| Consensus | Actual | Previous | Revised | |
|---|---|---|---|---|
| Month over Month | 0.1% | -0.3% | 0.0% | |
| 3-Months over 3-Months | 0.1% | 0.1% | 0.1% | 0.2% |
Highlights
The economy was surprisingly weak in March. Real GDP contracted 0.3 percent on the month, well short of the market consensus and, the weakest performance since a 0.5 percent contraction in December. Quarterly growth was positive but only just at 0.1 percent, down from 0.2 percent in the three months to February. The annual expansion halved to 0.3 percent and total output now stands a meagre 0.1 percent above its pre-Covid level in February 2020.
The unexpected headline decline was largely attributable to services where output dropped 0.5 percent after an unrevised 0.1 percent dip in February. Output in consumer facing services was down fully 0.8 percent, easily more than unwinding the mid-quarter's 0.4 percent gain. By contrast, goods production was up a healthy 0.7 percent, its best monthly growth rate since May 2021 and following a slightly smaller revised decrease of 0.1 percent previously.
Positive quarterly growth will come as no surprise indeed, the rate was in line with market expectations. Even so, the disappointing March figure points to sluggish momentum going into the current period and may be seen by some as arguing against yesterday's twelfth consecutive hike in Bank Rate by the BoE. That said, at 13 and 19 respectively, the UK's ECDI and ECDI-P remain above zero and so still indicative of slightly faster than expected growth of overall economic activity.
The unexpected headline decline was largely attributable to services where output dropped 0.5 percent after an unrevised 0.1 percent dip in February. Output in consumer facing services was down fully 0.8 percent, easily more than unwinding the mid-quarter's 0.4 percent gain. By contrast, goods production was up a healthy 0.7 percent, its best monthly growth rate since May 2021 and following a slightly smaller revised decrease of 0.1 percent previously.
Positive quarterly growth will come as no surprise indeed, the rate was in line with market expectations. Even so, the disappointing March figure points to sluggish momentum going into the current period and may be seen by some as arguing against yesterday's twelfth consecutive hike in Bank Rate by the BoE. That said, at 13 and 19 respectively, the UK's ECDI and ECDI-P remain above zero and so still indicative of slightly faster than expected growth of overall economic activity.
Market Consensus Before Announcement
GDP in the month of March is expected to rise 0.1 percent versus no change in February which compared with expectations for a 0.2 percent increase. The 3-month rate is seen unchanged at 0.1 percent.
Definition
Gross domestic product (GDP) is the broadest measure of aggregate economic activity and encompasses every sector of the economy. The monthly report is based on output data only as the income and expenditure series are not available.
Description
GDP covers all aspects of economic activity. Investors need to closely track the economy because it usually dictates how investments will perform. Stock market investors like to see healthy economic growth because robust business activity translates to higher corporate profits. GDP contains a treasure-trove of information which not only paints an image of the overall economy, but tells investors about important trends within the big picture. However, the monthly report is quite limited and only provides data on the main output sectors. More detailed information is available in the quarterly reports.
