The Office for National Statistics (ONS) has this morning reported that the UK economy grew by 15.5% in the third quarter of the year, which is the largest quarterly growth ever recorded. This growth comes as a small but welcome recovery from the record-breaking 19.8% decline seen in June, especially as this improvement was seen in all sectors of the economy, including services, manufacturing and construction.
UK gross domestic product (GDP) is estimated to have grown by a record 15.5% in Quarter 3 (July to Sept) 2020, as lockdown measures were eased. Though this reflects some recovery of activity following the record contraction in Quarter 2 (Apr to June) 2020, the level of GDP in the UK is still 9.7% below where it was at the end of 2019.
When compared with the same quarter a year ago, the UK economy fell by 9.6%.
While output in the services, production and construction sectors increased by record amounts in Quarter 3 2020, the level of output remains below Quarter 4 (Oct to Dec 2019) levels, before the impact of the coronavirus (COVID-19) pandemic was seen. However, with a second lockdown in place, it is important to note that this growth may once again see the economy suffer from the closure of non-essential businesses.
Brian Berry, Chief Executive of the FMB, said: “The Government needs to seize the opportunity to set out a new strategy to upgrade our existing homes to make them greener and more energy efficient. Short-term schemes only help in part. What is needed is a long-term strategy. The Chancellor should use the Spending Review to announce an extension to the Green Homes Grant scheme, to give businesses confidence to take part, and accelerate growth in the construction sector. That means bringing forward the full £9.2 billion pledged in the manifesto, so that the industry has a clear pipeline of work.”
Powered Now, a mobile-based billing, invoicing and quotation application which specialises in trades, has a client base of over 1500 SMEs, and has seen first hand the impact COVID-19 has had on businesses within trade sectors.
Ben Dyer, CEO of Powered Now, said: “The economic recovery we have seen in this morning’s announcement is indeed welcome, but of course with much of Britain in a state of national lockdown over the month of November, this month and the subsequent winter season are of course going to present yet more challenges.
“It is disappointing that the supply of building materials remains a constraint and it could be argued that suppliers over-reacted to the first lockdown, creating this situation. The reduction in the rate of PMI growth seen last week could be the first signs of a drop in demand from lockdown related macroeconomic damage. Let’s hope that isn’t the case.”