Q2 GDP growth unrevised at 0.8% but figures look ripe for revision- EY ITEM Club

15 August 2014

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  • GDP growth unrevised at 0.8%
  • But September revisions could see economic landscape rewritten

Martin Beck, senior economic adviser to the EY ITEM Club, comments on today’s Q2 GDP Data

“The Q2 figures look ripe for upward revision in light of the wide divergence between the official series and the business surveys for the manufacturing and construction sectors. An outturn of 0.9-1.0% would be more in keeping with these surveys. Recent history suggests revisions could reasonably be made over the coming year.
“Meanwhile, methodological changes introduced in the Quarterly National Accounts on 30th September could see the economic landscape rewritten entirely. The ONS has already suggested what this will mean for the period up to 2009, but the most interesting aspect will be what happens to the more recent data. The GDP data from H2 2011 onwards looks particularly odd, with output having stagnated for a prolonged period despite the economy achieving impressive rates of job creation. At the same time, the official output data has regularly come in weaker than the business surveys. With this period due to go through the Blue Book balancing process for the first time, we expect to find out that the recovery in GDP was not quite as poor as we have been led to believe.”