UK GDP perks up in second quarter despite manufacturing recession

10 August 2018

(Sharecast News) - UK economic growth picked up as expected in the second quarter of the year in spite of the manufacturing sector technically tipping into a recession.
UK gross domestic product in the period from April to June grew 0.4% more than the first three months of 2018, which was in line with the Bank of England's prediction and the average forecasts of economists, picking up from the disappointing 0.2% growth in the first quarter.

The Office for National Statistics said that UK GDP was 1.3% higher compared to the second quarter last year, also as anticipated, up from 1.2% annual growth in the first quarter.

The services industries and construction increased by 0.5% and 0.9% respectively on the first quarter, while production decreased by 0.8%. Household spending grew by 0.3% and business investment rebounded to 0.5% from a 0.4% decline.

The ONS noted that the figures included the "second consecutive quarter of negative growth in manufacturing", meaning the sector was technically in a recession.

Head of National Accounts Rob Kent-Smith said: "The economy picked up a little in the second quarter with both retail sales and construction helped by the good weather and rebounding from the effects of the snow earlier in the year. However, manufacturing continued to fall back from its high point at the end of last year and underlying growth remained modest by historical standards.

"The UK's trade deficit noticeably worsened as exports of cars and planes declined sharply while imports rose."