GDP revisions round 2

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Not much new to report from ONS on the economy as far as the third quarter of 2013 goes, but further revisions to data covering the previous 18 month period make for somewhat better reading.

Looking in the rearview mirror, UK GDP growth has been a bit less feeble than thought through 2012 and early 2013. The chart below shows the upward revisions made to five out of the past seven quarters. That pushed up growth in 2012 to 0.3% (from 0.1% previously) and the year on year growth rate to 2013q3 stands at 1.9% (up from 1.5%).

This also means that the UK economy is 2% smaller than is was at the beginning of 2008 - slowly making up lost ground.

% quarter on quarter change

Source: National Statistics

Spot the problem

So far, so not too bad.

The latest business investment numbers also looked a shade better for the three months to September, with growth now pencilled in at 2% (up from 1.4%). Nevertheless, investment is the component of the UK economy that isn't even limping back to pre-recession levels. There has not been two consecutive quarter of expansion in investment since the first half of 2009 and it remains a quarter down on 2008q1.

2008q1 = 100

Source: National Statistics

We don't yet have any offical sector investment data - but looking at investment by asset, expenditure on plant and machinery (most likey to be manufacturing related) has fared the worst over the past five years - it is 35% down on pre-recession levels (compared with 2.5% for intangible assets and 22% down for vehicles).

While the past is starting to look a bit better all the time, long-term future growth prospects look more uncertain the longer a recovery in investment is delayed.

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