The U.K. economy fell into a double-dip recession at a faster than estimated pace during the first quarter due to a sharp revision to construction.
Gross domestic product shrank 0.3 percent from a quarter ago, slightly bigger than the previously estimated drop of 0.2 percent, second estimates published by the Office for National Statistics revealed Thursday.
The first quarter decrease follows a similar 0.3 percent decline in the fourth quarter of 2011. Two straight quarters of contraction signals a recession. Also, the economy entered a double-dip recession for the first time since 1970s.
Output of the production industries fell 0.4 percent, within which manufacturing output remained flat. Meanwhile, output of the service industries rose by 0.1 percent. Both production and services output figures matched preliminary estimate published on April 25.
On the other hand, the decline in construction output was revised sharply to 4.8 percent from 3 percent. The first quarter drop was the biggest since 2009.
From a year ago, GDP was down 0.1 percent in the first quarter, the first annual decline since the fourth quarter of 2009.
The expenditure side of the economy showed widespread weakness in the first quarter. Investment dropped 0.3 percent, slower than the 0.6 percent fall in the prior quarter.
The increase in household spending slowed to 0.1 percent from 0.4 percent. Meanwhile, government spending rose at a faster pace of 1.6 percent, following a 0.5 percent gain in the previous quarter.
The level of inventories increased by GBP 1.2 billion in the latest quarter. The deficit in net trade widened to GBP 4.4 billion from GBP 4 billion a quarter ago.
In a separate report, the ONS said business investment rose by GBP 1.1 billion sequentially to GBP 30.8 billion in the first quarter. On a yearly basis, investment grew GBP 3.8 billion or 14.2 percent.
by RTT Staff Writer
For comments and feedback: email@example.com