The UK avoided falling into a triple-dip recession after recording growth of 0.3% in the first quarter. This was largely due to the UK’s dominant service sector, where output increased by 0.6% from the previous quarter, and a recovery in North Sea oil and gas output, as industrial production expanded by 0.2%. The construction sector, though, was badly hit by the freezing weather and contracted 2.5%. Furthermore, compared with the first quarter of 2012, the UK’s GDP grew by 0.6%, the strongest year-on-year increase since the end of 2011. The growth was seen as an encouraging sign that the economy was healing and that progress was being made. Yet despite this growth in the first quarter, the level of GDP remains 2.6% below its peak in the first quarter of 2008.
Across the rest of the Europe, the economic misery continued as the Eurozone recession deepened, with a 0.2% drop in the first quarter. Elsewhere, France entered into its second recession in four years. The contraction of 0.2% was the same as the contraction in the final quarter of the previous year. To add to the gloom, France has record unemployment and low business and consumer confidence. The rate of unemployment is running at 10.6% and is expected to rise further. Italy’s economy contracted by 0.5% in the first quarter, the country’s seventh successive contraction. This means that Italy is now suffering its longest recession on record. Spain and the Netherlands also struggled in the first quarter, with contractions of 0.5% and 0.1% respectively. The Eurozone’s largest economy, Germany, recorded a modest growth of 0.1%, less than the predicted 0.3%. This was a consequence of the severe winter weather experienced, causing the economy to be only slowly picking up steam. Additionally, the contraction of 0.6% in the final quarter of 2012 has been revised downwards to 0.7%.
Outside of Europe, the US economy grew at an annual rate of 2.5% in the first quarter of 2013, helped by the strongest consumer spending figures in two years. According to US Commerce Department data, consumer spending, which accounts for more than two-thirds of US economic activity, increased at an annualized rate of 3.2%. However, government spending decreased by 1.4%.
This report contains quarterly statistics data for markets around the world.