Business digest October 2006

The economy continues to grow, but at a slower rate than had been previously estimated.

According to official government statistics, GDP grew by 0.7% in the second quarter of 2006. This has been revised down from an earlier estimate of 0.8%, mainly due to lower estimates of government and other services output. The level of GDP is now 2.6% higher than the second quarter of 2005.

In the second quarter of 2006, production was unchanged compared to Q1, with manufacturing growing by 0.7%, while mining and quarrying fell by 3.9% and electricity, gas and water supply fell by 2.6%. Services grew by 0.9%, with the financial and business sectors growing by 1.4%. Growth in government and other services decelerated to a growth of 0.4% from 0.6% in Q1.

Household expenditure rose by 0.9% as expenditure on recreation and culture grew.

Government final consumption expenditure rose by 0.8% in the second quarter of 2006 and is now 2.1% above the level seen a year earlier.

The deficit in net exports in 2006 Q2 narrowed to £9.6bn from £10.3bn in the previous quarter, due to a lower goods deficit.

To download a pdf version, click here