Not too much excitement in today’s second estimate of GDP which left output growth unchanged at 0.5% q-on-q.
Net trade back to its old ways
Net trade returned to its old ways of dragging on growth and detracted 1.5pp in Q3, more than wiping out any gains made from a solid Q2. This was down to a big surge in imports of 5.5% q-on-q, and exports growth slackening to 0.9%, as weakness in global trade and a strong sterling took their toll.
Business investment remains solid
Despite business confidence having taken a blow over the past quarter due to a build-up in global headwinds, private sector investment remains robust. Business investment grew by 2.2% q-on-q, now racking up four consecutive quarters of growth.
Total investment also returned to growth after falling by 7.1% q-on-q in Q2. The fall in the previous quarter was down to a running down of inventories, with fixed investment remaining positive. Total investment therefore contributed 1.2pp to quarterly growth, making up for most of the drag in Q2.
We won’t be getting a sectoral breakdown of the business investment figures until the final GDP estimate is published two days before Christmas.
Manufacturing contracts yet again
Manufacturing output growth was revised down to -0.4% q-on-q in line with the Index of Production figures released earlier in the month. This marks the third consecutive quarterly drop in manufacturing output, and unless we are in for a big upside surprise in Q4, it’s now likely to end the year in the red.