The Office for National Statistics (ONS) has today released its preliminary estimate for the UK’s gross domestic product (GDP) for January to March 2018. Here is a summary of the main points.
The UK economy grew by 0.1% in the first quarter of 2018, marking the weakest quarterly growth since Q4 2012. The weakness in Q1 2018 was driven by a sharp decline in construction output and a sluggish manufacturing sector, while growth in the services industry also slowed.
While today’s figures suggest that recent heavy snow had a negative impact on some areas of the economy, such as construction and parts of the retail trade, the overall impact of adverse weather conditions on output in Q1 2018 was relatively small.
Fall in CPI growth rate
The 12-month growth rate for the Consumer Prices Index including owner occupiers’ housing costs (CPIH) fell to 2.3% in March 2018. The change was driven mainly by the clothing and footwear and alcoholic beverages and tobacco categories. In February 2018, the latest month for which data is available, the 12-month growth rate for house prices in London fell to negative 1.0%. This was its first month of annual contraction since September 2009, continuing a recent broad trend of slowdown that started in 2014.
Employment rate at record high
The unemployment rate was at 4.2% in the three months to February 2018, a record low since 1975. The employment rate was at a record high in December 2017 to February 2018, at 75.4%. Since the economic downturn there has been an increase in the responsiveness of employment to economic growth. Industries with high employment intensity of growth help contribute to the growing employment and low unemployment.
Commenting on today’s GDP figures, Rob Kent-Smith of the Office for National Statistics said: “Our initial estimate shows the UK economy growing at its slowest pace in more than five years, with weaker manufacturing growth, subdued consumer-facing industries and construction output falling significantly.
“While the snow had some impact on the economy, particularly in construction and some areas of retail, its overall effect was limited, with the bad weather actually boosting energy supply and online sales.”
For more details about this initial estimate of GDP, email me or call me on 020 7099 2621.