Con­struc­tion helps econ­omy re­bound in July

Belfast Telegraph - Business Telegraph - - News - BY KAYLEENA MAKORTOFF

THE UK econ­omy bounced back in July as the ser­vices sec­tor re­bounded and con­struc­tion out­put reached a record high.

The Of­fice for Na­tional Statis­tics (ONS) said the econ­omy ex­panded 0.3% in July, while gross do­mes­tic prod­uct (GDP) rose 0.6% on a three-month ba­sis.

That was ahead of econ­o­mist ex­pec­ta­tions for a 0.1% and 0.5% rise, re­spec­tively.

Eco­nomic growth was bol­stered in part by the UK’S dom­i­nant ser­vices sec­tor, which grew 0.3% month-on-month thanks to ac­tiv­ity in the pro­fes­sional, sci­en­tific and tech­ni­cal in­dus­tries.

On a three-month ba­sis, the ser­vices sec­tor grew by 0.6% on the back of a rise in re­tail and whole­sale trad­ing, which was bol­stered by growth in food sales dur­ing the World Cup and hot weather.

Con­struc­tion also per­formed strongly, ris­ing 0.5% in July on the back of stronger than usual growth in house­build­ing for this time of year.

It sent con­struc­tion out­put to a record high, with the sec­tor grow­ing 3.3% on a three-month ba­sis.

The pound was pos­i­tive on the news, up 0.15% on the US dol­lar to trade at 1.293, and ris­ing 0.2% ver­sus the euro to 1.118.

The Of­fice for Na­tional Statis­tics’ head of GDP, Rob Kent-smith, said: “Growth in the econ­omy picked up in the three months to July.

“How­ever, pro­duc­tion fell back, with man­u­fac­tur­ing again slip­ping a lit­tle while en­ergy gen­er­a­tion and sup­ply fell due to re­duced de­mand.

“The dom­i­nant ser­vice sec­tor again led eco­nomic growth in the month of July with en­gi­neers, ac­coun­tants and lawyers all en­joy­ing a busy pe­riod, backed up by growth in con­struc­tion, which hit an­other record high level.”

A 0.2% con­trac­tion in man­u­fac­tur­ing dragged on pro­duc­tion growth, which was up just 0.1% in July.

The agri­cul­tural sec­tor also shrank 0.1%. Howard Archer, chief eco­nomic ad­viser to the EY ITEM Club, said the over­all eco­nomic performance in July could put the UK on track to beat ex­pec­ta­tions for the third quar­ter of 2018.

He said: “We had ex­pected GDP growth to be sta­ble at 0.4% quar­ter-on-quar­ter in the third quar­ter but the July data mean there is a very real chance it could im­prove to 0.5%.”

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