The UK is coming out faster from recession than we thought. But the hole was deeper.
That seems to be the message from the statisticians’ latest stab at the nation’s output.
The increase in fourth quarter GPD was revised upward from 0.1% to 0.3%, which will cheer many not least the Chancellor.
But it seems that new data seeping into the spreadsheets of statisticians at the ONS point to the hole we were in having been bigger, with earlier growth rates revised downward.
So GDP in current prices in 2008 is now put at £335 million less that it was measured at three months ago and the GDP for the first three quarters of 2009 was revised down by about £2.7 billion. (I dashed this off, so do check me maths)
So when we assess the increase in the growth rate from 0.1% to 0.3% we should heed the advice of Mervyn King, Governor of the Bank of England. He regularly reminds commentators that it is not all about the growth rate, you have to look at the level as well. And that means the starting point is down by about £3 billion.
Put that way, if we stood where we thought we were standing three months ago, a rise of 0.1% in GDP in the fourth quarter would have taken us above where we now think we are having had 0.3% growth on where we now think we were.
Anyway the important bit for us is the view on construction. And here we appear to have the opposite effect going on.
Within these figures, which don’t directly correspond to the official construction output figures, we see that the recession is not thought to have been as bad as we thought last month, or indeed three months ago. So the level appears to be up.
But the bad news to go with that good news is that the industry growth appears to have slipped back into negative territory in the fourth quarter as opposed to having held its own, as estimated a month ago.
That points more strongly to the official figures ending up showing construction exhibiting a double-dip recession.
Swings and roundabouts eh?