Monday, 8 April 2013

Will the UK Escape the Triple Dip?

The construction PMI has remained below the 50 no-change point for the past five months.

The manufacturing PMI has mirrored this contraction in the past couple of months.

Has the service sector demonstrated enough growth to save us from a triple dip recession?

Based on the PMI results, it's looking like a yes... but only just!

However, the PMI is an indicator of output, compiled from monthly surveys of private sector companies; We wont know if we've escaped the dessert menu sounding "triple dip" until April 25th, when the ONS release its first estimate for GPD in Q1. This figure is formulated using output, expenditure and income measures - so is much more precise.

The official classification of a economic recession requires GDP to be in the negative for two consecutive months, therefore if Q1 2013 is in the red, we'll be in our third recession in the last 5 years and to put that into context... We've been in a recession a total of 8 times since.

Useful Links:
UK GDP full data.