LONDON (ShareCast) - Gross domestic product (GDP) in the UK decreased at an 0.3 per cent pace in the fourth quarter of 2012 when compared with the previous three months, according to the preliminary data out from the Office for National Statistics (ONS).
The consensus estimate was for a fall of 0.1%. However, the range of forecasts canvassed by Bloomberg was unusually wide, and ran from +0.1% to -0.5%.
In terms of quarterly rates of change output from the production industries fell by 1.8%, that from the service sector was estimated to have been flat and construction sector output was estimated by ONS to have increased by 0.3%. Versus a year ago production output dropped by 2.4%.
In particular, and within the first of those sectors, mining output was down by 10.2% and that from manufacturing by 1.5%. Were it not for the decline in the first of those components then economists's expectations for GDP would have been met.
As well, the decline in mining & quarrying was due in part to an extended and later than usual maintenance period at the UK's largest North Sea oil field, which reduced oil & gas extraction during the fourth quarter.
Also worth pointing out, Barclays Research estimates that the unwinding of the effect of the Olympics in the third quarter subtracted about 0.2 percentage points from fourth quarter growth.
GDP is estimated to have been flat between 2011 and 2012.
Commenting on the data, Barclays Research had this to say: "Smoothing through the choppiness using year-on-year comparisons, a clearer picture of the state of the economy emerges, and it is not a pretty sight, economists at Barclays (LSE: BARC.L - news) are saying. The construction sector has experienced a dramatic double dip (down some 11% year-on-year in the fourth quarter), almost of comparable size to that when the global financial crisis first hit."
Interestingly, they also point out how the fall in manufacturing is not a development that can be solely attributed to the euro area malaise, as UK exporters have also lost market share in non-EU markets.
"The service sector remains the sole source of growth, but even this is meek, at less than 1.5% compared with a pre-crisis average of around 4.0%," they add.
To be had in account, between 2000 and 2008 output from the production industries remained flat.