Britain's recession might not be as deep as feared after better-than-expected construction figures raised the chance that official GDP figures for the second quarter would be revised up.
Britain's recession might not be as deep as feared after better-than-expected construction figures raised the chance that official GDP figures for the second quarter would be revised up.
The Office for National Statistics estimated last month that the economy shrank by 0.7pc between April and June, partly based on the assumption that construction output fell by 5.2pc over the quarter.
Since then the ONS has had chance to gather more data for June, and said on Friday that construction output actually fell by 3.9pc in the second quarter. The construction data alone would suggest a 0.1 percentage point upward revision in GDP.
On Tuesday the ONS also revised up its estimate of industrial production, so combined with the construction data economists said the economy might have shrunk by 0.5pc between April and June, and not 0.7pc.
The ONS will publish its first revision of second-quarter GDP on August 24."These revisions do little to change the overall size of the renewed recession.
What’s more, the smaller than expected drop in GDP in the second quarter is likely to mean that the bounce-back in the third quarter will be weaker than otherwise," said Samuel Tombs, UK economist at Capital Economics.
Construction was hit in the second quarter by a combination of factors, including the unseasonably wet weather and the extra bank holiday given for the Queen's Diamond Jubilee celebrations which disrupted work.
However, the sector is also suffering from weak demand, the end of Olympic work, and the Government's austerity drive.
Economists at Barclays said they now expected the economy to shrink by 0.2pc in 2012 as a whole, and not by 0.3pc as previously forecast.
telegraph.co.uk
Britain's recession might not be as deep as feared after better-than-expected construction figures raised the chance that official GDP figures for the second quarter would be revised up.
The Office for National Statistics estimated last month that the economy shrank by 0.7pc between April and June, partly based on the assumption that construction output fell by 5.2pc over the quarter.
Since then the ONS has had chance to gather more data for June, and said on Friday that construction output actually fell by 3.9pc in the second quarter. The construction data alone would suggest a 0.1 percentage point upward revision in GDP.
On Tuesday the ONS also revised up its estimate of industrial production, so combined with the construction data economists said the economy might have shrunk by 0.5pc between April and June, and not 0.7pc.
The ONS will publish its first revision of second-quarter GDP on August 24."These revisions do little to change the overall size of the renewed recession.
What’s more, the smaller than expected drop in GDP in the second quarter is likely to mean that the bounce-back in the third quarter will be weaker than otherwise," said Samuel Tombs, UK economist at Capital Economics.
Construction was hit in the second quarter by a combination of factors, including the unseasonably wet weather and the extra bank holiday given for the Queen's Diamond Jubilee celebrations which disrupted work.
However, the sector is also suffering from weak demand, the end of Olympic work, and the Government's austerity drive.
Economists at Barclays said they now expected the economy to shrink by 0.2pc in 2012 as a whole, and not by 0.3pc as previously forecast.
telegraph.co.uk
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