No major revisions to the GDP data for the final quarter of 2013 in today's ONS release.
The UK economy enjoyed its first four-quarter run of growth in over three years in 2013, with the ONS confirming that real GDP rose by a respectable 0.7% in the final three months of last year. In contrast with recent quarters, output was supported by both business investment and net exports, offering some encouragement for a more balanced pattern of growth going forward. Here are the main points.
Real GDP up 0.7% in Q4 and rises 1.7% over 2013 as a whole
- Positive contributions to Q4 growth from private consumption, fixed investment and net exports
- Manufacturing growth in Q4 revised down marginally to 0.6% (from 0.7%)
- Real GDP growth in 2013 revised down marginally to 1.7% (from 1.8%)
- Real GDP remains 1.4% below pre-crisis level
- Household consumption up 2.2% in 2013, largest rise since 2007
- Business investment down 1% in 2013
- Households' saving ratio fell to 5.1% in 2013 (from 7.3% in 2012)
Manufacturing growth (%, quarter on quarter)
Exports and business investment up, household savings down
A rise in manufactured goods exports, especially finished manufactures, contributed to a 2.8% quarterly increase in overall exports in Q4. With imports edging lower over the quarter, the trade balance contributed a healthy 1 percentage point to GDP growth in Q4, its strongest contribution in two years.
A second consecutive quarterly rise of 2.4% in business investment confirmed the modest pick-up in capital spending during the second half of last year, although business investment still declined slightly over 2013 as a whole.
The largest component of UK expenditure, household consumption, increased for a ninth consecutive quarter, up 0.4% in Q4. A further fall in households' saving ratio raises some concern, however, over the durability of the consumer recovery, especially as the boost to household finances in recent years from banks' payment protection insurance (PPI) pay-outs is nearing an end.
Households' saving ratio (% of GDP)
While some uncertainty is likely to persist over the medium-term outlook, a range of sentiment indicators — including our latest Business Trends Survey — suggest that businesses have begun 2014 in positive mood, with near-term activity in the manufacturing sector and across the wider economy again expected to continue to rise at a healthy clip. Our latest forecasts point to growth of 0.8% across manufacturing in the first three months of 2014, which would be the fourth consecutive quarter of robust expansion.