GDP figures: ONS's latest data suggests economic growth is slowing

http://www.theguardian.com/business/2015/may/28/gdp-figures-economic-growth-slowing-analysis

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The first thing to remark about this morning’s GDP figure from the Office for National Statistics – its second take on economic growth in the first three months of the year – is that it has not changed. Or in the words of one analyst, it remains “disappointingly unrevised” from the initial 0.3% estimate.

When that weak number was announced in the thick of the general election campaign, City experts said it was too pessimistic and would be wiped away when the ONS had had more time to collect data.

That has not happened, which should make the optimists start to wonder whether – as in the US, where Wall Street has been similarly dismissive of a quarter’s weak data – a slowdown is under way.

The details of the ONS analysis should give pause for thought, too. First, the rebalancing George Osborne hoped to see, from services-led growth towards a “march of the makers”, in which manufacturing and exports would make up a bigger share of the economy, has so far failed to materialise. Manufacturing and construction output remain well below their pre-recession peak; the service sector is booming.

Second, it’s worth remembering that this recovery has been pitifully slow, relative to other post-recession periods. The Resolution Foundation thinktank used the latest data to produce an updated version of its “bouncebackability” chart, which underlines the fact that this has been the slowest recovery anyone can remember.

And once the growth in the population due to continued significant net immigration is taken into account, the record on GDP per capita looks even worse. The electorate may not have been impressed by Ed Miliband’s warnings about a “cost of living crisis”; but the UK’s GDP per head, often regarded as a reasonable proxy for a country’s general level of prosperity, remains significantly below its 2008 level.

Wednesday’s Queen’s speech contained a slew of measures aimed at kickstarting economic growth – or shifting it into another gear, as the Treasury’s latest favourite metaphor has it. Much will depend on the state of the European economies, still our major trading partners, but the latest data suggests the engine may be spluttering.