RIP for double dip?

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

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  • rate this
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    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
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    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
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    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.

 

Comments 5 of 104

 

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