Friday, August 23, 2013
Growth stronger, better balanced
Posted by David Smith at 01:00 PM
Category: Thoughts and responses

Gross domestic product rose by 0.7% in the second quarter, up from an initial estimate of 0.6%, and the figures suggest that growth was well-spread, with an increase in all the main expenditure components of GDP, including exports and investment. GDP was up 1.5% on a year earlier.

Contributions to the 0.7 point rise in the expenditure measure of GDP included a 0.2 point contribution from consumer spending (financed out of a strong bonus-related rise in income), 0.2 from investment, 0.3 from net trade and 0.2 from government. Other components subtracted marginally from growth.

By output category, services rose by 0.6% on the quarter, manufacturing by 0.7% and construction by 1.4%. More details on this encouragingly balanced growth here.

There was also a rise in investment, including business investment. According to the ONS: "In volume terms gross fixed capital formation increased by 1.7% when compared with the previous quarter to 52.4 billion and business investment increased by 0.9% to 29.5 billion." There is still a long way to go for any kind of investment-led growth but it is a start.