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MADRID (ICIS)–The UK’s GDP fell 0.2% in the
third quarter, compared with the second, as the
services sectors stalled and chemicals and
wider manufacturing sectors posted falls in
output, the Office for National Statistics
(ONS) said on Friday.
Moreover, the ONS’s monthly statistics for GDP
growth in September showed a contraction of
0.6%, although this could be in part due to the
bank holiday declared for the state funeral of
Queen Elizabeth II, a period during which some
businesses shut or reduced activity.
A negative GDP reading for the third quarter is
in line with the pessimistic assumptions by the
UK’s central bank, the Bank of England (BoE),
which earlier in the year
predicted a recession would start in Q4.
Two consecutive quarters of negative growth
constitutes a recession.
INDUSTRY BEARS BRUNT
High
energy and raw materials costs, as well as a
slowdown in consumer spending, hit the UK’s
manufacturing sectors hard in Q3.
“In output terms, there was a slowing on the
quarter for the services, production and
construction industries,” said the ONS.
With inflation at multi-decade highs and
consumers prioritising their spending, the key
services sectors – of which the UK’s is highly
dependent – posted flat output, but retail felt
the pinch of consumers’ wariness to spend on
non-basic items.
“The services sector slowed to flat output on
the quarter driven by a fall in consumer-facing
services, while the production sector
[manufacturing] fell by 1.5% in Q3, including
falls in all 13 sub-sectors of the
manufacturing sector,” added the ONS.
ALL DOWN
Chemicals was one of those sub-sectors hardest
hit, adding to the fall already
posted in the second quarter.
Output in the petrochemicals-intensive
construction sector, however, increased in the
third quarter by 0.6%, compared with the
second, although this represented a slowdown in
the pace of growth.
“The largest negative contribution [to overall
growth in manufacturing] came from the
manufactures of basic metals and metal
products, and manufactures of chemicals and
chemical products,” said the ONS.
“As reported in our GDP monthly estimate [for
August], there were mixed comments from
manufacturers, with some firms suggesting
shortages of supplies, while others reported
these challenges were easing.”
Source: ONS
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