Construction sector boosts economic growth rate

Author: By Sean O’Grady

Improvements in the construction sector and in industrial production nudged the national income figures higher. In line with relatively strong figures on retail sales released by the CBI yesterday, the ONS also revised its estimates of household spending upwards, with evidence that the “destocking” that has hit the economy especially hard is now wearing off.

However, investment spending was marked lower. Many economists predict that this will hit the long-term productive potential of the economy.

There was less encouraging news on the contribution that trade may make to the recovery. The current account deficit widened sharply over the second quarter, to £11.4bn, higher than City estimates. This was mostly due to a drop in investment income, reflecting depressed market conditions and returns earlier this year.

Some economists said that such volatile elements did not necessarily mean a worsening trend.

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