UK Third-Quarter GDP Rises as the Sun Shines

The sunny summer that started in July and lasted for about three months seems to have done wonders for the British economy.

A look at the UK’s third-quarter gross domestic product reveals that the sectors that grew the most, contributing to the healthy 0.8 percent quarter-on-quarter and 1.5% year-on-year expansion, are those that depend heavily on the weather.

In construction (helped as well by the government’s schemes to prop up the housing market), output rose by 2.5 percent in the third quarter after advancing by 1.9 percent in the second quarter, figures from the Office for National Statistics (ONS) showed.

Construction output jumped by 4.9 percent compared to the third quarter of last year.

In services, distribution, hotels and restaurants increased by 1.3 percent quarter-on-quarter and by 3.8 percent year-on-year, with retail providing the biggest contribution.

Retailers keep blaming the weather when sales fall but judging by traffic jams near retail parks this summer, they must have had good sales in the July and August heat.

Agriculture does not contribute much to UK GDP but it is worth mentioning that output increased by 1.4 percent in the third quarter from the second, after rising by 2% in the second quarter.

However, it posted a decrease of 1.6% compared with the third quarter of 2012 – although judging by the excellent taste of strawberries this year, one wonders how that was possible.

According to the ONS, services contribute by 77.8 percent to GDP growth, production by 15.2 percent, construction by 6.3 percent and agriculture by just 0.7 percent.

The third-quarter GDP figures are a preliminary estimate. “Data content is less than half of the total required for the final output estimate,” the ONS said in its statement.

This probably means that things could get better, at least judging by other releases, such as the one showing a healthy increase in services in August.

Services rose by 1.5 percent in August this year compared to the same month last year, with distribution, hotels and restaurants jumping by 3.5 percent, business services and finance rising by 2.1 percent and transport, storage and communication advancing by 1.4 percent.

Government and other services decreased by 0.4 percent as fiscal austerity continues.

1 thought on “UK Third-Quarter GDP Rises as the Sun Shines

  1. Clarityeconomic

    Very accurate report of the GDP figures which are strong. However it’s worth bearing in mind that the economy is still 2.5% smaller than at the start of the economic crisis. Since the cake is smaller workers have to take pay cuts (real or nominal) to stay in work which probably means it will take a long time for the economy – and households – to catch up that lost wealth. This is probably where the general election will be fought (at least in terms of the economy).

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