MNI DATA ANALYSIS: UK Growth Picks Up in May; Construction Up>

-UK May GDP +0.3% m/m, +0.2% 3m/3m vs 0.0% 3m/3m in April

     By Laurie Laird and Jamie Satchithanantham 

     London (MNI) - UK economic growth accelerated modestly in the month 

of May, lifted in part by a smart rebound in construction activity, 

pushing growth into positive territory in the three months to May after 

a flat performance in the February to April period. 

     GDP expanded by 0.3% in April, according to a new series published 

on Tuesday by the Office For National Statistics, matching the MNI 

median forecast, up from a 0.2% gain in March and no growth in April. 

     That took growth in the three months to May to 0.2%, in line with  

the MNI median, after recording no change in the three months ending in 

April. 

     The acceleration in June leaves growth on track to accelerate in 

the second calendar quarter of the year. GDP could fall by as much as 

0.9% in June and leave second quarter output on level pegging with the 

opening three months of the year. GDP has not fallen by that magnitude 

since September of 2012, according to an ONS official. 

     A 2.9% surge in construction output, the largest rise since April 

of 2016, accounted for 0.18 percentage points of growth, powered by a 

7.3% jump in private housing repair and maintenance. However, 

construction output remained in the red on an annual basis, dropping by 

0.3% over the same period of 2017. 

     The dominant service sector expanded by 0.3% in May, matching the 

MNI median forecast, down from an upwardly-revised 0.4% gain in April, 

accounting for 0.21 percentage points of total growth. 

     However, growth accelerated to 0.4% in three months to May, up from 

0.2% in the February to April period. Services output expanded by 1.7% 

over May of 2017. 

     Industrial production represented a weak spot in the May data, 

dampened by a 4.6% slump in mining and quarrying. The Sullom Voe North 

Sea pipeline, which accounts for 12% of U.K. oil production, suffered a 

four-day shutdown during the month. 

     That means production must rise by 3.8% in the month of June, an 

increase not recorded since early 1979, to contribute positive to GDP in 

the second quarter. 

     Manufacturing output lifted total production, rising by 0.4% below 

the MNI median of a 1.0% month-on-month improvement. 

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

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