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GDP and the Labour Market, Q2 2012 - August GDP Update

Released: 24 August 2012 Download PDF

GDP and Employment, seasonally adjusted

GDP and Employment, seasonally adjusted
Source: Office for National Statistics

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The revised fall of 0.5 per cent in the second quarter of 2012 is the third consecutive quarterly contraction in GDP, and consequently output has now fallen by 0.5 per cent during the last year. During the second quarter, the three main sectors of the economy contracted, with construction providing the largest negative contribution to GDP growth.

The weakness in construction provided a negative contribution of 0.3 percentage points to GDP, following a negative contribution of 0.4 per cent in the first quarter, the largest negative contribution from a sector in both quarters.

The fall in output continues to show disparity with the resilient labour market. The employment rate of 71.0 per cent is the highest rate since March to May 2009. The rise in employment was also accompanied by a rise of 0.5 per cent in total hours. That said, average hours fell by 0.2 per cent suggesting that although there was increased employment, people reduced their hours.

The strength in the labour market during the second quarter is a continuation of the resilience seen in the first quarter. In the first quarter, 357,000 workforce jobs were created across all sectors. However, electricity, gas, steam & air conditioning supply, agriculture, forestry & fishing, public admin & defence and other service activities recorded falls in workforce jobs. In addition, the contraction in construction output of 4.9% in the first quarter led to a corresponding fall of 10,000 construction jobs.

The situation in which falling output is accompanied by a resilient labour market is discussed in the dedicated ONS article, The Productivity Conundrum, Interpreting the Recent Behaviour of the Economy.

Source: Office for National Statistics

Background notes

  1. Sources:

    Gross Domestic Product index (YBEZ): chained volume measures, seasonally adjusted, Office for National Statistics. Gross Domestic Product quarter on quarter previous year growth (IHYR): chained volume measures, seasonally adjusted, Office for National Statistics. Gross Domestic Product quarter on previous quarter growth (IHYQ): chained volume measures, seasonally adjusted, Office for National Statistics. 

    Employment level (MGRZ): Labour Force Survey, all aged 16 and over, seasonally adjusted, Office for National Statistics. Employment rate (LF24): Labour Force Survey, all aged 16 to 64, seasonally adjusted, Office for National Statistics. Total weekly hours (YBUS): Labour Force Survey, all aged 16 and over, seasonally adjusted, Office for National Statistics. Average actual weekly hours worked (YBUV): all workers, all aged 16 and over, seasonally adjusted, Office for National Statistics. Workforce jobs (DYDC): seasonally adjusted, Office for National Statistics.

  2. Notes:

    GDP estimate for quarter two from 'Gross Domestic Product: Second Estimate – Q2 2012' published on 24 August 2012.

    Most recent Labour Market estimates are available from the ‘Labour Market Statistical Bulletin’ published on 15 August 2012.

  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

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