published on 27 June 2019 in the article, Blue Book 2019 indicative impacts on GDP current price and chained volume measure estimates: 1997 to 2016.
This year, owing to the very demanding set of changes being put through in the annual update, we are going to make an exception and are not going to fully reconcile 2017 annual data. Instead, we will produce an indicative balance to allow further time for final quality assurance of the data.
Consequently, the reference year and last base year for all chained volume measure series will remain as 2016.
A series of National Accounts articles were published on 20 August 2019 outlining some of the key methodological changes and their impact on quarterly GDP estimates quality and methodology.
The Gross domestic product (GDP) Quality and Methodology Information report contains important information on:
- the strengths and limitations of the data and how it compares with related data
- uses and users of the data
- how the output was created
- the quality of the output including the accuracy of the data
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