Commenting on today’s GDP figures for the three months to October, Head of National Accounts Rob Kent-Smith said:
“GDP growth slowed going into the autumn after a strong summer, with a softening in services sector growth mainly due to a fall in car sales. This was offset by a strong showing from IT and accountancy.
“Manufacturing saw no growth at all in the latest three months, mainly due to a decline in the often-erratic pharmaceutical industry. Construction, while slowing slightly, continued its recent solid performance with growth in housebuilding and infrastructure.”
In today’s headline figures, the three months of August, September and October 2018 (the current period) are being compared with the months of May, June and July 2018 (the base period). While the three most recent monthly growths were broadly flat, the lower level in the base period gives a comparatively strong rolling three-month growth rate. This can be seen in Figure 2, where the levels for the current period are higher than the levels for the base period.Back to table of contents
Rolling three-month growth in the services sector was 0.3% in October 2018, contributing 0.23 percentage points to GDP growth. The production and construction sectors also had positive contributions, with rolling three-month growths of 0.3% and 1.2%, respectively.Back to table of contents
Rolling three-month growth slowed to 0.4% in October 2018, following the strong growth seen in the summer months.
Rolling three-month growth is based on output gross value added (GVA) and therefore there will be discrepancies in the time series with our quarterly estimates of gross domestic product (GDP), which include information on the expenditure and income approaches to measuring GDP.Back to table of contents
|Index of Services||0.0%||-0.1%||0.2%|
|Index of Production||0.0%||0.0%||-0.6%|
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Monthly growth rose to 0.1% in October 2018, following flat growth in August and September 2018.
The monthly growth rate for gross domestic product (GDP) is volatile and therefore it should be used with caution and alongside other measures such as the three-month growth rate when looking for an indicator of the longer-term trend of the economy. However, it is useful in highlighting one-off changes that can be masked by three-month growth rates.Back to table of contents
Rolling three-month growth in the services sector was 0.3%. This was driven by information and communication, with a growth of 1.7%, and professional activities, which grew by 1.3%. Within these industries, accounting and computer programming were the main drivers to rolling three-month gross domestic product (GDP) growth. Accounting contributed 0.08 percentage points to headline GDP growth, while computer programming contributed 0.07 percentage points.
As Figure 5 shows, the wholesale and retail trade sector’s contribution to headline GDP was boosted over the summer months. This declined in September 2018 and became a negative contribution in October 2018, as October rolling three-month growth was negative 0.2%. This sector tends to be more influenced by external factors such as the weather. However, the information and communication industry and professional activities industry generally tend to have a large contribution to headline GDP.Back to table of contents
Rolling three-month growth in the production industries was 0.3%, while in manufacturing industries growth was flat. Production growth was driven by broad-based increases within the sector. However, monthly growth in manufacturing was negative 0.9%, driven by manufacture of transport equipment, which had monthly growth of negative 3.2%.
When looking at the long-term perspective, as seen in Figure 6, manufacture of transport equipment has seen a steady decline in growth. Three-months on a year ago growth for manufacture of transport equipment was negative 0.9%, the lowest growth rate since November 2009.Back to table of contents
Rolling three-month growth in the construction industry was 1.2% in October 2018. After peaking in July 2018, growth has slowed down slightly to levels seen before the atypical weather in the first half of 2018.Back to table of contents
The Gross domestic product (GDP) Quality and Methodology Information report contains important information on:
the strengths and limitations of the data and how it compares with related data
uses and users of the data
how the output was created
the quality of the output including the accuracy of the data
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