Arts, entertainment and GP visits only bright sign in flagging GDP

Jonathan Gillham, said the return of face-to-face GP visits has also been a boost but overall the economy is performing below what was predicted by Chancellor Sunak Rishi outlined in the autumn budget.

“Figures published by the ONS today suggest that GDP growth was sticky in the third quarter of 2021. Previously published data for July and August has been revised downwards and the economy grew by 0.6 per cent in September,” Mr Gillham said.

“The economy is thought to be 0.6 per cent below its pre-pandemic level in September, in August it was thought to be 0.8 per cent below.”

Mr Gillham said the data presented a “stark picture of the uneven nature of the recovery”.

“Many of the sectors that are doing well are those that are directly or indirectly benefiting from government support or are rebounding from the end of lockdown restrictions,” he said.

“For instance, third quarter growth has largely been driven by the reopening of previously ‘locked down’ sectors such as arts and entertainment, accommodation and leisure.

“There has also been the return of face to face GP appointments, which has boosted economic activity linked to healthcare, and a rush in the legal profession to complete housing transactions before the end of the stamp duty holiday.

“Construction output benefited from government stimulus spending, but is still suffering from supply chain shortages and fell by 1.5 per cent in the third quarter.

“Car sales and manufacturing are still being hit by ongoing semiconductor shortages – new car sales presented the lowest September figures since 1988.”

According to Mr Gillham, the retail sector is still struggling and many consumer-facing workers in this sector are experiencing real wage declines as opposed to online retail workers who are benefiting from higher wages. Oil and gas extraction is also experiencing a slow recovery with output 17.6 per cent lower than it was two years ago. 

“The OBR published forecasts in the October Budget that suggested 1.6 per cent growth in the third quarter, but today’s published data is below that at 1.3 per cent,” he said.