Preview of UK GDP data due Friday 9 November 2018
Economic growth data for the UK Q3 of 2018
- Based on our forecasts for flat industrial production, a small 0.1% rise in service sector output and a modest rebound in construction output, GDP would rise by 0.1% in September. That would in turn imply a 0.6% q-o-q growth rate for Q3. While it would take a material downside surprise to the monthly rate to yield something weaker than 0.6% q-o-q, only a small upside surprise could easily push growth up to 0.7% during the quarter relative to our 0.6% view.
- The manufacturing PMI and CBI surveys held up reasonably well in September before falling in October; however, car production (worth just 6½% of total industrial production and about 9% of manufacturing) was weak during September according to the SMMT (Society of Motor Manufacturers and Traders) figures. We forecast a flat manufacturing reading, but the risk is that weak auto production ends up dominating the figures.
GDP preview via RBC:
- The UK economy looks set to avoid the 'weaker momentum' that afflicted the euro area in Q3 … and instead we expect growth to accelerate from Q2's 0.4% q/q to 0.6% q/q. Even though growth was flat m/m in August, the July expansion of 0.4% m/m meant that the quarter got off to a very strong start as the good summer weather boosted consumer spending and construction activity. This first release of quarterly GDP now comes with an expenditure breakdown which we expect to show household consumption and investment being the major contributors to third quarter growth.