The performance of the UK economy in the second quarter of 2013 needs to be set within the context that the Eurozone, as a whole, was in recession in the first quarter of the year and most analysts are expecting it to remain so until the third quarter. The Eurozone bloc is the UK’s largest trading partner, so sluggish demand in the bloc feeds through to the UK.
In the end, the UK produced modest growth of 0.6% for Q2, doubling the growth seen in the first quarter, figures from the Office for National Statistics (ONS) reveal. The improvement was in line with expectations and due to growth in construction, agriculture, manufacturing and service areas of the economy, making it a broad-based, yet hardly profound recovery. The ONS figure is, of course, a preliminary reading of Q2 economic activity, based on 44% of the full data set and it will be subject to revision as more data becomes available.
The UK economy has now regained about half of the output lost during the worst period of the 2008-09 recessionary cycle which was estimated to have reduced the nation’s economic output by 7.2%. That the nation is still so far behind the curve four years after the recession ended shows how sluggish recovery has been in the UK, but also within much of the developed world. The UK economy is still 3.3% below peak outcome seen before the recession started.
On a detailed breakdown, the service sector (a major component of the UK economy) is 0.2% down on the pre-recession level; construction lags by 16.5%; production is 13.4% behind (manufacturing is 10.2% lower). In other words, all of these sectors of the UK economy have lost five years of growth as a consequence of the Global Financial Crisis.
UK Posts Modest Second Quarter Growth
Dr. Mike Campbell is a British scientist and freelance writer. Mike got his doctorate in Ghent, Belgium and has worked in Belgium, France, Monaco and Austria since leaving the UK. As a writer, he specialises in business, science, medicine and environmental subjects.