A typing error was discovered in the commentary within the Second Estimate of Gross Domestic Product, 1st quarter 2012 statistical bulletin, originally published at 9.30am on 24 May 2012. On page 7 of the statistical bulletin the text affected is the sentence 'Including the alignment adjustment, the level of inventories increased by £1.2 billion in the latest quarter', this statement should have been 'decreased'.
All associated text, growth rates and publication tables were correct at the time of publishing, and the error has now been corrected. ONS apologises for any inconvenience caused.
This bulletin contains information on the second estimate of GDP for 2012 quarter one. It includes initial estimates of the expenditure and income approaches to GDP, along with revisions to and more detail on the output approach.
|Current Market Prices||Chained volume measures||Gross fixed capital formation|
|Gross domestic product||Compensation of employees||Gross domestic product||Household expenditure|
Annex A (37 Kb Excel sheet) present growth rates back to 2011 Q1.
The output of the agriculture, forestry & fishing industry decreased by 1.9 per cent in the first quarter of 2012 compared with a decrease of 1.5 per cent in the fourth quarter of 2011.
The output of the production industries fell by 0.4 per cent in the first quarter of 2012. In the fourth quarter of 2011 output of the production industries fell by 1.3 per cent.
Mining & quarrying output decreased by 3.7 per cent in the first quarter of 2012. This compares with a decrease of 2.6 per cent in the previous quarter.
Manufacturing output was flat in the first quarter of 2012. This compares with a decrease of 0.7 per cent in the previous quarter.
Electricity, gas, steam & air conditioning supply increased by 0.9 per cent in 2012 quarter one compared with a decrease of 5.3 per cent in 2011 quarter four.
Water supply, sewerage & waste management increased by 0.5 per cent in the first quarter of 2012 compared with an increase of 1.4 per cent in the fourth quarter of 2011.
Gross value added excluding oil and gas extraction decreased by 0.3 per cent in the first quarter of 2012 following the same decrease of 0.3 per cent in the fourth quarter of 2011.
Construction output decreased by 4.8 per cent in 2012 quarter one. This compares with a decrease of 0.2 per cent in 2011 quarter four.
Services output increased by 0.1 per cent in the first quarter of 2012 compared with a decrease of 0.1 per cent in the fourth quarter of 2011.
Output of the distribution, hotels & restaurants industries rose by 0.5 per cent in 2012 quarter one compared with a decrease of 0.4 per cent in 2011 quarter four. This was driven by strength in both wholesale, retail & repair of motor vehicles and retail trade except of motor vehicles.
Output of the transport, storage & communication industries rose by 0.7 per cent in 2012 quarter one, compared with a decrease of 0.5 per cent in 2011 quarter four. This increase was mainly driven by computer programming, consultancy & related activites.
Output of the business services & finance industries fell by 0.3 per cent in 2012 quarter one, compared with a decrease of 0.1 per cent in 2011 quarter four. The main drivers behind the fall in 2012 quarter one were financial services; other professional, scientific & technical activites and accounting, book-keeping & auditing.
Output of government & other services rose by 0.2 per cent in 2012 quarter one, following an increase of 0.4 per cent in 2011 quarter four. The main driver behind the growth in 2012 quarter one was an increase in human health activities.
Annex B (30 Kb Excel sheet) present growth rates back to 2011 Q1.
Gross domestic expenditure decreased by 0.2 per cent in the first quarter of 2012 compared with a decrease of 0.5 per cent in 2011 quarter four.
Household final consumption expenditure increased by 0.1 per cent in 2012 quarter one, compared with an increase of 0.4 per cent in 2011 quarter four. The level of household expenditure is now 0.1 per cent lower than in 2011 quarter one.
Government final consumption expenditure increased by 1.6 per cent in 2012 quarter one, compared with an increase of 0.5 per cent in 2011 quarter four.
Gross fixed capital formation fell by 0.3 per cent in the latest quarter, compared with a decrease of 0.6 per cent in the previous quarter.
Including the alignment adjustment, the level of inventories decreased by £1.2 billion in the latest quarter.
The deficit in net trade was £4.4 billion in 2012 quarter one, compared with a deficit in net trade of £4.0 billion in 2011 quarter four.
Annex D (33.5 Kb Excel sheet) present growth rates back to 2011 Q1.
The gross domestic product implied deflator at market prices for 2012 quarter one is 2.0 per cent above the same quarter of 2011.
Annex C (27.5 Kb Excel sheet) present growth rates back to 2011 Q1.
GDP at current market prices rose by 0.1 per cent in 2012 quarter one, compared with an increase of 0.6 per cent in 2011 quarter four.
Compensation of employees was unchanged in 2012 quarter one, compared with an increase of 0.9 per cent in 2011 quarter four.
The gross operating surplus of corporations, including the alignment adjustment, rose by 0.8 per cent in 2012 quarter one, compared with a fall of 1.3 per cent in 2011 quarter four.
Taxes on products and production less subsidies decreased by 0.7 per cent in 2012 quarter one compared with an increase of 0.6 per cent in 2011 quarter four.
Over the past eighteen months, the economy has experienced a mild contraction in output. This reflects global economic headwinds as well as domestic economic conditions such as the impact of continuing high rates of inflation in the UK. This is mirrored in the labour market where employment has been fairly static.
The weakness in output has been concentrated in the production and construction industries, while the services industries have contributed positively to growth in the latest quarter. Output in the production industries is driven by continuing weakness in oil and gas output. Excluding the oil and gas sector, gross value added has contracted by 0.3 per cent in line with the economy as a whole.
In terms of expenditure, growth has depended primarily on net trade, with some expansion in exports while imports have held fairly steady. The Euro Area's financial difficulties have held back exports to the EU, but exports to the rest of the world have shown some strength. Household final consumption expenditure has fallen a little in real terms over the past eighteen months and there has been a sharp running down of inventory levels, while gross fixed capital formation has been broadly flat.
Four quarter growth in the GDP deflator, which is an indicator of domestic price pressures, has fallen from 2.4 percent in 2011 quarter one to 2.0 per cent in 2012 quarter one, corresponding with an easing in headline consumer price inflation. The GDP deflator excludes the direct impact of the rising prices of oil and other imported commodities and is therefore lower than the CPI measure of inflation.
GDP growth for 2012 quarter one is revised down by 0.1 percentage points from the fall of 0.2 per cent published on 25 April 2012.
Growth in the volume of the output in the production industries in 2012 quarter one was unrevised at minus 0.4 per cent.
Growth in the volume of output in the service industries in 2012 quarter one was unrevised at 0.1 per cent.
Growth in construction output in 2012 quarter one was revised down by 1.8 percentage points from the fall of 3.0 per cent published on 25 April 2012.
There were no revisions to earlier quarters.
This release includes data available up to 17 May 2012. Data are consistent with the Index of Production statistical bulletin published 10 May 2012 and the Trade in Goods data within the UK Trade Statistical Bulletin published 15 May 2012.
A full set of quarterly national accounts for the first quarter of 2012 will be published on 28 June 2012. A preliminary estimate of GDP for the second quarter of 2012 will be published on 25 July 2012.
The Quarterly National accounts to be published on 28 June 2012 will be consistent with ONS's annual Blue Book publication. Blue Book 2012 will be published on 31 July 2012. An article describing the content of Blue Book 2012 is available on the ONS website.
Changes to bank holidays in May and June 2012
As part of the celebrations for the Queen's Diamond Jubilee there are changes to bank holidays in May and June 2012. The late May bank holiday moves into June, and there is an additional day's holiday. The change to the holidays will count as a statistical special event in line with ONS's policy on Special Events. The event is not regular, so there will not be an adjustment to account for it as part of the seasonal adjustment process. Users are therefore likely to see an effect related to an additional working day in May and two fewer working days in June in the seasonally adjusted series. ONS will include commentary with releases as usual, including commentary specifically to help users with the interpretation of statistics in these two months. Nevertheless, caution should be taken when interpreting the movements in affected outputs involving May and June 2012, as the Jubilee Bank holidays create some additional uncertainty.
Treatment of Olympic ticket sales
An article titled Treatment of the Sale of Olympic Tickets (19.1 Kb Pdf) in the National Accounts is available on the National Statistics website.
Basic Quality Information for GDP Statistical Bulletin
A Summary Quality Report (197.4 Kb Pdf) for this Statistical Bulletin can be found on the National Statistics website.
Key quality issues
Common pitfalls in interpreting series: Expectations of accuracy and reliability in early estimates are often too high. Revisions are an inevitable consequence of the trade-off between timeliness and accuracy. Early estimates are based on incomplete data.
Very few statistical revisions arise as a result of 'errors' in the popular sense of the word. All estimates, by definition, are subject to statistical 'error' but in this context the word refers to the uncertainty inherent in any process or calculation that uses sampling, estimation or modelling. Most revisions reflect either the adoption of new statistical techniques or the incorporation of new information which allows the statistical error of previous estimates to be reduced. Only rarely are there avoidable 'errors' such as human or system failures and such mistakes are made quite clear when they do occur.
Estimates for the most recent quarters are provisional and are subject to revision in the light of updated source information. ONS currently provides an analysis of past revisions in the GDP and other Statistical Bulletins which present times series.
ONS has a webpage dedicated to revisions to economic statistics which brings together ONS work on revisions analysis, linking to articles, revisions' policies and key documentation from the Statistics Commission's report on revisions.
Revisions to data provide one indication of the reliability of key indicators. The tables below show summary information on the size and direction of the revisions which have been made to data covering a five-year period. A statistical test has been applied to the average revision to find out if it is statistically significantly different from zero. An asterisk (*) shows that the test is significant.
Revisions of GDP estimates
Table 1 below shows the revisions to month 1 and month 2 estimates of GDP. The analysis of revisions between month 1 and month 2 uses month 2 estimates published from May 2007 (2007q1) to February 2012 (2011q4). The analysis of revisions between month 2 and month 3 uses month 3 estimates published from June 2007 (2007q1) to March 2012 (2011 q4).
|Revisions to GDP growth||GDP Growth in the latest period (per cent)||Revisions between early estimates of GDP growth (quarterly, CVM)|
|Average over the last five years||Average over the last five years without regard to sign (average absolute revision)|
|Between M1 and M2||-0.3||0.01||0.05|
|Between M2 and M3||-0.3||-0.03||0.08|
Table 2 below shows the revisions to GDP growth between the estimate published three months after the end of the quarter and the equivalent estimate three years later. The analysis uses month 3 estimates first published from June 2004 (2004q1) to March 2009 (2008q4) for GDP.
|GDP growth in the latest period (per cent)||Revisions between first publication and estimates three years later|
|Average over the last five years||Average over the last five years without regard to sign (average absolute revision)|
|GDP growth (quarterly CVM)||-0.3||-0.20||0.31|
Spreadsheets giving revision triangles (real-time databases) of estimates from 1992 to date, and the calculations behind the averages in both tables are available on the National Statistics website.
Revisions triangles for the main components of GDP from expenditure, output and income approaches are also available.
An article titled 'Understanding the quality of early estimates of Gross Domestic Product' (122.9 Kb Pdf) , which was first published in December 2009, is available on the National Statistics website.
Historic experience shows that the output approach provides the best timely approach to measuring GDP growth. GDP growth according to the expenditure and income approaches is therefore brought into line with that recorded by output.
Latest copies of this and other ONS releases are available under Press Releases on the ONS website. ONS has also produced a short guide to the UK National Accounts (174.2 Kb Pdf) .
Policy governing release of new data
Details of the policy governing the release of new data are available from the media relations office. Also available is a list of the names (47.1 Kb Pdf) of those given pre-publication access to the contents of this bulletin.
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Code of practice
National Statistics are produced to high professional standards set out in the UK Statistics Authority's Code of Practice for Official Statistics. They undergo regular quality assurance reviews to ensure that they meet customer needs. They are produced free from any political interference. © Crown copyright 2012
Next publication: 28 June 2012
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