Resurgent UK automotive trade drives surprisingly sturdy GDP development
Recession worries are a factor of the previous as gross home product (GDP) – the measure of the UK economy’s size – increased by 0.2 percent in the second quarter of the year.
Growth was buoyed by a 0.5 % uptick in June, when the meals and drinks sector dined out on the heatwave, following a May dip attributed to the additional financial institution vacation for the King’s coronation.
The Office for National Statistics (ONS) highlighted the automotive manufacturing trade’s contribution to the forecast-defying outcomes, because the UK appears to be like on monitor to smash final 12 months’s whole manufacturing by a minimum of 100,000.
Director of financial statistics Dan Morgan hailed a “particularly strong month” for manufacturing, which grew by 1.6 %, primarily due to the manufacturing of motor automobiles, trailers and semi-trailers.
The news comes as a aid to the Government, because it struggles to live up to its pledges to deliver down inflation, NHS ready lists and unlawful Channel crossings.
Transport tools’s contribution to manufacturing development grew by 0.91 % between the primary and second quarters of the 12 months, with pharmaceutical merchandise in a distant second place with 0.25 %.
According to the Society of Motor Manufacturers and Traders (SMMT), UK automotive manufacturing in June was 16.2 % greater than the identical month final 12 months.
After a scarcity of imported pc chips in the course of the pandemic, demand vastly outstripped the sector’s capability. Production has now recovered and producers are bearing down on the backlog of orders.
For the primary six months of the 12 months, the number of cars assembled in the UK is up 11.7 percent on 2022 in a huge post-Brexit resurgence for the industry.
The SMMT’s latest industry factsheet claims some 780,000 folks within the UK are employed within the wider automotive sector. Over 25 carmakers – together with Aston Martin, Ford, Jaguar and BMW – construct in extra of 70 completely different fashions within the nation.
Exports of vehicles account for 10 % of the UK’s whole, with 132 international locations shopping for British-made automobiles, producing £77billion of annual commerce.
In 2022 some 775,014 vehicles, 101,600 business automobiles and 1.5 million engines have been constructed within the UK. If the present tempo persists, as much as 900,000 might roll off UK manufacturing strains this 12 months.
Chancellor Jeremy Hunt mentioned: “The actions we’re taking to fight inflation are starting to take effect, which means we’re laying the strong foundations needed to grow the economy.”
The Bank of England (BoE) now predicts the UK will keep away from recession in 2023, however claimed the financial system is more likely to flatline for the following few years. Mr Hunt, nonetheless, leant on the IMF’s forecast that over the long-term UK GDP would “grow faster than Germany, France and Italy”.
Nonetheless, the financial system stays 0.2 % smaller than it was within the three months main as much as the pandemic, when lockdowns triggered the sharpest recession in UK historical past
The Shadow Chancellor, Labour’s Rachel Reeves, mentioned: “Growth in the economy is still on the floor. Thirteen years of economic mismanagement under the Conservatives has left Britain worse off and trapped in a low growth, high tax cycle.”