MNI DATA ANALYSIS: Q1 GDP +0.1 unrevised vs +0.4% Q4>

-UK Q1 Business Investment -0.2% q/q vs +0.3% in Q4

-UK Q1 Household Consumption +0.2% vs +0.3% in Q4

-UK Q1 Net Trade provides neutral influence on total owth 

-UK Q1 Services +0.3% vs +0.4% in Q4

     By Laurie Laird and Jamie Satchithanantham 

     London (MNI) - UK economic growth slowed sharply in the first 

quarter, induced partly by a slowdown in business investment and anaemic 

household spending, confirming preliminary data released a month ago. 

     Gross domestic product increased by 0.1% in first three months of 

the year, in line with the MNI median forecast and matching the 

originally-reported 0.1% gain, a marked decline from the 0.4% pace 

recorded in the final quarter of 2017.  

     On an annual basis, output rose by 1.2%, also in line with analyst 

expectations and matching the result reported last month.       

     Thursday's data provided a first look at the expenditure components 

of economic activity. 

     Business investment took a hit over the first three months of the 

year, suggesting growth woes were not solely weather related, having 

held up reasonably well in the wake of the vote to leave the European 

Union in June of 2016. 

     Investment fell 0.2% in the first quarter, the first quarterly 

fall since Q4 2016 and the worst outturn since Q3 2015, after growing 

by 0.3% in the final quarter of 2017. This meant the component failed to 

exert any influence on total growth.

    Household consumption, which comprises just under two-thirds of 

GDP, also contributed to the weaker Q1 showing. Consumption grew by just 

0.2% over Q1, the weakest outturn since Q4 2014, to account for 0.2 

percentage points of total growth. 

    As suggested by monthly export and import data, net trade failed to 

exert any influence effect on GDP. Exports decreased by 0.5% over the 

fourth quarter, while imports fell by 0.6%. As a result, net trade 

boosted total growth by 0.0 percentage points to one decimal place. 

     Elsewhere, government spending increased on the quarter, up 0.5% 

q/q, adding 0.1pp to total growth. 

     On an output basis, there were no significant revisions to the 

data.  

     Service sector growth grew by 0.3% in the first quarter, unchanged 

from the preliminary estimate, accounting for 0.2 percentage points of 

total growth. The sector had expanded by 0.4% in Q4 2017.  

     Output of services expanded by 0.1% between February and March, 

according to a separate report released on Friday, in line with the 

estimated 0.1% gain included in the first estimate of GDP. Services 

account for 79.3% of total output. 

     Industrial output jumped by 0.6% in the first quarter, as indicated 

by monthly industry data, exerting a modest 0.1pp positive influence on 

total growth. Industrial production comprises 14.0% of total output. 

     Within this, manufacturing activity expanded by 0.2% in the first 

quarter, unchanged from the gain reported earlier this month, failing to 

contribute to total quarterly growth for the first time since Q2 2017. 

     The construction sector contracted by 2.7% in the first three 

months of the year, in line with what was reported earlier in the month, 

shaving growth by 0.2 percentage points. Construction output, which 

comprises 6.1% of total growth, has fallen for the past two consecutive 

quarters. 

     The second estimate of GDP growth, as released on Thursday, draws 

upon hard data for between 50% and 60% of calculations, with the balance 

comprised of estimates, according to a National Statistics official. 

-London bureau: 44 (0) 203 865 3812; email: ukeditorial@marketnews.com