Economy

United Kingdom economic growth rises due to manufacturing push

United Kingdom economic growth rises due to manufacturing push”

"Today's figures show the economy remains robust, with growth of 0.5% in Q1 benefiting every major sector", he said.

Compared to the same quarter a year ago, UK GDP increased by 1.8 per cent for the first three months of 2019; up from 1.4 per cent in the first three months of last year.

Meanwhile, manufacturing increased by 1.5% in January, but by only 0.9% in March.

Inventories were also a contributing factor, as some businesses stockpiled parts due to concerns over supply disruption if the United Kingdom crashed out of the European Union without a deal.

United Kingdom economic growth accelerated in the first quarter of this year, driven by the highest quarterly pick-up in manufacturing since the 1980s as the original Brexit deadline loomed.

The manufacturing figures clearly show there was an impact from stockpiling.

In the first quarter, "businesses purchased more goods to keep in storage in the event of a no-deal Brexit affecting supply chains and the ability for businesses to the buy goods they need for production", the Centre for Economics and Business Research said in a note to clients on Friday. There is evidence, including from the Bank of England, that executives were planning for the prospect of a "no-deal" Brexit that would have led to tariffs on many goods and disruption at ports.

The statistics agency did not provide details of the stockpiling boom but did acknowledge that it occurred. That was largely due to a pick-up in exports as well as some preparations in anticipation of Brexit. While a build-up of inventories boosted GDP by 0.7 percentage points, a large proportion of stocks were imported, meaning the economy suffered in its trade position.

ONS also said that net trade weighed on the economy in the first quarter of 2019.

Growth is expected to moderate in the second quarter as firms ease their stockpiling.

He told The National: "The underlying post-Brexit story is one of weakness in business investment". The uncertainty helps explain why the British economy shrank by a monthly rate of 0.1% in March.

The manufacturing sector grew in the first three months at its fastest rate since 1988, while the pharmaceutical industry also grew by 9.4 per cent in the same time period.

The UK also saw the first quarter of business investment growth since the fourth quarter of 2017.



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