With the ONS estimating that GDP was flat in June (compared to May), growth for the 2nd quarter of the year comes out at +0.6%. This is slightly down on the +0.7% recorded in the 1st period of the year but with growth having been minimal through 2022 and 2023, the annualised rate moves up to +0.9%.
The “no change” trend in the GDP data for June reflects a combination of factors both between and within the sectors. We have already noted the month-on-month rise in manufacturing output, a trend that was repeated for construction but this was balanced by a fall in output for the services sector as retail sales and health activity declined (the latter due to Junior Doctors strikes), being balanced by an increase in professional, scientific & technical activities.
However, monthly data can be volatile so, as above, we prefer to focus on the rolling 3-month trends especially when (as they do this time) these coincide with the calendar quarters. This shows a rather different picture with the overall growth of +0.6% compared to Q1-2024 coming as a result of growth in the service sector outweighing a fall in the manufacturing sector alongside a slight reduction for construction.
We look at the manufacturing sector in our separate article, so this note will briefly cover the other two major parts of the economy. The marginal reduction in output for the construction sector – a fall of -0.1% between Q1 and Q2 – is a balance between a decline of -0.5% for new work against an increase of +0.4% for repair & maintenance activity.
Output of the service sector had quarter-on-quarter growth of +0.8%, the same pace as was recorded in the 1st quarter, with 11 of the 14 sub-sectors seeing an increase in activity. However, this was concentrated in non-consumer facing services (business facing services) which grew by +1.0% while consumer-facing services fell by -0.1%. The two largest positive contributions came from the “professional, scientific & technical activities” subsector (led by “scientific research & development”, “legal activities” and “architectural & engineering activities”) and “information & communication” (where “computer programming”, “consultancy & related activities” and “telecommunications” were particularly strong). This was partially balanced by declines in “buying & selling, renting & operating of own or leased real estate” and a fall in “wholesale & retail trade; repair of motor vehicles & motorcycles”.
There are more details in the range of ONS Statistical Bulletins which can be downloaded from their website at https://www.ons.gov.uk/releasecalendar (15 August) or on request from MTA.