Economy continues growth in Q4
THE UK economy continued to grow in the final quarter of 2013 – highlighting a near 2% rise over the course of the year, figures released today have shown.
Data released by the Office for National Statistics shows the Gross Domestic Product (GDP) increased by 0.7% in Q4 2013 compared with Q3.
The ONS said output increased in three of the four main industrial groupings within the economy in Q4 2013 compared with the previous quarter.
Output increased by 0.5% in agriculture, 0.7% in production and 0.8% in services. However, the construction sector continued to struggle – down 0.3% over the period.
In Q4 2013 GDP was estimated to be 1.3% below its pre-recession peak in Q1 2008. The ONS said from peak to trough in 2009, the economy shrank by 7.2%.
GDP was 2.8% higher in Q4 2013 compared with the same quarter a year ago. GDP is estimated to have increased by 1.9% in 2013, compared with 2012.
However, Joe Grice, chief economist at the ONS, warned the recovery remained fragile.
He said the growth had been quite slow and “somewhat erratic”, although conceded things were looking up, aided by a strengthening labour market.
Putting things further into perspective, the economy remains 11.9% lower than its pre-recession level with manufacturing and construction the worst affected sectors – down by a respective 8.2% and 11.2% since 2008.
Welcoming the news, Richard Halstead, Midlands region director at manufacturers’ organisation EEF, said: “GDP maintained a healthy pace of expansion with the ONS estimate of 0.7% growth coming a touch lower than expectations, mainly due to a small drop in construction.
“Taken together with upbeat business surveys the hiccough in the notoriously volatile construction figures should be a short-term interruption in what has been a trend of positive data across all major economic segments in the previous couple of quarters.
“Indeed Q4 manufacturing growth of 0.9% was bang in line with expectations and survey reports of a strong pick up in production and orders through the final months of last year.
“Looking to the year ahead, a decent demand outlook at home and steady growth in markets overseas should see industry maintain a robust pace of growth in 2014.”
Andy Street, chairman of the Greater Birmingham and Solihull LEP, said: “There is a feeling our businesses are fighting back and are gradually turning the corner.
“While we are always cautious about putting too much faith in statistics presented in isolation, the continuing downward trend in unemployment in Greater Birmingham is encouraging.
“If we look at this alongside Greater Birmingham’s success in attracting inward investment and our recent figures that show 19,000 new private sector jobs were created in 2011-12, we see plenty to provide us with cautious optimism.”
He said the LEP’s submission to the Local Growth Fund would hopefully provide the stimulus for longer-term job creation that would cement growth for the area.
Jane Gratton, deputy chief executive, Staffordshire Chambers of Commerce said: “These growth figures confirm what we’ve been hearing for some time. Businesses across Staffordshire are busier, they’re investing and creating jobs. Our local economic surveys now consistently show business confidence levels not seen for many years, particularly among our manufacturing and exporting firms.
“The GDP figures are encouraging as it means that the UK is now out-performing most European economies.
“The main challenge now is making sure growth in places like Staffordshire continues at a steady pace. We still need better access to finance for growing firms as well as help to reduce the cost of doing business. Energy costs and business rates are still too high and this threatens our long term competitiveness.”
