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GDP and the Labour Market, 2013 Q1, April GDP Update

Released: 25 April 2013 Download PDF

Index of output, employment and hours since 2008, seasonally adjusted

Index of output, employment and hours since 2008, seasonally adjusted

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In the first quarter of 2013 the UK economy grew by 0.3%, following a contraction of 0.3% in the final quarter of 2012. Despite this growth, GDP still remains 2.6% below its pre-recession peak in the first quarter of 2008, the quarter before the start of the 2008/2009 recession.

The service sector was the main source of growth in the first quarter; growing by 0.6% and contributing almost 0.5 percentage points to GDP. This was partly offset by construction which contracted by 2.5% and had a negative contribution of 0.2 percentage points to overall GDP growth. Production made only slight contribution of 0.03 percentage points, growing by 0.2% in the first quarter 2013.

When, looking at the longer term trend, GDP growth has remained fairly flat since the third quarter of 2011, increasing by 0.4%. However, in this period, GDP quarterly growth has been volatile in part due to a number of special events such as the London 2012 Olympic and Paralympic games in the third quarter of 2012 and the Diamond Jubilee bank holiday in June 2012.

The latest labour market statistics cover the three months to February and therefore do not cover the whole of the first quarter of 2013.


The employment rate fell by 0.1 percentage points to 71.4% between the September to November 2012 and December 2012 to February 2013 periods. The unemployment rate increased by 0.2 percentage points to 7.9% over the same period. The increase in the unemployment rate can party be attributed to previously inactive people joining the workforce, making themselves available for work. The number of people aged 16 to 64 who were not in the labour force (also known as economically inactive) fell by 57,000 to reach 8.95 million in the three months to February, the lowest level since early 2006.

Change in economic inactivity by reason (aged 16 to 64) for December 2012 to February 2013, seasonally adjusted

Change in economic inactivity by reason (aged 16 to 64) for December 2012 to February 2013, seasonally adjusted
Source: Labour Force Survey - Office for National Statistics

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A breakdown of the reason for people being economically inactive shows that the key contributors to the fall between the two latest 3-month periods were a 64,000 fall in the number of people looking after family/home and a 43,000 decrease in those that classify themselves as retired. The retired category only contains those aged under 65 and therefore the raising of the state pension age for females may have had a large downward effect on this series. These decreases were partially offset by growth in the number of students and in the other category, increasing by 21,000 and 46,000 people respectively.

Source: Office for National Statistics

Background notes

  1. Sources

    GDP: chained volume measures, seasonally adjusted, Office for National Statistics (ABMI)

    Employment level: All aged 16 and over, seasonally adjusted, Labour Force Survey, Office for National Statistics (MGRZ)

    Unemployment level: All aged 16 and over, seasonally adjusted, Labour Force Survey, Office for National Statistics (MGSC)

    Economic inactivity total: All aged 16 to 64, seasonally adjusted, Labour Force Survey, Office for National Statistics (LF2M)

  2. Notes

    GDP data is from the "Gross Domestic Product: Preliminary Estimate - Q1 2013" published on the 25 April  2013.

    Labour Market data is from the "Labour Market Statistics - April 2013" published on the 17 April  2013.

  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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