Economic Growth in Uk

Economic Growth

Is a positive change in level of production of goods and services by a country over a certain period of time?

The Gross Domestic product (GDP) is an integral part of the UK national accounts and provides measures of the total economic activity in a region. The GDP is often referred to as one of the main ‘summary indicators' of economic activity and reference Economic to ‘growth in the economy'

In the UK three different theoretical approaches are used in the estimation of one GDP estimate.

GDP from the output or production approach - GDP (O) measures the sum of the value added created through the production of goods and services within the economy (our production or output as an economy). This approach provides the first estimate of GDP and can be used to show how much different industries (for example, agriculture) contribute within the economy.

GDP from the income approach - GDP (I) measures the total income generated by the production of goods and services within the economy. The figures provided breakdown this income into, for example, income earned by companies (corporations), employees and the self-employed.

GDP from the expenditure approach - GDP (E) measures the total expenditures on all finished goods and services produced within the economy (office of national statistics , 2011)

The graph bellow shows the GDP and the Labour Market, 2011 Q2

Contributions to GDP growth

i. Q1 and Q2, 2011

The second estimate of GDP growth for Q2, based on the output measure, remains at 0.2%. Within

The estimate,

Growth in the service sector remained at 0.5 per cent in the second estimate of Q2 GDP,

Unchanged from the first estimate.

In the production sector, growth has been revised down from -1.4 per cent in the first estimate

To -1.6 per cent in the second. The main component, manufacturing, contracted in Q2 by 0.5 per

Cent which is a downward revision to manufacturing growth between the first estimate and the

Second estimate of 0.2 percentage points.

The performance in the construction industry was one of two halves in 2011 Q2, with ‘new work'

growing by 2.4% compared to repair and maintenance work contracting by 3.2%, with the aggregate

industry level growth remaining unrevised at 0.5 per cent. (office of