Economy growing at around half the pace of last year

At 0.5%, today’s preliminary estimate of GDP quarterly growth in 2022 Q3 was a little weaker than expected (0.6%), down from 0.7% in Q2, and continued the run of below-par growth throughout 2022. Comparing with the same quarter of last year, growth was 2.3%.

Looking at the measure of GDP excluding oil and gas (‘GVAX’), which tends to be used by the OBR and others for forecasting purposes, growth was unchanged at 0.5%. Over 2021 as a whole GVAX averaged 0.8% a quarter; in 2022 so far GVAX growth has averaged only 0.4%. (Unrounded: 0.75 v. 0.43)

While growth in the latest quarter is driven almost entirely by the service sector (and a bounce from energy extraction like last quarter – see), over the year the services are still weaker than last (0.9% v. 0.6%).

In the meantime manufacturing is still (‘officially’) in recession, having fallen for three consecutive quarters, by -0.3% in Q3, -0.5% in Q2 and -0.1% in Q1. Construction has also come off headier growth rates in 2021, and was down -2.2% in the latest quarter.

As TUC General Secretary Frances O’Grady said:

“We need better balanced growth that delivers secure opportunities for working families. But while the economy is still expanding, the recovery is too weak, and Britain’s manufacturing industry remains in decline. What’s more, the government’s failure to protect our steel industry looks set to mean the loss of even more manufacturing jobs.

“We need a proper industrial strategy to ensure our manufacturing industry keeps up with the rest of the world. And the Chancellor must invest more to boost demand rather than cutting the public services and tax credits which are vital to supporting working families.”