Economic Buzz: UK GDP Contracts By 0.2% In Q3

11 Nov 2022 , 02:54 PM

The UK economy contracted for the first time since early 2021 in the third quarter, first estimate from the Office for National Statistics showed on Friday. Gross domestic product shrank 0.2 percent sequentially, offsetting the 0.2 percent gain in the second quarter. The level of quarterly GDP was 0.4 percent below its pre-coronavirus level. The production-side breakdown showed that services output remained flat in the third quarter, while production output contracted 1.5 percent largely due to the 2.3 percent decrease in manufacturing. Meanwhile, construction output gained 0.6 percent. On the expenditure-side, household expenditure eased 0.5 percent, while government consumption gained 1.3 percent. Gross fixed capital formation grew 2.5 percent, underpinned by government investment. Business investment fell by 0.5 percent. Excluding the alignment and balancing adjustments, early estimates showed that inventories fell by GBP 11.3 billion. The trade deficit for goods and services improved to a 2.0 percent of nominal gross domestic product in the third quarter, the ONS said. In September, GDP dropped 0.6 percent, which was affected by the bank holiday for the State Funeral of Her Majesty Queen Elizabeth II, where some businesses closed or operated differently on this day. In September, industrial output gained 0.2 percent driven by the 1.5 percent rise in electricity and gas output and the 0.7 percent increase in mining and quarrying output. Water supply and sewerage gained 0.3 percent, while manufacturing remained flat.Powered by Commodity Insights