UK’s double-dip recession revised as productivity takes hit

Posted on 27 Jun 2013 by The Manufacturer

New figures released by the Office of National Statistic (ONS) have erased last year's double-dip recession, yet show UK output continues to struggle.

The ONS’s revised data shows growth was flat in the first quarter of 2012, revised from an earlier estimate of a 0.1% contraction.

Additionally, the ONS confirmed that GDP grew by 0.3% in the first quarter of 2013 – growth largely helped by a stronger performance from the construction sector.

But the stats also show manufacturing output fell 0.2% in Q1 compared with previous estimates on 0.3%, 11% below its pre-recession peak.

Data shows the construction sector performed stronger than expected in the first quarter of 2012, largely credited with the revised figures.

In alarming figures showing the UK economy is further away from recovery as previously thought, GDP was 3.9% below its January 2008 peak, after a previous estimate of 2.6%.

Data shows the 2008 recession was worse than initially thought, with GDP during that time estimated to have dropped by 7.2% from peak to trough, revised from a previous figure of 6.3%.

Lee Hopley, chief economist at EEF, the manufacturers’ organisation, said: “While ONS has revised away the double-dip downturn and confirmed that the economy grew in the first quarter of this year, that is where the positive news ends.”

“Output across the economy and manufacturing has made up less ground since the end of the recession than previously thought and signs of any sustained rebalancing towards trade and investment remain elusive,” he added.

In more positive news, the recovery is expected to pick up in the second quarter of 2013, with GDP forecasted to grow by 0.5%.