It marks a slowdown from the 0.5% GDP rise in the previous quarter
The UK economy grew by 0.1% in the three months to September 2024, according to the Office for National Statistics (ONS).
The modest growth, which fell short of economists’ expectations, marks a slowdown from the 0.5% expansion seen in the second quarter. The quarterly growth was primarily driven by an increase in retail trade, excluding motor vehicles, and a rise in new construction work.
However, monthly gross domestic product (GDP) data showed a slight setback, with the economy contracting by 0.1% in September, following unrevised growth of 0.2% in August. The September decline was attributed to drops in manufacturing output and information and communication services.
The services sector, which represents a large portion of UK economic activity, showed no growth in September, following a 0.1% increase in August. Over the three-month period ending in September, services output rose by 0.1%.
Production output, which includes manufacturing, fell by 0.5% in September after an unrevised increase of 0.5% in August. For the three-month period to September, production output declined by 0.2%.
The construction sector recorded a 0.1% increase in output in September, following revised 0.6% growth in August. Over the three-month period, construction output grew by 0.8%.
GDP grew 0.1% in Quarter 3 (July to Sept) 2024.
— Office for National Statistics (ONS) (@ONS) November 15, 2024
Services grew 0.1%, construction grew 0.8% while production fell by 0.2%.
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“The economy grew a little in the latest quarter overall as the recent slowdown in growth continued,” said Liz McKeown, ONS director of economic statistics, commenting on the latest GDP figures.
“Retail and new construction work both performed well, partially offset by falls in telecommunications and wholesale. Generally, growth was subdued across most industries in the latest quarter.
“In September, the economy shrank a little. Services showed no growth with a notable increase in car sales offset by a slow month in IT companies. Production fell overall, driven by manufacturing, though there was an increase in oil and gas extraction.”
According to Damien Wynne, co-founder of house builder Q New Homes, the construction sector’s recovery has sparked optimism for the months ahead, despite rising costs faced by firms, with the government committing to ambitious housebuilding targets.
“As most of the growth we are seeing is coming from new work, this appears to be the area driving the most significant positive change,” Wynne said. “The optimism is further supported by a recent Bank of England decision to cut interest rates for the second time this year, which is expected to provide additional support to the developers by making it cheaper to borrow. This, combined with inflation predictions hovering near the government’s 2% target until 2029, signals a stable economic environment for the UK construction industry.”
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