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THE UK ECONOMY GROWS!


As this blog has been pointing out over the last few days, the UK economy seems to be in better shape than many had predicted.

According to the Office for National Statistics, Gross Domestic Product (GDP) increased 0.8 per cent in the third quarter of 2010, compared with an increase of 1.2 per cent in the previous quarter.

Whilst some (notably the BBC) have tried to spin this as decrease, the ONS rightly point out that allowing for the recovery in Q2 following the bad weather at the start of the year, the underlying growth in Q3 is broadly similar to that in Q2.

More importantly, it would seem that growth is taking place across the entire economy.

For example, services output rose 0.6 per cent in the third quarter, compared with a rise of 0.6 per cent in the previous quarter.  Total production output rose 0.6 per cent in the third quarter of 2010, compared with an increase of 1.0 per cent in the second quarter. Finally, construction output rose 4.0 per cent in the third quarter of 2010, compared with an increase of 9.5 per cent in the previous quarter.

The question, of course, is whether this growth will continue?

As pointed out on Monday, the private sector is currently sitting on around £65 billion of cash (with a similar amount due to be generated this year) and that, hopefully, will be reinvested back in the economy over the next twelve months, especially in privately funded construction projects.

The relative weakness of the pound at the moment also means that manufacturers, as well as internationally traded services companies, can take advantage of exporting opportunities and this will continue into next year as the rest of the global economy recovers.

Most importantly, the real situation contrasts starkly with those in the media and politics who have been trying to talk the UK economy into another recession.

Thankfully, such doomsayers have been proved wrong this time and one can only hope that confidence now returns to both business and consumers over the next few months and so helps to bolster the economy further,

Comments

Professor Dylan Jones-Evans said…
More evidence from the Wall Street Journal of construction activity by the private sector with "recent announcements by British Land PLC and Land Securities PLC that they are moving forward with major development projects that have been on hold since 2008, when the financial crisis hit and London's future as a financial center seemed uncertain.

"British Land on Monday announced that it would begin construction of a 610,000-square-foot office tower at 122 Leadenhall St., dubbed the "Cheese Grater" because of its tapered design. Last week, Land Securities said it would begin construction on its building, called the "Walkie Talkie," a 690,000-square-foot tower at 20 Fenchurch St. costing about £500 million ($787 million).


Land Securities also announced that is to "take forward other projects within our substantial development pipeline in London so that we offer a range of building types and sizes in a range of locations across the capital".

Has the dependency on the public sector for construction contracts been overplayed?
October 27, 2010 7:59 am
Anonymous said…
The credit must surely go to Labour. After-all, the Tories have only been in 5 months.
October 27, 2010 10:45 am
Anonymous said…
Welsh Ramblings in denial again and talking the Welsh economy down.
October 27, 2010 6:24 pm
ANON said…
Apparently, we have to use other indicators to assess the Welsh Economy. How about these?


TREDEGAR
JOB SEEKERS: 281
JOBS ADVERTISED: 16
RATIO: 17.5:1

MERTHYR
JOB SEEKERS: 2,058
JOBS ADVERTISED: 27
RATIO: 76:1

PONTYPRIDD
JOB SEEKERS: 1,815,
JOBS ADVERTISED: 87
RATIO: 21:1

CARDIFF
JOB SEEKERS: 15,000
JOBS ADVERTISED: 1,700
RATIO: 9:1


How's the Broadband coming along?
October 27, 2010 7:44 pm
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