UK economic growth has slowed down, ONS data suggests
According to official data released on Friday, UK economic growth likely slowed down in the first quarter of the year, which could make it harder for David Cameron to convince voters that his party has what it takes to run the economy.
Industrial output rebounded last month, rising 0.4% after dropping 0.6% in January. But the broader measure of overall industrial production – which includes output from energy companies – only gained 0.1 per cent.
Factory output in the first quarter is 0.2% lower than the fourth quarter of 2014 and industrial production is down 0.1%.
Construction figures disappoint
Construction figures were much more disappointing though. The report showed that construction output dropped by 0.9 percent in February – far worse than what analysts had expected of 2 percent growth.
Comparing December 2014 to February 2015, with the previous 3 months, September to November 2014, construction output fell by 3.2%.
According to the ONS “Statistical bulletin: Output in the Construction Industry”,
“On a monthly basis, construction output fell by 0.9%. Output from both major categories: new work, and repair and maintenance was lower in February 2015. The contraction in new work was driven by private housing, the output from which fell by 1.6% and this weakness was reflected by a range of external surveys.
“The Agents’ Summary of Business Conditions for March noted that major house builders expected to raise output at a slightly slower rate in 2015 than in 2014. The report also suggested that demand and supply in the housing market are now more balanced and this may also be reflected in the easing of mortgage demand and house price growth.”
Expect the GDP figures to be released only days before the UK election
GDP figures are set to be released nine days before the general election on May 7.
Simon Wells, an economist with HSBC, told Reuters that it “is too early to be pessimistic”
“Still, the early signs are not good. January was poor across the board and today’s data show a weak February for one fifth of the economy,”