We finish off the year today with some mixed news. ONS released their third estimate of GDP today. Main changes in today's release:
- GDP revised down by 0.1 percentage point to 0.9%.
- Manufacturing GDP revised to 0.7%, down from 0.9% in the previous estimate.
- Business investment stats remaining strongly positive and revised slightly upwards from 3.7% to 3.8%.
This is the first quarter for a long while in which all expenditure components of GDP made positive contributions to growth, as shown in the chart below. As we have mentioned in previous blogs, much of this is the result of a bounce back after disruptions in q2 that were caused by the Jubilee and the Olympics.
Contribution to growth, quarter-on-quarter, for the expenditure components of GDPCVM SA
The outlook is not looking as positive as we would like going into 2013. We know from our business trends survey and the weak PMI that manufacturers will still be facing tough conditions nest year. The Monetary Policy Committee are predicting a contraction in headline GDP in the fourth quarter of 2012 and the underlying output in the near term to be broadly flat. However, output and investment are expected to begin to pick up further over the next two years.
Merry Christmas and Happy New Year from the EEF economics team!