IF NOT for the fluctuations in oil and gas, and the effect of one-offs, the UK would have avoided falling into a double-dip recession, revised GDP figures revealed yesterday.
GDP growth would have been zero in the second quarter of 2012, without the impact of the zig-zagging offshore industries, and the extra bank holiday in June, Henderson’s Simon Ward computed with yesterday’s revised data, meaning the country technically avoided going back into recession.
“The onshore economy never double dipped in late 2011 and early 2012, in the conventionally understood sense of recording successive quarterly contractions,” Ward said.
“And excluding oil and gas extraction, the economy expanded 0.6 per cent in the latest four quarters – much better than ‘flat lining’,” Ward added.
But overall the data, released by the Office for National Statistics (ONS) was gloomy, confirming the economy shrunk 0.3 per cent during the fourth quarter – though it revises third quarter GDP growth back to one per cent and now says GDP grew 0.3 per cent over the past year, up from zero.
Within this overall 0.3 per cent decline in the fourth quarter, the composition changed, with construction output now estimated to have grown 0.9 per cent, rather than 0.3 per cent. But the production and services industries wiped out this improvement with worse than expected performances.
And separate figures from the ONS made equally downbeat reading. Business investment was down £400m – 1.2 per cent – in the fourth quarter.
Instead of investment, the economy had to look to consumer and government spending – neither of which grows its productive potential – to hold up its GDP.
Household final consumption expenditure was up 0.2 per cent in the fourth quarter, the ONS said, while government final consumption ticked up by 0.6 per cent.
This comes on top of a 0.5 per cent rise in the third quarter, worrying statistics for chancellor George Osborne’s economic strategy and coming ahead of the Budget.