RIP for double dip?

 
Builders working on a new house

There has been encouraging news on the state of the UK recovery in the past few days, suggesting the economy may have gained some momentum in the last couple of months.

You might also be interested to know that the Office for National Statistics (ONS) has moved a step closer to revising away last year's double dip recession.

Today's trade figures for March show UK exports rising, and the gap between our exports and our imports narrowed somewhat, though we should remember it is still massive by historical standards.

Exports to non-European markets grew 10% on the previous month, with exports to the US up by more than 20%, though exports to EU countries were broadly flat.

On the basis of these figures, some in the city think our net trade with the rest of the world may turn out to have made a positive contribution to Britain's growth in the first three months of the year.

Others are more cautious. But if it didn't actively detract from growth in the first quarter, that itself would be a big improvement on 2012.

We have also had the latest unofficial (but reputable) estimate of monthly growth from the National Institute for Economic Social Research (NIESR).

It reckons that national output grew by 0.8% in the three months to the end of April, up from growth of 0.3% in the three months to the end of March.

As NIESR economists are quick to point out, that 0.8% figure is being pushed up by the fact that January was so weak.

They don't think the underlying growth rate is anything like that fast, which is why they are yet to revise up their forecast of 0.9% growth for 2013 overall.

Still, it looks like we won't be talking about the possibility of a "triple dip" recession for a while - and not just because it now looks even more likely that the second of those dips is going to be revised away.

I flagged this up a while ago.

You'll remember that the second dip formally started with a fall in GDP in the last three months 2011 which has been gradually been revised into a decline of just 0.1%. The fall in output in the first three months of 2012 is also now 0.1%, and that in itself is a rounding up of the underlying number.

As I said in that earlier blog, the ONS only needed to revise that figure for the first quarter of 2012 by a few hundredths of a percentage point for the double dip recession to disappear.

With today's revised construction output data, the statisticians seem now to have reason to do just that.

The release shows construction output in the first quarter of 2012 has been revised up by 0.4%.

Even though construction accounts for less than 7% of national output, that change would be enough to turn minus 0.1% into 0.0% in the GDP figures for the first quarter of 2012.

The ONS says it is also planning to make further small adjustments to the data - to adjust for what they have decided is extra "seasonality" in the construction numbers.

That could actually make the GDP figure for the start of 2012 very slightly positive.

Or that's the theory - though, of course, there might be other changes to the data in the next month or so, which change the picture again.

We won't know for sure until the "Blue Book" national accounts figures come out on June 27th. But right now it looks as though the UK has not formally been in recession since the summer of 2009.

 
Stephanie Flanders Article written by Stephanie Flanders Stephanie Flanders Former economics editor

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  • rate this
    0

    Comment number 104.

    The Federal Reserve System (also known as the Federal Reserve, and informally as the Fed) is the central banking system of the United States. It was created on December 23, 1913, with the enactment of the Federal Reserve Act, largely in response to a series of financial panics, particularly a severe panic in 1907.

  • rate this
    0

    Comment number 103.

    My local Accountant of the Year tells me the recession is well over.Those who lost in it are still licking their wounds and have not yet recovered.
    But those doing well are silently counting their cash piles and hoping this now well-established recovery lasts as long as possible.
    But if we are recovering, it is despite the Torydems, not because of them.
    They simply could not keep us down forever.

  • rate this
    0

    Comment number 102.

    99

    Since when were Labour ever `socialists'?

    The Labour Party is comprised of well-rewarded middle class employees of the state apparat supported by the distressed poor trapped hopelessly in welfare due to the manifest failures of that largely useless state apparat.

    Socialism has been defined as a free and equal society in which there is no exploitation.

  • rate this
    0

    Comment number 101.

    This merely emphasises what many of us have been saying. The issue is not the dips, but the original crisis that caused the slump. Nothing has been done to address it and so nothing has changed. We just bump along the bottom.

    There is no button marked `growth' on the Chancellor's desk, no magic money tree, busted banks, a bloated state and struggling industry.

    It is a miracle it is not worse.

  • rate this
    +1

    Comment number 100.

    Tim

    Apart from a slightly useless and a slightly dim leader there's no difference at all between the conservatives and labour. In fact aren't the conservatives actually borrowing MORE if you take into account dodgy PO pension fund raids?

    3/10 must try harder.

  • rate this
    0

    Comment number 99.

    Conservatives always knew that making public spending sensible would take a while. Socialists are terrified that, if these figures are correct, it may be longer before they are allowed to control the credit card again.

  • rate this
    0

    Comment number 98.

    97. AlMiles ~ it has much todo with the amount of foreign rubbish that people seem happy to indulge themselves in causing export of jobs, lack of investment and flight of capital from our shores. The UK are a nation of shopping and buying idiots without rival. We are schmucks.

  • rate this
    0

    Comment number 97.

    So when Vince Cable states that Labour destroyed the economy, he's lying? After all, they left it in strong growth at the 2010 election. What is his excuse for us not being at 2.5% growth now, as Osborne predicted 2 years ago?

  • rate this
    +1

    Comment number 96.

    I'm so glad the dire economic circumstances I've been living with for the last few years didn't really happen. Very reassuring.

  • rate this
    0

    Comment number 95.

    85.onward-ho
    Bring back Labour who understand Economics

    Labour economic policy is almost identical to Tory & Lib Dem & UKIP
    you have to go to Green or Respect before you start getting any major difference

  • rate this
    +1

    Comment number 94.

    The biggest problem today is the non stop stream of economic statistics, which really serve no useful purpose. It matter not whether house prices have risen or fallen, whether growth was -0.1 or +0.1%, and whether retail says are up or down.

    Life and business goes on whatever nonsense is spouted by these statistics, and without them we can just get on with our jobs!

  • rate this
    0

    Comment number 93.

    I would not normally do such but there appears to be confirmation here http://investinginchinesestocks.blogspot.co.uk/2013/05/yuan-arbitrage-replaces-trade-as.html of china HK trade discrepencies amongst a sales pitch in FX trading. I'm sure someone if not many people may take an interest. Those, of course, who do not know of such things.

  • rate this
    0

    Comment number 92.

    When will the tanks be rolling into The City?

    http://www.bbc.co.uk/news/business-22476233


    Answer:

    Never.

  • rate this
    0

    Comment number 91.

    Given that we're often told the "formal definition" of a recession was dreamt up as part of the 1968 US Presidential election campaign, the guy who dreamt it up is quite possibly still alive.

    It would be interesting to hear his views on the fact that people are still obsessing over his creation a half-century later, on every continent.

  • rate this
    +4

    Comment number 90.

    The opposite of austerity (or living within your means) is borrowing and debt (living outside your means).

    Only a fool would propose that the UK went back to the latter.

    Growth based on cheap credit fuelled consumerism isn't real growth.

    We need to consume less and produce more.

  • rate this
    -2

    Comment number 89.

    If Osborne is to be able to relax his austerity programme as will be required by outside pressure, then he's got to be able to do so without losing face.

    The figures will have to show growth. Any statistician worth their salt could achieve some sort of growth for him.

    Anyway France has just had 2 public holidays and lots of people seem to have made a week of it. That's their growth stuffed.

  • rate this
    0

    Comment number 88.

    "The economy has been regaining momentum since late 2011. This trend is obscured in official GDP statistics by various special factors – North Sea weakness, an extra bank holiday and the Olympics. Adjusting for their effects, the quarterly change in output has risen from -0.1% in the fourth quarter of 2011 to 0.0%, 0.1%, 0.2%, 0.2% and 0.3% in the first quarter of 2013 – a clear upward trend."

  • rate this
    +1

    Comment number 87.

    86.Muppet Master - ".....same labour whos understanding of economics is that you can tax, borrow and spend as much as you like for as long as you like........................You do mean THAT labour, don't you?"


    No, they meant this Labour:


    http://www.huffingtonpost.co.uk/ramesh-patel/growth-cameron-austerity_b_2007552.html

  • rate this
    -1

    Comment number 86.

    85.onward-ho
    "Bring back Labour who understand Economics..."

    You mean the same labour whos understanding of economics is that you can tax, borrow and spend as much as you like for as long as you like, and when it has to be paid back don't worry about it, somebody else will sort it out and take the blame for you

    You do mean THAT labour, don't you?

  • rate this
    -2

    Comment number 85.

    Just sold a flat at £40k over asking price, to buyer from theFar East who has only viewed online.sounds good but only 2% over 2006 purchase price.But a start anyway.
    Bring back Labour who understand Economics unlike these dumb first principle extrapolators we have in power ruining our Economy by only letting it stay in first gear.
    Interestingly a merchant banker says things are booming!

 

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