While we wait for the next quarterly UK GDP release by the ONS (31 March), here’s my per-industry performance analysis and commentary for Q3 2022.
Looking at GVA (Gross Value Added, real-terms, seasonally adjusted) for the last three quarters (Q1 2022 to Q3 2022), and performing a second derivative analysis, the table above identifies the growth trends for each primary industry.
- Only 20% of industries were growing, and of those, half were slowing down.
- Only two industries had accelerating growth — (1) Education and (2) Public Administration and Defence.
- 30% of industries wereshrinking.
- The rest (~50%) were oscillating around zero growth.
- As already reported, the overall picture turned negative for the first quarter in a row.
For reference, the top 5 industries by GVA, in Q3 2022 were:
1) Real estate (£65.6b, stable)
2) Manufacturing (£49.9b, shrinking)
3) Financial and insurance (£43b, stable)
4) Wholesale and retail trade (£42.5b, shrinking)
5) Professional, scientific and technical activities (£40b, growing)
Overall, through the Spring and Summer of last year, trade in most industries either levelled-off or decreased. This led to a negative turn in the high-level all industries GDP measure. The analysis shows that many industries have stalled, but notably, manufacturing (the UK’s second largest industry) is shrinking faster than previously. This balancing point for many industries may yet turn into inflections, taking the UK into recession. The positive Christmas trading reports from many retailers may prove to be superficial in the context of the wider economic changes taking place.
Data from the ONS (“GDP output approach — low-level aggregates”, 22 Dec 2022 release). Analysis by me.
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