MNI DATA ANALYSIS: Q4 GDP +0.4% vs +0.5% Previous Estimate>

-UK Q4 Business Investment unchanged q/q vs +0.9% in Q3

-UK Q4 Household Consumption +0.3% vs +0.4% in Q3

-UK Q4 Net Trade Subtracts 0.5 percentage points from total growth

-UK Q4 Services +0.6% vs +0.6% previous estimate, +0.4% in Q3

     By Laurie Laird and Jamie Satchithanantham 

     London (MNI) - UK economic growth  slowed in the final quarter of 

the year, as gross domestic product was revised downward, dampened by a 

slowdown in exports over the latter part of 2017. 

     Gross domestic product increased by 0.4% in final three months of 

the year, falling short of the MNI median forecast of 0.5, down from the 

originally-reported 0.5% gain. 

     Growth over the third quarter was revised upward, to a quarterly 

rate of 0.5%, while first quarter growth was downgraded by 0.1 

percentage point to 0.2%. That left calendar-year growth at 1.7%, down 

from the originally-reported 1.8%, and the slowest growth since 2012. 

     On an annual basis, output rose by 1.4% in the fourth quarter, 

below the MNI median of 1.5% and the result reported last month. 

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

of economic activity. 

     As suggested by monthly export and import data, net trade exerted a 

negative effect on GDP. Exports decreased by 0.2% over the fourth 

quarter, the first decline since the third quarter of 2016, while 

imports jumped by 1.5%, the biggest rise since the third quarter of 

2016. As a result, net trade reduced total growth by 0.5 percentage 

points. 

     Household consumption, which comprises just under two-thirds of 

GDP, increased by 0.3% in the fourth quarter, down from a 0.4% gain in 

the previous period, to account for 0.2 percentage points of total 

growth. 

     Government spending jumped by 0.6%, the biggest rise since the 

first quarter of 2016, adding 0.1 percentage point to total growth. 

     Small downward revisions to the service and industrial sectors 

accounted for the downgrading of total growth, although the outturn for 

the two largest output components of the economy appeared unchanged when 

measured to one decimal place. 

     The service sector expanded by 0.6% in the fourth quarter, 

accounting for 0.4 percentage points of total growth, matching the 0.6% 

gain included in the early estimate of GDP released last month. 

     Output of services was unchanged between November and December, 

according to a separate report released on Thursday, matching the 

estimate of no change included in the first estimate of GDP. Services 

account for 79.3% of total output. 

     Industrial output jumped by 0.5% in the fourth quarter, as 

indicated by monthly industry data, providing 0.1pp to overall growth.  

Industrial production comprises 14.0% of total output. 

     Manufacturing activity expanded by 1.3% in the fourth quarter, in 

line with the gain reported earlier this month, accounting for 0.1 

percentage points of total growth. 

     The construction sector contracted by 0.7% in the final three 

months of the year, matching decline reported earlier in the month, 

exerting a neutral effect on growth. Construction output, which 

comprises 6.1% of the economy, has now fallen for the three 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

[TOPICS: M$B$$$,MABDS$]