GDP increased by 0.3% in the first quarter of 2013. The largest contribution to the increase came from the services sector, which increased by 0.6% in the first quarter of 2013. This followed a flat Q4 2012 figure, which was affected by increased output in Q3 2012 due to the Olympic and Paralympic games. In the latest quarter there was widespread growth, with increases in most service sector industries.
There was an upwards contribution from the production sector, which grew by 0.2%. These increases were partially offset by a downwards contribution from the construction sector, which fell by 2.5%.
Coming out of the recession in 2008-09, the rate of GDP growth has been slower compared with the early-2000s, owing to weaknesses in the domestic and global markets. Services have continued to grow steadily from 2009, and ended 2012 above pre-recession levels seen at the start of 2008. Production began to decrease from the start of 2011 following a mild recovery in 2010, as increased inflation and slower wage growth began to reduce households’ real income. Compounding this subdued demand was the development of the euro area sovereign debt crisis, which affected business sentiment in the EU, a key export market for the UK. Construction activity saw a more marked increase than that of production in 2010. However, this was not sustained with activity falling from the final quarter of 2011 due to a deteriorating economic outlook. Construction returned to growth in the final quarter of 2012, following five quarters of negative growth. This was short-lived, however, and construction has returned to negative growth again in Quarter 1 2013.
Source: Office for National Statistics
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