Positive upwards revision to annual growth in 2012
While the third estimate of GDP for 2012q4 came in unchanged at -0.3%, upward revisions to the first and third quarter have raised annual growth from flat to positive 0.2% for 2012. The largest upward revisions were made to the agriculture and construction sectors.
However, investment and trade remain weak
Unfortunately, looking below this figure makes it clear that the investment and trade led recovery has yet to eventuate. We see that over the past year growth was held up by consumption and government, which each positively contributed 0.6% to GDP. Total investment was flat but there was a positive contribution to grow of 0.4% from business investment. Net trade, by contrast, was the weakest expenditure component of GDP, with a negative contribution of 0.8% to GDP.
% contributions to growth, quarter-on-quarter and year-on-year
Manufacturing investment also fell in 2012
Manufacturing investment contracted by 1% last year after strong growth of over 12% in 2011. This 2012 result is out of line with the continuing positive balance of investment intentions that we have seen in EEF's Business Trends results over the past year. Early next week EEF will be publishing a report presenting findings from a new investment survey and setting out what needs to be done to encourage more globally focused companies to invest and expand in the UK.