UK Analysis: IoP, Construction Slightly Dampen Q2 GDP>

-UK Q2 IoP unchanged vs -0.4% in GDP report

-UK Q2 Construction -1.3% vs -0.9% in GDP report

-UK June IoP +0.5% m/m; +0.3% y/y

-UK June Construction -0.1% m/m; +0.9% y/y

-UK June Manufacturing 0.0% m/m; +0.6% y/y

     By Jamie Satchithanantham and David Robinson 

     London (MNI) - Despite a downward revision to growth in 

construction output between April and June, the two sectors' combined 

impact on second quarter gross domestic product was only marginally 

negative. 

     Total production contracted by 0.4% between the first and second 

quarters of 2017, matching the decline included in the first estimate of 

GDP released last month. Production subtracted 0.1 percentage point from 

total growth of 0.3% in the second three months of the year, driven 

almost entirely by a fall in manufacturing output which reflected a 

decline in the production of motor vehicles. 

     In the month of June, industrial production rose by 0.5%, above the 

MNI median forecast of a 0.2% rise. National statisticians estimated a 

0.1% monthly gain in calculating the first estimate of GDP. Production 

accounts for 14.6% of total output. 

     On an annual basis, production increased by +0.3% in June, 

also above the MNI median forecast of a 0.1% decline. 

     Meanwhile, construction output fell by 1.3% in the second quarter, 

compared to the 0.9% slump included in the first estimate of GDP. The 

sector was previously adjudged to have knocked 0.1 percentage points off 

Q2 GDP growth. Construction accounts for 5.9% of total output. 

     Over the month of June, construction fell by 0.1%, below  

the median MNI forecast of a 1.5% gain and the 1.8% estimate used to 

derive the first estimate of GDP. 

     Over the year to June, construction output increased by 0.9%, above 

the MNI median forecast of a 0.3% gain. Taken together, the potential 

downward impact of these revisions to the previously published GDP 

growth on the quarter is -0.01 percentage points, which does not impact 

the headline GDP growth rate to one decimal point.    

     Manufacturing output was flat in June, below the median MNI 

forecast of a 0.2% gain.  In the year to June, manufacturing output 

increased by 0.6%, falling short of the MNI median forecast of a 0.8% 

increase. 

     That pushed manufacturing output down by 0.1pp in the second 

quarter, to -0.6% q/q, compare to the 0.5% decline included in the 

first estimate of GDP. 

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

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