The U.K., once one of the fastest growing economies among the G-7 countries, has posted one of the slowest growths in the first quarter of 2018. The U.K. economy is estimated to have grown 0.1 percent in the first quarter of this year, its slowest rate since 2012, the Office of National Statistics (ONS) said on Friday.
The U.K. gross domestic product (GDP) was estimated to have climbed 0.1 percent in the first quarter of the year. U.K. growth saw a 0.4 percent growth in the fourth quarter of 2017. GDP growth was the slowest since the fourth quarter of 2012, with construction being the largest downward pull on GDP, falling by 3.3 percent, according to ONS data.
“Our initial estimate shows the U.K. economy growing at its slowest pace in more than five years with weaker manufacturing growth, subdued consumer-facing industries, and construction output falling significantly,” said Rob Kent-Smith, head of national accounts at the ONS.
A decline in the performance trend of the U.K. economy was also last week. The U.K.’s car production declined in March, with demand falling by 13.3 percent year-on-year, according to figures released Monday by the Society of Motor Manufacturers and Traders (SMMT). In British factories, 147,471 cars were built as the domestic market continues to slow, with demand falling by 17.7 percent.
Exports also fell by 11.9 percent due to fluctuations in demand in some global markets. In addition, some manufacturers were impacted by the adverse March weather conditions, which negatively affected production.
Overall output in the first quarter of 2018 decreased 6.3 percent, with 440,426 cars leaving production lines in total this year. Almost 80 percent of these were exported, and while demand from overseas customers fell by 4 percent in the first quarter, this was dwarfed by the 14.1 percent decline in manufacturing for the U.K. market.
According to SMMT, the U.K.’s vehicle and component manufacturers are important contributors to the economy and are responsible for 13 percent of all the country’s goods exports. In other words, for every pound sterling generated by the industry, three pounds are delivered to the economy via adjacent sectors such as logistics, retail finance, with SMMT calculations putting the total economic impact at £219 billion.
“A double-digit decline in car manufacturing for both home and overseas markets is of considerable concern. Following recent announcements on jobs cutbacks in the sector, it’s vitally important that the industry and consumers receive greater certainty, both about future policies towards diesel and other low emission technologies, and our post-Brexit trading relationships and customs arrangements.” Mike Hawes, SMMT chief executive said regarding the recent data.
One way or another, sluggish economic growth, the declining value of the currency, low consumer confidence and household spending continues to put pressure on the country’s economic outlook for 2018.