Collapsing construction output has caused the UK’s Gross Domestic Product (GDP) to falll by 2.4% in the first quarter of 2009, the lowest year-on-year drop on record.
GDP in real terms in the first quarter of 2009 fell by 2.4% compared with the previous quarter, the Office of National Statistics has revealed. This estimate has been revised down from last month’s estimate of a 1.9% fall, with around half of this revision coming from new data for the construction sector. GDP is now 4.9% lower than the first quarter of 2008, the largest fall on record.
Construction output fell 6.9% compared with a fall of 5.0% in the previous quarter. Output of the production industries fell 5.1%, while service industries fell by 1.6%, wiith negative growth in all sub-industries except government and other services which grew by 0.2%.
Household expenditure fell by 1.3%, with falls in consumption of household goods and services, restaurants and hotels, spending abroad and motor vehicles.
Government final consumption expenditure rose by 0.2% and is now 2.8% higher than the first quarter of 2008.
The UK’s trade deficit in real terms decreased to £8.0bn in the first quarter of 2009 from £8.4bn in the previous quarter. Exports of goods and services fell 6.9% while imports fell 6.7%.
Revisions to GDP are larger than usual, reflecting greater uncertainty in measurement during a period of rapid change in economic activity. Around 85% of the latest estimate for Q1 2009 is based on data, the rest being modelled. This compares with 45% when the estimate was first published in April.