Friday, August 28, 2015

Second quarter growth figures

More details are now available about the British Gross Domestic Product figures for the second quarter of 2015 which were confirmed today by ONS at 0.7%, fuelled by a surge in exports.

Exports rose 3.9%, up from 0.4%, while imports were up 0.6%, leaving the UK with positive net trade.

Year-on-year, GDP growth was 2.6%, unrevised from the first estimate.

The ONS data, published in July, also showed that the production and service sectors lifted the UK economy to pre-crisis levels.

The production sector saw a 1% jump in output in the second quarter, the biggest rise since 2010, when it grew by 0.7%. Agriculture was down 0.7%, compared to a fall of 2.3% in the first quarter, and construction output saw no change.

Samuel Tombs, senior economist at Capital Economics, said: "Investment rose by 0.9%, reflecting a hefty 2.9% increase in business investment, putting paid to the idea that uncertainty about the general election would weigh on capital expenditure."


Jim said...

I should have mentioned in the earlier post comment, where I pointed out that that the growth we see is a reflection on the fall in fuel prices.

I am fully aware that correlation does not automatically mean causation, but, I am also fully aware that the "long arm of coincidence" is only so long. What we are seeing is exactly, exactly as was presented, baselined and underpinned by the campaign.

Chris Whiteside said...

I am certain you are right that lower fuel price have been very helpful in boosting the recovery though there are other positive factors including investment, exports and, at long last, productivity.

Of course, it is not a matter of these all being independent. Lower fuel prices may be one of the factors behind better investment and exports as well as a direct factor in growth.

Something for GO to bear in mind, I hope, if there is any sign that the economy might be about to hit another recession and he needs to give it a powerful stimulus.

Jim said...

That's pretty much it, many people stated that lower fuel duty would not help so much as other things, without seeing the "bigger picture"

Fuel duty hinders production because things we produce use fuel. Take a factory, ingredients in, produce goods, goods out. - but how do the ingredients get there, or the products get out, how do the factory workers get to work etc.

even people in supermarkets said they would rather see the shop prices fall than the fuel prices at the petrol station fall, but again none could see the big picture, how did they get to supermarket (bus, car, train?) bus fair is also dependent on fuel price.

how did the food for sale get there?, how was it produced?
- all of which are obvious factors in the price the supermarket charges the end customer (every customer, regardless of their travel choice, even if they walked there)

how do imports get here or exports get out? they go on trucks and trains and ferries and aircraft and things, but then all of those use Fuel.

Its a far bigger argument than people first think, they tend to assume a boy racer wants a tank of cheap petrol when we talk of fuel duty, rather than see the larger picture and how fuel is critical to the economy of the UK on the whole.

Jim said...

Its true that my wife, who works in Penrith, had also been looking for work closer to home, but failing to find it, had at one point considered giving up work all together. it was too expensive to get there so it was not worth going. a car school* prevented that in the end, but that was more luck than anything)

but would that have been a gain or a loss to the economy on the whole?

fuel duty has an effect on everything, right down to the cost of a postage stamp, its one of those taxes that hinders rather than helps a problem. That is down to the fact that high fuel duty hinders the very methods aiding economic growth (production, imports and exports, travel to from work, transport and logistics), and if you cant employ the methods available to achieve growth, then you wont get it.

kind of like attempting to drive Cinderella in the carriage to the ball, but putting a huge tax on horses.

*car school = car sharing scheme, you drive us both in in your car this week, i will drive us both in my car next week

Chris Whiteside said...

Quite. I think the fuel price "escalator" - or at least, to allow it to go anything like as high as it did - must rank as one of the most misguided economic policies in history.