Undoubtedly sparking some debate on the election campaign trail is the preliminary estimate of GDP growth in the first three months of the year.
Expectations had been well and truly managed with weak data releases coverage production and construction in January and February. The maths was always going to lead to a weaker outturn compared with the quarterly rates of growth the UK was looking at in 2014 – when we were the fastest growing developed economy.
The headlines were –
- GDP expanded by 0.3% in 2015 q1 compared with the previous quarter. This put output across the economy 2.4% up on a year ago.
- Services expanded 0.5% on the quarter and manufacturing output increased by 0.1%.
- Leading the falls were mining and quarrying (down 2.1%) and construction (down 1.6%)
And the main takeaway from the data?
We’ve again got primarily service sector driven growth in the first quarter of the year. Manufacturing business surveys had come off the boil, but were nevertheless consistent with another quarter of growth – weakening activity in the oil and gas supply chain and lacklustre export markets on the downside have been fighting against better domestic demand and stronger consumer confidence.
However, ONS describe this as preliminary data for a reason. We’ll get more information on investment and exports in a month’s time and this will most likely be accompanied by some revisions to the components of growth, if not the headline number.
Still, as far as chat on the campaign trail goes, any political interpretation of the past from these numbers is less useful than detail from all the parties on how they will work to deliver a competitive and predictable business environment for businesses to invest, innovation, recruit and train – the foundations of growth in future.