UK industrial and construction output numbers for April released this week cast doubt on the widespread view that economic growth has slowed. This view rests mainly on weaker business surveys that may have been “contaminated” by Brexit uncertainty.

Industrial output surged by 2.0% in April while construction output rebounded by 2.5% after a 3.7% March decline. The two sectors account for 21% of gross value added (GVA). April output for the dominant services sector will be released on 30 June. If it were to rise by 0.2%, in line with the average monthly increase over the last 12 months, the monthly GDP proxy tracked here would grow by 0.6%, to stand 0.4% above its first-quarter level – see first chart.


GDP growth in the second quarter, that is, would be on course to match or exceed a 0.4% first-quarter gain. Most economists, by contrast, expect GDP to slow, or even stagnate, in the current quarter.

Retail turnover is a component of services output and has already been reported to have risen by 1.3% in April, implying a contribution of +0.1 of a percentage point to the monthly output change.

The strength of these April activity series after relative weakness in March may partly reflect seasonal adjustment problems due to the early timing of Easter this year.

Previous posts (e.g. here) expressed optimism about UK economic prospects based partly on solid money / credit trends. Six-month growth of real (i.e. consumer-price-deflated) narrow money, as measured by non-financial M1*, was stable in April at its highest level since December 2013 – second chart.


*Notes / coin and sterling sight deposits of households and private non-financial corporations.