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GDP and the Labour Market - Q2 2013 September GDP Update

Released: 26 September 2013 Download PDF

Index of output, employment and hours since Q1 2008, seasonally adjusted, 2008 Q1 = 100

Index of output, employment and hours since Q1 2008, seasonally adjusted, 2008 Q1 = 100
Source: Labour Force Survey - Office for National Statistics

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Gross domestic product (GDP) grew by 0.7% in Q2 2013, following growth of 0.4% in Q1 2013.

Growth in GDP was broadly based, with all three major industry groups – production industries, construction and services – seeing expansion in the quarter.  Growth remained steady in the services industries, growing by 0.6% in each of the first and second quarters of 2013.  Construction output grew by 1.9% in the second quarter, more than reversing the 1.3% fall in the previous period, while industrial production accelerated to grow by 0.8% in the latest quarter.  GDP remains 3.3% below its Q1 2008 pre-downturn peak.

The Quarterly National Accounts (QNA) expands upon previous estimates, incorporating additional information on all three measures of GDP. Further explanation of revisions to GDP estimates, including descriptions of the three separate measures of GDP, can be found in Explaining economic statistics.

Households’ final consumption expenditure increased for the seventh consecutive quarter, although growth was revised down slightly from 0.4% to 0.3%. Consequently the level of household expenditure is now 1.8% higher than it was in the second quarter of 2012.  There were also positive contributions to GDP growth from gross fixed capital formation and general government final consumption expenditure, which grew by 0.8% and 0.5% respectively in the latest quarter.

Compensation of employees (which includes wages and salaries plus social contributions made by employers) grew by 2.9% in the second quarter, the strongest quarterly increase since 1989, following growth of only 0.2% in the previous period.  The disparity of growth between the two quarters to some extent reflects the timing of bonus payments this year, as some bonuses were deferred in order to benefit from the reduction in the rate of income tax paid by high earners.  Further analysis of bonus payments can be found in the September 2013 ONS Economic Review.

The labour market has been more resilient than output throughout the economic downturn and subsequent recovery, with the level of employment and total weekly hours both above their pre-downturn peaks.  Growth in GDP in the second quarter was accompanied by further advances in the labour market, with the number of people over 16 and in employment reaching a record high of 29.8 million. This represents an increase of 69,000 in the quarter and 301,000 over the previous year.

The UK employment rate continued to rise, increasing by 0.1 percentage points to 71.5% of the population of working age. However because the population has continued to grow, this is still 1.5 percentage points lower than at the pre-downturn peak.

In April to June, the unemployment rate was unchanged at 7.8% for the fourth consecutive quarter, while total weekly hours increased for the eighth successive period to reach 953.1 million hours.

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)

    Total weekly hours (millions), seasonally adjusted, Labour Force Survey, Office for National Statistics (YBUS)

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

  2. Notes

    GDP data is from the "Quarterly National Accounts - Q2 2013" published on the 26 September 2013.

    Labour Market data is from the "Labour Market Statistics - August 2013" published on the 14 August 2013.

  3. Details of the policy governing the release of new data are available by visiting or from the Media Relations Office email:

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