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Statistical bulletin: Second Estimate of GDP, Q3 2011 This product is designated as National Statistics

The headline figures are:

  • UK gross domestic product (GDP) in volume terms increased by 0.5 per cent in the third quarter of 2011.
  • Output of the production industries rose by 0.4 per cent, within which manufacturing rose by 0.2 per cent.
  • Output of the service industries increased by 0.6 per cent, while output of the construction industries decreased by 0.2 per cent.
  • Household final consumption expenditure was unchanged in volume terms in the latest quarter.
  • In current price terms, compensation of employees increased by 1.2 per cent in 2011 quarter three.

Summary

This bulletin contains information on the second estimate of GDP for 2011 quarter three. It includes information on the expenditure and income approaches to GDP for the first time, along with revisions to and more detail on the output approach.

Key Data Q3 2011

Key data Q3 2011

Seasonally adjusted
  At current market prices At chain volume measures  Gross fixed capital formation
Gross domestic product Compensation of employees Gross domestic product Household expenditure
2010 Q1 1.5 1.2 0.2 0.0   4.3
2010 Q2 1.5 0.2 1.1  0.6  -2.1
2010 Q3 1.1 -0.1 0.6 -0.2   1.1
2010 Q4 0.4    -0.2 -0.5 -0.1  -0.5
2011 Q1  0.9   0.8 0.4 -0.6  -2.8
2011 Q2   0.5    0.4 0.1 -0.8   1.7
2011 Q3   1.5 1.2 0.5  0.0  -0.2

Table source: Office for National Statistics

Table notes:

  1. Percentage change on previous quarter: seasonally adjusted

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GDP analysed by output categories, chained volume measures - Tables B1 and B2

Output indices, CVM

Presents output indices CVM, GDP Q3 2011
Source: Office for National Statistics

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See Annex A (3.06 Mb Excel sheet) for growth rates back to 2010 Q1.

The output of the agriculture, forestry & fishing sector increased by 0.4 per cent in the third quarter of 2011 compared with a decrease of 0.9 per cent in the second quarter of 2011.

The output of the production industries rose by 0.4 per cent in the third quarter of 2011. This compares with a fall of 1.2 per cent in the second quarter of 2011.

Mining & quarrying output increased by 0.4 per cent in the latest quarter. This compares with a fall of 6.6 per cent in the previous quarter.

Manufacturing output rose by 0.2 per cent in the latest quarter, the same as in the previous quarter.

Manufacturing growth, quarter on quarter growth, CVM

Presents manufacturing growth CVM, GDP Q3 2011
Source: Office for National Statistics

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Electricity, gas, steam & air conditioning supply increased by 2.4 per cent in 2011 quarter three compared with a 1.7 per cent fall in 2011 quarter two.

Sewerage & waste management decreased by 1.2 per cent in the third quarter of 2011 compared with a decrease of 2.7 per cent in the second quarter of 2011.

Construction output is estimated to have decreased by 0.2 per cent in 2011 quarter three. This compares with an increase of 1.1 per cent in 2011 quarter two.

Services output increased by 0.6 per cent in the third quarter of 2011 compared with an increase of 0.2 per cent in the second quarter of 2011.

Services, quarter on quarter growth, CVM

Presents services growth, GDP Q3 2011
Source: Office for National Statistics

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Output of the distribution, hotels & restaurants sector was unchanged in 2011 quarter three, compared with a rise of 0.4 per cent in 2011 quarter two. Strength in hotels and restaurants was offset by a decline in distribution.

Output of the transport, storage & communication sector rose 0.7 per cent in quarter three, compared with flat growth in quarter two. The increase was driven by growth in information and communication.

The business services & finance sector rose by 1.0 per cent in quarter three, compared with an increase of 0.3 per cent in quarter two. The main drivers behind the growth in quarter three were professional, scientific & technical activites, and administrative & support service activities.

Government & other services output rose 0.5 per cent in 2011 quarter three, compared with an increase of 0.2 per cent in quarter two. The main drivers behind the growth in quarter three were, human health & social work activities and education.

GDP analysed by expenditure categories, chained volume measures - Table C2

See Annex B (30.5 Kb Excel sheet) for growth rates back to 2010 Q1.

Gross domestic expenditure increased by 0.9 per cent in the third quarter of 2011.

Household final consumption expenditure was unchanged in 2011 quarter three, compared with a fall of 0.8 per cent in 2011 quarter two. The level of household expenditure is now 1.5 per cent lower than in 2010 quarter three.

 

Household final expenditure, quarter on quarter growth, CVM

Presents household final expenditure, GDP Q3 2011
Source: Office for National Statistics

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Government final consumption expenditure increased by 0.9 per cent in 2011 quarter three, compared with an increase of 1.1 per cent in 2011 quarter two.

Gross fixed capital formation fell by 0.2 per cent in the latest quarter, compared with a rise of 1.7 per cent in the previous quarter.

Gross fixed capital formation, quarter on quarter growth, CVM

Presents gross fixed capital formation, CVM, GDP Q3 2011
Source: Office for National Statistics

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Including the alignment adjustment, the level of inventories increased by £2.9 billion in the latest quarter.

The deficit in net trade was £5.5 billion in 2011 quarter three, compared with a deficit in net trade of £4.1 billion in 2011 quarter two.

 

Net trade , quarter on quarter growth, CVM

Presents net trade CVM, GDP Q3 2011
Source: Office for National Statistics

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GDP implied deflator

See Annex D (3.05 Mb Excel sheet) for growth rates back to 2010 Q1.

The gross domestic product implied deflator at market prices for 2011 quarter three is 2.8 per cent above the same quarter of 2010.

  

GDP Implied Deflator, quarter on quarter of previous year, CVM

Presents implied deflator, CVM, GDP Q3 2011
Source: Office for National Statistics

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GDP analysed by income categories at current prices - Table D

See Annex C (3.05 Mb Excel sheet) for growth rates back to 2010 Q1.

GDP at current market prices rose by 1.5 per cent in 2011 quarter three, compared with an increase of 0.5 per cent in 2011 quarter two.

Compensation of employees increased by 1.2 per cent in 2011 quarter three, compared with an increase of 0.4 per cent in 2011 quarter two.

Compensation of employees, quarter on quarter growth, current prices

Presents compensation of employees,  current prices, GDP Q3 2011
Source: Office for National Statistics

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Gross operating surplus of corporations fell by 0.2 per cent in 2011 quarter three. 

Gross operating surplus of corporations, quarter on quarter growth, current prices

Presents operating surplus of corporations, GDP Q3 2011
Source: Office for National Statistics

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Taxes on production less subsidies increased by 3.2 per cent in 2011 quarter three.

Economic background

The data for this release of the third quarter show a somewhat mixed picture of the economy. The headline growth rate of 0.5 per cent is reasonably solid given the previous three quarters' growths and the turmoil in markets relating to the sovereign debt crisis in the euro area, which could affect the real economy through reduced confidence, risk aversion and borrowing channels. However, growth over the last four quarters has been 0.5 per cent, and has averaged 0.3 per cent over the last two quarters. In addition, the three approaches to GDP indicate that growth has tended to be concentrated in just a few components and so appears rather polarised.

The expenditure approach suggests that underlying growth is weak, with household consumption, investment (gross fixed capital formation) and trade contributing -0.4 percentage points. In broad terms, households continue to face difficult financial conditions, not least because inflation is over twice the rate of earnings growth. This, together with an uncertain labour market, is continuing to weigh down on household confidence. There is some evidence that households are taking steps to improve their balance sheets, by reducing debt and increasing savings.

In recent quarters, data in the national accounts and some anecdotal evidence suggested that the corporate sector was holding up reasonably well, despite the difficult economic difficult economic conditions. However, in this latest quarter, there are signs that the corporate sector is now beginning to weaken slightly, with corporations' gross operating surplus and gross fixed capital formation both declining. Within the output approach, however, professional services and other business services showed considerable strength in the third quarter.

Revisions

GDP and components (previously published on 1 November 2011)

GDP growth for 2011 quarter three is unrevised from the increase of 0.5 per cent published on 1 November.

Growth in the volume of output in the production industries in 2011 quarter three has been revised down by 0.1 percentage points from the previous estimate.

Growth in the volume of output in the service industries in 2011 quarter three has been revised down by 0.1 percentage points from the previous estimate.

Growth in construction output in 2011 quarter three has been revised up by 0.4 percentage points.

There were no revisions to earlier quarters.

  

Gross domestic product, quarter on quarter growth, CVM

Presents gross domestic product, CVM, GDP Q3 2011
Source: Office for National Statistics

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Background notes

  1. This release includes data available up to 17 November 2011. Data are consistent with the Index of Production statistical bulletin published 8 November 2011 and the Trade in Goods data within the UK Trade Statistical Bulletin published 9 November 2011.

  2. A full set of quarterly national accounts for the third quarter of 2011 will be published 22 December 2011. A preliminary estimate of GDP for the fourth quarter of 2011 will be published 25 January 2011.

  3. An article titled Treatment of the sale of Olympic tickets (19.1 Kb Pdf)  is available on the ONS website.

  4. A Summary Quality Report for this Statistical Bulletin (197.4 Kb Pdf)  is also available on the website.

  5. 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.

  6. 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 (244.6 Kb Pdf) .

    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 realiability 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.

  7. 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 November 2006 (2006q3) to August 2011 (2011q2). The analysis of revisions between month 2 and month 3 uses month 3 estimates published from December 2006 (2006q3) to September 2011 (2011 q2).

    Table 1: Revisions to early estimates of GDP growth

    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 0.5 0.01  0.05
    Between M2 and M3     0.5   -0.04    0.08

    Table source: Office for National Statistics

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    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 December 2003 (2003q3) to September 2008 (2008q3) for GDP.

    Table 2: Revisions to month 3 estimates of GDP growth

        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) 0.5 -0.07 0.23

    Table source: Office for National Statistics

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    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 ONS website.

    Revisions' triangles for the main components of GDP from expenditure, ouput and income approaches are also available. 

    An article titled Understanding the quality of early estimates of Gross Domestic Product, was first published in December 2009.

  8. 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.

  9. Latest copies of this and other ONS releases are available under Press Releases on the ONS website.

    More information underlying the National Accounts (124.6 Kb Pdf) .

  10. 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 of those given pre-publication access to the contents of this bulletin and can be found in the  Pre-release access list (51.9 Kb Pdf) .

  11. You can follow ONS on Twitter and Facebook.

  12. 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 2011   

    Next publication:  22 December 2011

    Issued by: Office for National Statistics, Government Buildings, Cardiff Road, Newport NP10 8XG

    Media contact:
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    Email: media relations@ons.gsi.gov.uk 

  13. Index to tables

    Gross domestic product tables

    National accounts aggregates (index numbers) .............................................. A1

    National accounts aggregates ............................................................................. A2

    Gross value added chained volume measures at basic prices, by category of output ................................................................................................................... B1

    Gross value added chained volume measures at basic prices, by category of output: service industries ................................................................................. B2

    Gross domestic product: expenditure
    Current market prices ...................................................................................... C1

    Gross domestic product: expenditure
    Chained volume measures ............................................................................. C2

    Gross domestic product: by category of income
    Current market prices ............................................................................................. D

    Changes in inventories
    Chained volume measures ...................................................................................... E

  14. 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

    These National Statistics are produced to high professional standards and released according to the arrangements approved by the UK Statistics Authority.

Statistical contacts

Name Phone Department Email
Pete Lee +44 (0)1633 456713 National Accounts Coordination gdp@ons.gsi.gov.uk
Get all the tables for this publication in the data section of this publication .
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