Growth is running at half of last year’s rate

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This is easily the best commentary on yesterday's growth data that I have seen and comes from Geoff Tily at the TUC (whose blog is worth following):

At 0.5%, today’s preliminary estimate of GDP quarterly growth in 2015 Q3 was a little weaker than expected (0.6%), down from 0.7% in Q2, and continued the run of below-par growth throughout 2015. Comparing with the same quarter of last year, growth was 2.3%.

Looking at the measure of GDP excluding oil and gas (‘GVAX’), which tends to be used by the OBR and others for forecasting purposes, growth was unchanged at 0.5%. Over 2014 as a whole GVAX averaged 0.8% a quarter; in 2015 so far GVAX growth has averaged only 0.4%. (Unrounded: 0.75 v. 0.43)

Economic growth, quarter on previous quarter

gdp15q3

 

While growth in the latest quarter is driven almost entirely by the service sector (and a bounce from energy extraction like last quarter – see), over the year the services are still weaker than last (0.9% v. 0.6%).

In the meantime manufacturing is still (‘officially’) in recession, having fallen for three consecutive quarters, by -0.3% in Q3, -0.5% in Q2 and -0.1% in Q1. Construction has also come off headier growth rates in 2014, and was down -2.2% in the latest quarter.

To put it another way: Osborne rode a lucky wave in May and it looks as though it's already fading.