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Fishy Fingers

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http://www.bbc.co.uk/blogs/thereporters/stephanieflanders/2010/12/de-constructing_the_recovery.html

Is there anything fishy about Britain's recent GDP numbers? At least one economist thinks there might be. To be precise, he thinks there might be a problem with the figures for the construction sector, which has accounted for an unusually high share of Britain's recent growth.

I hesitate to get into this, having got embroiled in a similar debate about Britain's official output data this time last year (see my post Small difference: Britain's third-quarter GDP). You'll remember, at that time, many economists thought the economy was stronger than the official numbers implied. The numbers for the third quarter were considered especially dubious. Everyone was expecting the numbers to show positive growth - instead they showed the economy continuing to shrink.

At that time, Danny Gabay, of Fathom Consulting, was one of the few economists prepared to stand up for the ONS. The preliminary GDP data weren't perfect, he said - but they were better than anything else out there. Since then, the official estimate for growth in those three months has jumped around a bit, but the official story is still that the economy shrank by 0.3% in the third quarter of 2009. The first estimate was of a decline of 0.4%.

Perhaps the numbers will be revised up sharply in a year or so, as the critics suggest. The point is that Gabay is not usually one to knock the ONS. But the construction figures for the past six months have him a bit concerned. If he's right, that would suggest the recovery has not been quite as strong as we thought. Construction has accounted for 40% of the UK's economic growth in the past two quarters, even though it accounts for just 6% of the economy.

The figures show real construction output has been growing at an annualised rate of 27% since the beginning of April. A number of explanations have been offered for this: for example, companies had to catch up on the ground lost due to bad weather in the first quarter. Some have also pointed to a flurry of public construction projects in the months leading up to the election.

But we're not just talking catch-up. I'm not sure public investment can explain it either. After all, the figures show the construction sector making up all of the ground that it lost in the recession, in just those two quarters. After the last recession it took 11 years

More at the link.

I'm shocked that any economist thinks there could be anything wrong with our GDP figures.

I must also apologise to the masked tuplip if he reads this thread, no doubt he will have been hoping for something other than economics with the thread title :)

Viva construction.

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http://www.bbc.co.uk...e_recovery.html

More at the link.

I'm shocked that any economist thinks there could be anything wrong with our GDP figures.

I must also apologise to the masked tuplip if he reads this thread, no doubt he will have been hoping for something other than economics with the thread title :)

Viva construction.

I tend to agree with Danny on this one.

The Germans had a similar upward blip in GDP due to construction, the difference was in Germany it was just a blip due to bad weather at the begining of the year and builders playing catch up was reflected in the next figures and in a paragraph in the original data release by DEStatis (the german statisitics office) saying it was going to be a one off and expect the next figures to be down.

My thoughts on what might genuinely have kept the UK construction uptick going (I have big doubts but it might be possible):

- NOT home building!

- A large number of school rebuild projects starting shortly before the cash got pulled? (some early billing going on too? esp. prof fees)

- work on cross rail started ramping up (to average ~£200m a month over the build period)

- work started ramping up on Heathrow East, the replacement for T1 and T2 at Heathrow (another T5 sized project)

- The olympics construction programe and 4 other major transport related projects in London at full speed

- Several industrial projects in the hundreds of millions each (am involved in a similar one to these some of these that will start next year)

- Wind turbine installation rate increasing (esp. off-shore)

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I must also apologise to the masked tuplip if he reads this thread, no doubt he will have been hoping for something other than economics with the thread title :)

Viva construction.

I have OCD - the mere thought of fishy fingers is enough to have meet reaching for a big spray bottle of detol.

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I tend to agree with Danny on this one.

The Germans had a similar upward blip in GDP due to construction, the difference was in Germany it was just a blip due to bad weather at the begining of the year and builders playing catch up was reflected in the next figures and in a paragraph in the original data release by DEStatis (the german statisitics office) saying it was going to be a one off and expect the next figures to be down.

My thoughts on what might genuinely have kept the UK construction uptick going (I have big doubts but it might be possible):

- NOT home building!

- A large number of school rebuild projects starting shortly before the cash got pulled? (some early billing going on too? esp. prof fees)

- work on cross rail started ramping up (to average ~£200m a month over the build period)

- work started ramping up on Heathrow East, the replacement for T1 and T2 at Heathrow (another T5 sized project)

- The olympics construction programe and 4 other major transport related projects in London at full speed

- Several industrial projects in the hundreds of millions each (am involved in a similar one to these some of these that will start next year)

- Wind turbine installation rate increasing (esp. off-shore)

Without figures for the above it's hard to tell whether they would have such a big impact, although it seems quite plausible.

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  • 284 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?


      • down 5% +
      • down 2.5%
      • Even
      • up 2.5%
      • up 5%



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