GDP suffers worst quarterly fall since 1958
The construction sector suffered a 6.9 per cent fall in output
Also In The News
|
Andy Murray has come through a tense five set battle against Stanislas Wawrinka to reach the quarter-finals of Wimbledon. |  |
Tuesday, 30, Jun 2009 05:15
UK GDP suffered its worst quarterly fall since 1958, falling 2.4 per cent in the first quarter of 2009.
The Office of National Statistics (ONS) revised down its previous estimates today, saying economic output had contracted 4.9 per cent compared to a year ago.
The construction sector suffered a 6.9 per cent fall in output in the first quarter, compared to the last quarter of 2008.
Last month the ONS put the contraction at 1.9 per cent - but the further quarterly was drop put down to new data from the construction industry and the services sector.
All areas of the economy saw contraction, except government spending, which rose 0.2 per cent.
The ONS stated: "Revisions to GDP are larger than usual, reflecting greater uncertainty in measurement during a period of rapid change in economic activity."
The data also show household final expenditure fell by 1.7 per cent in the latest quarter.
However, as low interest rates cut mortgage repayments, real disposable income increased by 2.7 per cent compared to a year ago.
Royal Institution of Chartered Surveyors (Rics) chief economist, Simon Rubinsohn, said: "Revised estimates of construction output contributed heavily to the downgrading of GDP in the first quarter of the year.
"Although the sector only accounts for around 6 per cent of total output in the economy, the scale of the shift was sufficiently large enough to have a material impact.
"Recent surveys of the sector suggest that construction output is now falling at a lesser rate than earlier in the year. This is also evident in the April new orders data. However with development finance in such short supply, it is unlikely that construction will be making a positive contribution to the wider economy at any point over the course of this year."