Surprisingly-strong UK construction output in October reduces the probability that GDP will post a fourth-quarter decline in payback for a 1.0% surge in the third quarter.

Construction output climbed by 8.3% in October to stand “only” 5.1% below its level a year earlier, compared with a 13.2% annual fall in September. The monthly numbers are not seasonally adjusted but this does not account for the October rise – output fell between September and October in 2011 and 2010.

The chart shows quarterly GDP together with a monthly estimate based on output data for services, industry and construction. The last monthly data point uses published October figures for industry and construction while assuming that services output is unchanged from September (an October number is due for release on 21 December). This generates a monthly GDP reading 0.2% above the third-quarter level.