The latest economic output data from the Office for National Statistics shows that the UK economy grew by 0.6% in the third quarter of 2018. This follows growth of 0.4% in the second quarter and paints a picture of an economy which continued to improve, boosted by the warm summer weather. This is the highest rate of quarterly growth since the final quarter of 2016. Comparing these latest figures with the level of GDP in the corresponding quarter of 2017 shows that the economy increased by 1.5% over the last year.
Breaking the latest figures down by month shows that all the growth in the quarter occurred in July while August and September were flat. This is indicative of a temporary boost from the weather rather than a sustained upturn in consumer sentiment. In addition, while consumer spending remains strong, it is notable that business investment decline by 1.2%. This marks the third consecutive quarter where business investment declined. The last time this happened was in the immediate aftermath of the global financial crash in 2009.
With regard to the construction sector, the latest figures from the ONS indicate growth of 2.1% in the third quarter compared to the previous quarter.This followed growth of 0.8% in Quarter 2 and a fall of 1.6% in Quarter 1. These figures provide further evidence that the construction industry continued to bounce back from its poor performance in the first quarter of the year.
Growth in the third quarter was driven both by new work and repair and maintenance. One of the notable increases in the period was for new public housing with growth of 12.1% in the third quarter compared to the previous quarter. Meanwhile output in new housing increased by 5.7% in Quarter 3 compared to the previous quarter and was 9.6% higher than the same period in 2017.
The infrastructure sector also had a strong quarter with output increasing by 3.8% on the previous three month period and by 6.5% compared to the same period last year. Other figures to note are the strength of the non-housing repair and maintenance sector which increased by 3.3% in the third quarter. This was 6.2% higher than the same period in 2017.
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