UK GDP returns to pre-crisis levels as manufacturing slows

Posted on 25 Jul 2014 by The Manufacturer

The UK economy is now above pre-recession levels, but the growth of its manufacturing sector slowed, according to new data released today.

The Office of National Statistics findings show the UK’s GDP grew 0.8% in the period between April-June, in line with economist forecasts.

In comparison to the same quarter for last year, growth stood at 3.1%, making the total economic output 0.2% bigger than the first quarter of 2008.

The figures were credited to strong performances in the UK’s dominant services industry, which grew by 1% in the second quarter from the previous three months.

Marking the fastest quarterly growth since the third quarter of 2012, this was in contrast to manufacturing, which saw its weakest growth rate in more than a year of just 0.2% between April and June.

But Lee Hopley, chief economist at EEF, the manufacturers’ organisation, remains upbeat over the prospects of the sector.

She said the results confirmed the solid momentum in the economy, underpinned by a fifth consecutive quarter of manufacturing expansion.

“The sector still has some ground to recover after a deeper fall but, while growth in the second quarter eased back slightly, positive survey data on new orders and investment plans mean output remains firmly on track in 2014 to expand at its fastest pace in four years,” she said.

But Ms Hopley warned the summer months were critical for policy makers to focus on inward investment and export from the UK.

“We still have a hill to climb in building the right conditions for companies to invest in and, export from, the UK,” she said.

“This includes pressing ahead with measures to secure a more highly skilled workforce, accelerating improvements in access to finance and, working on the pipeline of new infrastructure projects.”