MNI DATA ANALYSIS: UK Aug Growth Stagnates, But Q3 To Rise>

-UK Aug GDP unchanged m/m, +0.7% 3m/3m vs +0.7% 3m/3m in July  

-Strong July Points to Moderate GDP Gain in Q3

-Energy Production and Generation Only Sectors to Gain in August

     By Laurie Laird and Jamie Satchithanantham 

     London (MNI) - UK economic growth stagnated in the month of August, 

even as three-month growth accelerated following an upgrade to activity 

in the month of July. 

     GDP was unchanged in the month of August, below the MNI median 

forecast of a 0.1% rise, after an upwardly-revised 0.4% rise in July. 

     That took growth in the three months to August to 0.7%, above the 

MNI median of a 0.6% gain, matching the upwardly-revised 0.7% gain in 

the three months to July and a 0.4% rise in the second quarter. 

     Over the year to August, the economy expanded by 1.5%, below the 

year-on-year growth rate of 1.7% recorded in July. 

     But given the strength of July, monthly growth in September need 

only match the level of August for gross domestic product to expand by 

0.6% in the third quarter in the absence of revisions, according to a 

National Statistics official. 

     Production was the only sector to record growth in the month of 

July, powered by energy output and generation. Industrial production 

rose by 0.2% between July and August and by 1.3% over the same month of 

2017, exceeding the MNI median forecast of a 0.1% monthly rise and a 

1.0% annual gain. 

     Mining and quarrying output increased by 2.1% in the month of 

August, accounting for 0.2 percentage points of total monthly growth, 

while electricity and gas increased by 1.8%, contributing 0.3 percentage 

points to overall growth. 

     But manufacturing output fell by 0.2% in August, dampened by a 

downturn in chemical products, falling short of the MNI forecast of a 

0.1% gain. 

     Over the three months to August, total production rose by 0.7%, up 

from a 0.3% decline in the previous three months, while manufacturing 

increased by 0.8%, after a 0.2% gain in the three months to July. 

     The dominant service sector ground to a halt in August, recording 

no change from July, falling short of the MNI median forecast of a 0.1% 

gain. Services, which account for 79.6% of total output, contributed a 

paltry 0.01 percentage points to monthly GDP growth. 

     Services expanded by 0.5% in the three months to August, matching 

the MNI median forecast, down from the 0.7% gain reported in the 

previous three months. The sector accounted for 0.42 percentage points 

of total growth in the three months to August. 

     Meanwhile, construction output declined by 0.7% in August, slightly 

better than the MNI median of a 0.8% decline, rising by 0.3% over the 

same month of 2017. Construction, which comprises 6.0% of output, 

subtracted 0.04 percentage points from total monthly growth. 

     Over the three months to August, construction output expanded by 

2.9%, down from the 3.1% surge in the previous three months, 

contributing 0.17 percentage points to three-month growth. 

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

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