Good news is we are growing, but slowly.

 The preliminary estimate shows that the chained volume measure of gross domestic product (GDP) increased by 0.2 per cent in the second quarter of 2008 compared with the previous quarter.

The report released by UK Statistics places a great degree of the blame for the sluggish growth in the second quarter on the construction industry.

Last week DOF Online highlighted the dismal performance of construction by publishing a report by Equifax showing construction experiencing “staggering” failures of up to 20.3% compared with the same period last year.

Also performing badly are the production industries who have experienced decreases of 0.5% in the volume of output in this quarter.

Manufacturing output decreased by 0.4 per cent. Mining and quarrying decreased by 0.9 per cent and Electricity, gas and water supply decreased by 1.5 per cent. Output of the service industries is estimated to have increased by 0.4 per cent.

Construction

Output within construction decreased by 0.7 per cent compared with an increase of 0.4 per cent in the previous quarter.  The overall deceleration in GDP was driven by construction, which is due primarily to a particularly large fall in new housing construction.

It should be noted that the output survey results used to compile more complete estimates are not available at this stage and the preliminary results are based on a smaller survey of changes in the balance of activity
in the sector.

Transport, storage and communication – holding economy up

 Output within transport, storage and communication increased by 2.2 per cent compared with an increase of 0.7 per cent in the previous quarter. Post and telecommunications made the largest contribution to both the overall growth and acceleration.

Business services and finance

Output of business services and finance increased by 0.1 per cent, compared with an increase of 0.2 per cent in the previous quarter. Activities auxiliary to financial
intermediation drove the deceleration, which was partly offset by increased growth in computer services and other business services.
 
Government and other services
As expected this sector will remain resilient in the face of the downturn. Output growth of government and other services increased by 0.4 per cent, the same rate of growth as in the previous quarter. Deceleration occurred in recreation services with offsetting acceleration in a number of other industries.

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