Retail Economics Response: GDP Monthly estimate August 2018

01 November 2018

UK gross domestic product (GDP) grew by 0.7% in the three months to August, unchanged from the upwardly revised previous three-month period (May-July). This was the joint highest growth rate since February 2017. GDP was boosted by the warm weather during the summer months.

UK GDP growth, Quarter 4 (Oct to Dec) 2016 until June to August 2018

Source: ONS

All three main sectors contributed positively to GDP growth. Indeed, Services grew 0.5% in the three-months to August, while construction and production grew 0.7% and 2.9% respectively. It was retail trade and wholesale trade which was one of the main drivers in the Services component. On an annual basis, growth in the services sector has been fairly muted compared to recent years. Indeed, in the three-months to August, the sector grew 1.6%, lower than the 2.2% rise in the same three months a year earlier

Services growth, three months on three months a year earlier, December to February 2016 until June to August 2018

Source: ONS

Construction grew 2.9% in the three-months to August, although growth was being compared with a weak base period, flattering the numbers. The ONS noted that private housing new work was the largest contributor to the three-month rolling growth rate. On a month-on-month basis, construction fell 0.7%.

Production grew 0.7% in the three-months to August driven by a strong performance in the mining and quarrying sub-component.