The UK economy grew by 0.3% in November, compared to predictions of a much weaker 0.1% growth. This increase comes on the heels of a 0.1% contraction in the month of October. It is a clear, albeit tentative, turning point for economic activity, despite the still lingering unknowns.
Manufacturing surged, and other key sectors helped power that growth. The car manufacturing industry, specifically the big three, staged an equally impressive comeback after a wrenching correction. Jaguar Land Rover (JLR) was the biggest single factor, accounting for a stunning 25.5% boost in motor vehicles output for November. Production at JLR’s UK factories came to an abrupt standstill in September thanks to a cyber-attack. This disruption has created a wave of activity before and as a result since then.
On that score, the services sector was particularly juiced up, adding more to the GDP overall than the goods-producing sector. Not all sectors fared well. Even the notoriously boom and bust construction industry recorded a 1.3% drop in output. Analysts warned that this marked the biggest quarterly decline for the industry in almost three years. Ruth Gregory pointed out that “unseasonably wet weather” was one of the major factors influencing negative construction activities on this measure this time.
Even with the construction starts coming in lower than anticipated, economic analysts remained positive about the outlook moving forward. Yael Selfin remarked that the latest growth figure demonstrated an acceleration in economic activity, particularly as the country approached the Budget announcement. Suren Thiru said of November’s numbers that it was an “unseasonably positive tone.” He even proposed they could be a sign of a more resilient economy than we thought.
Mel Stride commented on the broader economic landscape, stating, “The chancellor promised growth as her number one mission, but a failure to grip the benefits bills – and instead putting up taxes – is weighing heavily on business and the economy.” Stride’s remarks reflect concerns regarding fiscal policy’s impact on economic momentum.
News on November’s growth figure, which showed the UK economy managed to grow by 0.1%. This increase came on top of a 6.5% growth in the three months before November compared with the quarter prior. This overall positive trend may be an early sign of a long-term comeback as firms learn to adjust to new market realities.
Analysts are still hopeful though, with a note on the construction sector’s ability to bounce back come December. Gregory expects a recovery as warmer weather starts to last. This amendment would go a long way towards restoring some of the damage we incurred in November.