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GDP and the Labour Market, Q2 2011

Released: 26 August 2011 Download PDF

Contributions to GDP growth

Q1 and Q2, 2011

Contributions to GDP growth, Q1 and Q2, 2011

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UK output increases by 0.2 per cent

The second estimate of GDP growth for Q2, based on the output measure, remains at 0.2%. Within the estimate, the contribution to growth from the production sector was revised down slightly but this was offset by a small upward revision to service sector growth.

Growth in the service sector remained at 0.5 per cent in the second estimate of Q2 GDP, unchanged from the first estimate. However, within the service sector, there was a downward revision to transport and communications offset by upward revisions to distribution, hotels and catering, business services and finance and government and other services. More specifically, weakness in the service sector came from post and telecommunications, financial intermediation and other services. But there was solid growth in the hotels and restaurants sector, transport and storage, business services and public services.

In the production sector, growth has been revised down from -1.4 per cent in the first estimate to -1.6 per cent in the second. The main component, manufacturing, contracted in Q2 by 0.5 per cent which is a downward revision to manufacturing growth between the first estimate and the second estimate of 0.2 percentage points. Weakness in manufacturing may be due to supply chain disruption as a result of the natural disaster in Japan. It may also reflect the global slowdown in manufacturing. There was a downward revision to growth in the mining and quarrying sector, offset by an upward revision to growth in the utilities sector.

The performance in the construction industry was one of two halves in 2011 Q2, with ‘new work’ growing by 2.4% compared to repair and maintenance work contracting by 3.2%, with the aggregate industry level growth remaining unrevised at 0.5 per cent. The growth in ‘new work’ was due to new public and private sector housing, infrastructure and commercial work. The weakness in ‘repair and maintenance’ was reflected in all the sub-components of housing and non-housing repair and maintenance. Despite the government’s fiscal consolidation programme, public sector new housing made a positive contribution to construction growth, although growth in public sector housing has been weakening in the last four quarters.

Employment and GDP growth

Q2 2011, UK

Employment and GDP growth, Q1 and Q2, 2011

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The labour market weakened in 2011 Q2 with the unemployment rate rising

The employment level increased by 25,000 in 2011 Q2, while the employment rate was unchanged from 2011 Q1 at 70.7 per cent. Compared to the same quarter last year the employment rate has risen 0.2 percentage points with 251,000 more people in employment.

The increase in total employment this quarter was driven by an increase of 49,000 in full time employment. The number of people in full-time employment stands at 21.35 million in 2011 Q2. This compares to a reduction in part time employment of 24,000 bringing the total number of those working part time to 7.92 million.

Self employment increased by 24,000 and employees increased by 36,000 in 2011 Q2. These increases were partly offset by declines in government supported trainees and unpaid family workers, resulting in the rise in employment of 25,000.

Unemployment has increased by 38,000 quarter-on-quarter with the unemployment rate rising on the quarter to 7.9 per cent but virtually unchanged compared to 2010 Q2. 

The claimant count rose 37,000 in July 2011 taking the total number claiming to 1.56 million, approximately 100,000 higher than July 2010.

In Q2 2011, vacancies fell 25,000 to 458,000. Vacancies are 26,000 lower than 2010 Q2.

Source: Office for National Statistics

Background notes

  1. Sources:
    Gross Domestic Product (ABMI): chained volume measures, seasonally adjusted, Office for National Statistics.

    Total employment level (MGRZ), self-employment level (MGRQ), full time employment level (YCBE), part-time employment level (YCBH): Labour Force Survey, all those aged 16 and over, seasonally adjusted, Office for National Statistics.

  2. GDP estimate for quarter two from Gross Domestic Product: Second Estimate – Q2 2011 published on 26 August 2011.

    Most recent Labour Market estimates are available from the Labour Market Statistical Bulletin published on 17 August 2011.

  3. Details of the policy governing the release of new data are available by visiting www.statisticsauthority.gov.uk/assessment/code-of-practice/index.html or from the Media Relations Office email: media.relations@ons.gsi.gov.uk

Content from the Office for National Statistics.
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