GDP hopes dashed by statistic error
Friday 12 August 2011
Hopes that the UK's flagging economic growth would be revised upwards were dashed today following a blunder by statisticians.
The Office for National Statistics (ONS) signalled that GDP in the second quarter of 2011 could potentially be revised up to 0.3% from its previous estimate of a lacklustre 0.2%.
This was after it said that the construction industry grew by 2.3% in the quarter, which was significantly more than its previous estimate of 0.5%.
But, shortly afterwards, it realised it had made an "arithmetical error" and revised the construction figures back down to 0.5%.
Crucially, this is no longer enough to provide a noticeable boost to the economic figures.
The agency, which produces information on behalf of the Government, issued a message some four hours after the original statistical bulletin was released that said that the rise in the construction figures had been "overstated".
But for three hours it was unable to give any indication about how far the new figure would be downgraded until it had carried out more calculations.
The ONS had been under pressure in recent weeks to lift its estimates for construction because they were gloomier than other industry surveys.
The construction sector accounts for only about 6% of the UK's economy but helped to drive the UK's recovery in the first three quarters of last year as it bounced back from savage cuts to building projects made during the recession.
But the sector slipped back into decline in the final quarter of 2010 as public sector and civil engineering work was cancelled amid the austerity cuts.
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