GDP Q1 2019 preliminary estimate

GDP accelerated by 0.5% in Q1 2019 compared to the previous quarter, driven by a strong boost in manufacturing output as companies stockpiled ahead of the original Brexit deadline.

Compared with the same quarter a year earlier, GDP rose by a robust 1.8% in Q1 2019. Meanwhile, GDP per head rose by 0.4% in the quarter, improving on the 0.1% rise in Q4 2018.

However, there was a slight contraction in the monthly GDP growth rate, down 0.1% in March.

Production rose 1.4% in the first quarter, driven by the fastest growth in manufacturing output since Q3 1988, which increased by 2.2%. The most notable growth occurred in the pharmaceuticals sector, which increased by 9.4% in Q1 compared to the previous quarter, as businesses looked to build inventory ahead of Brexit.

However, Services output growth slowed to 0.3% in Q1, with anecdotal evidence pointing to delays in spending given the political uncertainty. Retail sales growth picked up by 1.6% in the period, which contrasts to the recent retail slowdown noted by other sources such as the BRC.

Growth in household consumption strengthened in Q1, but remains somewhat subdued at 0.7%, while business investment increased by 0.5% following four quarters of decline.

Elsewhere, Construction output increased by 1.0% in Q1.

Given the strong boost to GDP from preparations ahead of the original Brexit date, it is expected there will be a slight slowdown in the measure in the second quarter.

Real GDP increases by 0.5% in Quarter 1 2019: Quarter 1 (Jan to Mar) 2008 to Quarter 1 (Jan to Mar) 2019

Source: ONS

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