Unless you have been living on Mars, you will know the last few months have been a bit tricky. But how bad was it really? Now the first version of the official statistics are out. And this is what they say.
The UK grew by 0.4 per cent in the first quarter of this year. That’s the slowest rate of expansion since the first quarter of 2005. The worst performers were mining and the energy sector down by 5.2 and 1.2 per cent each. Services expanded by 0.6 per cent, and manufacturing by 0.5 per cent.Construction expanded by 0.5 per cent too.
The annual rate of growth was 2.5 per cent, the slowest rate since the final quarter of 2005.
So far then, it’s not good, but not that bad either.
Looking forward, the falling pound should help manufacturing, but then again surveys are suggesting that despite improving exports, the sector is still struggling.
With news last week that Persimmon has put its plans for building new homes on hold, it seems likely that the construction sector will not continue to expand indeed it could contract quite sharply, while plummeting consumer confidence is bound to mean falling consumer spending which will drag both services and manufacturing back.
Capital Economics says it expects growth of around 1.7 per cent this year to be followed by just 1 per cent or so in 2009, with a significant chance (perhaps 1-in-3) of a technical recession.
That one-in-three chances of a recession is a tad worrying. This time last year Alan Greenspan put the chances of a US recession at a similar level and we all know what happened next. If the UK is set to follow the US downwards, then the next few months should see growth projections downgraded again.
The next few months, then, will tell us a great deal.
© Investment & Business News 2013