GDP has grown by 0.5% in the last quarter

1 November 2011

GDP has grown by  0.5 percent in the quarter to September as business services and finance showed strong increases.  This was stronger than economists expected.  However, the last quarter of 2011 has not started well with a sharp loss in manufacturing output in October. The instability in the Eurozone will further dent export growth.  Economists see most of the third quarter growth as a mere rebound from weak growth of 0.1 percent in the second quarter when an extra holiday for the royal wedding and supply-chain disruptions caused by the tsunami in Japan. Despite all the gloom and doom it is interesting to note that GDP is rising at all and house prices continue to rise, albiet at only 0.4% in the latest statistics.  There appears to be some disconnect between what the average person is  experiencing and the statistics.  House price growth is being driven by the higher priced properties.The Christmas period will be key to get an idea of how domestic demand is holding up.