By Maximilian Clarke
Growth in both the UK’s manufacturing and services sectors saw the gross domestic product grow by 0.5% in the third quarter 2011, the Office for National Statistics’ second estimate shows.
The professional services and finance sectors grew by 1.0%, offsetting stagnation in retail and hotels & restaurants sector. All sectors increased growth compared to the second quarter 2011, which saw a meagre growth rate of 0.2%.
Contraction in retail and rock-bottom consumer confidence, coupled with insecurity across the eurozone has led to economists predicting this rate of growth to slow during the final quarter, though the British Chambers of Commerce and Confederation of British Industry think a contraction or return to recession is unlikely.
Growth in the production sector continued to be dragged down by a sustained contraction in the extraction of oil and gas from the North Sea oil fields. Manufacturing growth held up but has been coming down since the start of 2011. Construction growth was -1.9 per cent in September, and -1.8 per cent compared to September a year ago. Weakness in housing construction and maintenance is a key factor holding back construction growth, and reflects the weakness in the wider housing market. Services sector growth continued at 1.2 per cent year on year, but weakened to 0.1 per cent month on month. Growth in the service sector seems to be concentrated in a few components, notably business related professional services and health, whilst financial services dragged down growth in September.
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