GDP Falls Over The Quarter, Record Fall Over The Year

The final estimated UK GDP in volume terms increased by 0.3% on the previous quarter, the same as it was estimated in the previous estimate in May. GDP fell in volume by a record 4.9% during 2009. The household saving ratio was 6.9% and real household disposable income rose by 0.4% following a fall of 1% in the previous quarter.

GDP output by category shows that in agriculture, forestry and fisheries output fell by 2.2%. The production industries increased output by 1% over the quarter but output fell by 10.2% over 2009. Mining and quarrying output fell by 0.5% but manufacturing output rose by 1.4%. Electricity, gas and water utilities output increased by 0.4% but construction decreased by 1.6%. Services increased output by 0.3% but output in 2009 fell by 3.3% on 2008 while distribution, hotels and restaurants fell in all sub-categories and by 0.7% overall. Transport, storage and communication increased output by 0.2% due to weaker growth in land transport and post and telecommunications. Business services and finance output increased by 1% due to stronger growth in banking, renting and real estate. Government and other services reported an unchanged level of growth with output in health and social care increasing by 0.5% and other services increasing by 0.2%. Education decreased by 0.6% and public administration and defence output fell by 0.3%.

GDP can also be analysed using expenditure categories. Gross domestic expenditure incrrased by 1.2%. Household final consumption expenditure fell by 0.1% and so the volume of spending in 0.2% lower than Q1 2009. Government final consumption expenditure increased by 1.5% from 0.1% in the previous quarter. Gross fixed capital formation increased by 4.4% compared with a fall of 1.7% in the previous quarter. The increase was mainly due to an increase of 7.8% in business investment which is still 7.7% lower than Q1 2009. General government investment increased by 6.5%. In 2009 gross fixed capital formation decreased by 15% compared with 5% a year earlier. Inventories decreased by £2.2bn. The trade deficit increased to £10.4bn.

The GDP implied deflator at market prices was 2.9% above the same quarter 2009 and increased by 1.7% over the quarter 2010. GDP at market prices increased by 2.1% over the quarter but fell by 3.7% in 2009.

Final GDP Figures Give A Better Picture

The final GDP figures for the third quarter of 2009 have revised the GDP at market prices headline figure in volume of a fall of 0.4% to a fall of 0.3%. It means that the figures for comparison with the same quarter last year also change from a fall of 5.1% to 5.2%. other revisions include growth in production output revised down to a fall of 0.8% from 0.7% within which manufacturing output was revised up to a fall of 0.1% from 0.2% published last month. The service sector also looks a bit better since the growth in volume of output was revised to show a fall of 0.1% from the original 0.2% published in October. Revisions of distribution and transport services were also revised upward. The GDP deflator is 2% above the same quarter in 2008 and up from 1.1% on the previous quarter. Revisions are made as more completed surveys are returned. The figure given in October for output growth in agriculture of -1.6% has had to be revised to a fall of 2.5%, a downward revision of 0.9%. These are the figures that will go into the Quarterly National Accounts.

GDP Decline Revised Upwards

GDP fell by 0.7%, revised from 0.8%, in the second quarter of 2009 compared with the previous quarter. GDP is 5.5% lower than Q2 2008. It is the biggest four quarter fall on record accoring to the ONS. Nominal GDP showed no growth for the quarter. The GDP deflator rose by 1.3% compared with Q2 2008.

The slowdown in output from Q1 to Q2 is due to the services, production and construction sectors. Services fell by 0.6%, production by 0.6% and construction by 2.2%.

Household expenditure fell by 0.7%. An increase in spending on motor vehicles, food and drink was offset by the continued edcline of spending abroad. Government expenditure rose by 0.8%. The volume of spending is 2.5% higher than Q2 2008. The net trade deficit fell to £7.3bn as imports fell faster than exports at 3.7% and 2.6% respectively. The export of services fell by 2.6% and the import of services by 1.9%. Gross fixed capital formation fell by 4.5%.

Employee compensation increased by 1% in the quarter, but still 1.2% below the same quarter last year. The gross operating surplus of corporations decreased by 3.6% following a 4.5% fall in Q1 2009. Taxes less subsidies increased by 3.6%. There was no change in the growth of nominal GDP at market prices.