"With the Euro Area still in contraction and emerging market growth slowing, domestic consumption, aided by the Bank of England's long-term commitment to low interest rates, is likely to remain the primary source of near-term growth"
- Conference Board Europe Economist Brian Schaitkin
A slump in Britain's construction sector has ended, positively influencing weak output figures for the country. On Friday the Office for National Statistics said that the U.K. construction output, which accounts around 7% of overall gross domestic product, stopped falling between April and May, as the output measures on a seasonally adjusted basis remained flat. At the same time, on an annual basis output fell 4.8%. In April construction expanded 4.6% from the prior month and declined 2.2% compared with the same period a year earlier. Construction sector was a serious drag on growth in the first quarter, when economic output jumped 0.3%, while output in construction fell 1.8%. The latest estimates are showing that GDP is likely to increase 0.6% in the second quarter, citing strong performance of the private service sector, as the main factor for acceleration. The Q2 GDP data will be unveiled on July 25.
Also Friday data from Conference Board showed that a leading indicator of the British economy gained momentum further in May, reflecting the on-going sustainable recovery. A gauge designed to predict the direction of the economy, rose 0.4% to 105 in May, after gaining 0.2% a month earlier. In addition to that five of the seven components that constitute the index made a positive contributions.
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