By Richard Johnstone | 23 August 2013
The Office for National Statistics has today revised up its estimate for growth in the second quarter of this year by 0.1 percentage point to 0.7%.
In its second estimate of growth for the three-month period to the end of June, the ONS found that industrial economic output increased by more than originally though across a number of industries, leading to the revision. All four main industrial groupings (agriculture, production, construction and services) increased their output in the second quarter of 2013. The last time this happened was in the third quarter of 2010.
Following the publication of the revised figures, the Centre for Economics and Business Research said the improved figures mean output now stands 1.5% above the same period a year ago. However, it remains 3.2% below the peak level reached before the economic crisis, in the first quarter of 2008.
Colin Edwards, an economist at the CEBR, said increases in output from agriculture, revised up to 1.7% from 1.1% in the new figures, manufacturing (up to 0.7% from 0.4% previously), and construction (up from 0.9% to 1.4%), led to the overall hike. These increases were more than enough to offset downward revisions in sectors such as electricity and gas and extractive industries, he said.
However, the figures also indicate that the government faces ‘ongoing difficulties’ in reducing public spending, which rose by 0.9% in the three months to June, the fourth consecutive quarterly increase.
‘This growth is unlikely to go on indefinitely - once the next election is in the rear view mirror, the new government will be left with the same task of revisiting belt-tightening in earnest, acting as the drag on growth,’ Edwards warned.
‘Overall, it is of course encouraging that the UK economy is expanding, and at an increasing rate. We expect growth to exceed 1% this year, accelerating further into 2014. And increasing exports will be key to achieving a sustainable recovery going forward.
‘Nevertheless, continuing weak investment, combined with a reliance on unsustainable household and government spending remain key risks to the path of economic growth in the UK.’
