All sectors of UK economy grow again – Office of National Statistics latest figures

Office of National Statistics preliminary estimates of Gross Domestic Product (GDP) in the three months to September indicate total output grew by 0.8%.

All the three main sectors made positive contributions to growth for the second consecutive quarter. The output of the services sector grew by 0.7%, while the production and construction sectors both contributed 0.1 percentage points to quarterly growth. The last time all three sectors expanded simultaneously for two consecutive quarters was in mid-2010.

The data indicate that UK output growth continues to be driven largely by the performance of the services sector.

Taken together, Business Services & Finance and Distribution, Hotels & Restaurants accounted for more than half the growth recorded during the three months to September, and services output as a whole is now above its pre-downturn peak (see Figure 1 – right).

The path of output in the construction sector has fluctuated more than the other main sectors since the start of the economic downturn in 2008. Following a sharp fall in output during 2008 and 2009, the sector recovered strongly in 2010 and 2011 before falling into a renewed contraction in 2012. Stronger activity in the housing market during 2013 has helped to raise the level of construction output by 4.9% since Q3 2012.

New work components of construction output indexed to their level in Q1 2008, which suggests that public sector and infrastructure construction output increased sharply following the onset of the economic downturn.

In particular, the volume of infrastructure output increased by more than 50% between Q1 2008 and Q1 2010, as policy-makers sought to cushion the impact of the economic downturn by bringing forward public sector investment plans and as preparations for the Olympic & Paralympics Games progressed.

However, this effect has been less evident since 2011. In Q2 2013, infrastructure output was 17.0% below its peak level in Q2 2011, albeit well above the average level between 2004 and 2008.