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Economy in Brief

UK GDP Growth Eases as Industrial Production Falls; Services Remain Vigorous
by Tom Moeller April 23, 2004

Growth in the UK economy moderated a bit in Q1 2004, according to the "Preliminary" release of GDP today. Total GDP at market prices gained 0.6%, somewhat slower than the 0.9% advance in Q4 2003.

For the industrial sector, this meant a steeper decline. That portion of the economy, which includes manufacturing, mining and energy output, has shown an increase in only one quarter since the end of 2000.

Services, by contrast, continue to grow vigorously, although not quite as fast in the first quarter as the fourth quarter's full 1.0%. However, within that broad segment, the subcategory of distribution, food and hotel services and repair services, expanded by 1.2%, its largest advance since the summer of 2002.

In this preliminary release, there is little further detail. But overall, the UK economy, driven by service sector expansion, is extending its healthy growth track, not as strongly as the late 1990s, but firmer, surely, than the recession plagued period two-to-three years ago.Note: the UK Office of National Statistics cautions that early data responses were unusually low in March, so these figures may be subject to more revision than normal.

  Q1 2004 Q4 2003 Year/Year 2003 2002 2001
GDP Chained Volume Index, 2000=100 108.1 107.4 104.9* 106.1 103.8 102.1
% Change  0.6 0.9 3.0 2.2 1.6 2.1
Industrial Production % Change -0.5 -0.1 -0.3 -0.5 -2.7 -1.6
Service Industries    % Change 0.8 1.0 2.9 2.2 2.2 2.6
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