UK Economy Recovers On Services Output

(RTTNews) - The UK economy grew in April as declines in production and construction were offset by the services output growth, official data revealed on Wednesday.

Real gross domestic product grew 0.2 percent in April, in contrast to the 0.3 percent contraction in March, the Office for National Statistics reported. The monthly growth matched economists' expectations.

Monthly GDP was estimated to be 0.3 percent above its pre-coronavirus levels. On a yearly basis, GDP advanced at a faster pace of 0.5 percent in April after a 0.3 percent rise in March.

Growth in services was offset by falls in both production and construction. Following a 0.5 percent drop in March, services output climbed 0.3 percent. Wholesale and retail trade, and information and communication were the major contributors.

At the same time, industrial production eased 0.3 percent, reversing March's 0.7 percent increase. Manufacturing was the largest contributor to the negative growth, down 0.3 percent. Due to the weakness in the petroleum and gas extraction, mining and quarrying output slid 1.9 percent.

After two months of growth, construction output decreased 0.6 percent. There was a 1.0 percent decrease in new work, while repair and maintenance gained 0.1 percent.

In the three months to April, GDP gained 0.1 percent from the preceding three months, the ONS said.

The 0.1 percent growth for the three months to April further indicates the UK economy is trapped on a low-growth trajectory, British Chambers of Commerce Head of Research David Bharier said.

The business lobby forecast the economy to grow 0.3 percent this year as most SMEs are still holding back on their investment plans.

Another report from ONS showed that the visible trade deficit narrowed to GBP 14.99 billion in April from GBP 16.36 billion in March. At the same time, the surplus on services trade was largely unchanged at GBP 13.48 billion.

The total trade balance resulted in a deficit of GBP 1.5 billion compared to a shortfall of GBP 2.86 billion in March.