Economic growth in the UK slowed to 0.5% in the third quarter this year according to the latest seasonally adjusted Gross Domestic Product: Preliminary Estimate, Quarter 3 (July to September) 2015 released by the Office for National Statistics (ONS) on Tuesday.
The slowdown is said to be a result of a decline in construction growth of 2.2%, which could have been influenced by particularly wet weather in August, along with a 0.3% fall in manufacturing.
However the ONS expenditure, household and economic indicators show that GDP is estimated to have increased by 0.5% in the third quarter of 2015, compared with growth of 0.7% in the second quarter (April to June) 2015. ONS added that change in gross domestic product (GDP) is the main indicator of economic growth.
In the third quarter of 2015, three of the main industrial groupings within the economy saw an increase in output, with services rising by 0.7%, production up by 0.3% and agriculture increasing by 0.5%. There was also a 2.4% increase in mining and quarrying, as well as a 1.2% increase in water and waste management.
GDP was estimated to have been 6.4% higher in the quarter, when compared the pre-economic downturn peak of the first quarter of 2008. The UK economy reportedly shrank by 6.1% from its peak in 2008 to the trough in the second quarter of 2009.
According to the BBC, analysts had predicted that a growth of 0.6% was predicted by several analysts, but the largest fall in construction output in three years has resulted in a slower than expected growth in the economy.
Chris Williamson, chief economist at research firm Markit, was quoted as stating: “The slowdown is being led by the manufacturing sector, which is seeing a renewed recession as output has now fallen for three consecutive quarters, suffering a 0.3% decline in the three months to September.” He added: “Manufacturing output has so far fallen 0.9% this year. Producers are struggling as weak demand in many overseas markets, notably China and other emerging nations, is being exacerbated by the appreciation of sterling.”
Deputy chief Economist at EEF, the manufacturers’ organisation, Zach Witton, was reported as saying: “The news wasn’t wholly negative, with bright spots including transport equipment doing well thanks to a backlog of aircraft orders and manufacturers still maintain some, albeit muted, confidence about their longer-term business prospects.”