UK sees beginning of recovery in construction

The recession in the UK was not as deep as previously feared between April and June, official figures confirmed today.

UK output shrank by 0.6% during the quarter - the second upward revision to official figures since July - the Office for National Statistics (ONS) said.

A better-than-expected performance from the construction industry was behind the latest revision, but the economy has shrunk 5.5% since the second quarter of 2008.

Despite the upward revision to the second-quarter figures, they nonetheless showed output declining at a time when other major economies such as France and Germany were pulling out of recession.

The ONS also revised down its estimates for the first three months of this year to show a deeper 2.5% decline at the worst point of the slump - confirming it as the worst since 1958.

Official growth estimates for 2008 as a whole were meanwhile lowered from 0.7% to 0.6%.

There was also evidence of families rebuilding their finances in the recession with the household savings ratio hitting 5.6% - the highest for more than five years.

Saving rates have been steadily increasing since the onset of recession - after briefing turning negative for the first time at the beginning of 2008 - as households build up a buffer against the threat of unemployment.

But the measure still has some way to go to reach the double-digit saving rates common in the 1990s following the last recession.

Capital Economics' Vicky Redwood said: "At least the consumer sector appears to be on a firmer footing ... But (the saving rate) is still well below its long-run average and we think the consumer adjustment has further to go."

She added the figures highlighted the "fragility" of the recovery, with overall improvement in output during the second quarter of this year "marginal compared to the huge amount of spare capacity building up".

More in this Section

Covid-19: Ryanair to take €300m hit, but still in profitCovid-19: Ryanair to take €300m hit, but still in profit

Dire US jobs numbers drive further selloff for global markets amid Covid-19 falloutDire US jobs numbers drive further selloff for global markets amid Covid-19 fallout

Pressure builds on insurer FBD over dividend payout amid Covid-19 crisisPressure builds on insurer FBD over dividend payout amid Covid-19 crisis

Penneys owner cuts executive salariesPenneys owner cuts executive salaries


Cork architect Loïc Dehaye tells Eve Kelliher how he created his dream home from a blank canvas.'It was like this house was waiting for us': Cork architect talks creating his dream home

Keeping to a routine can be difficult for people in quarantine.Life on the inside: 10 ways to start your day right in lockdown

Who needs a gym when you can look in your kitchen cupboards for equipment instead?Don’t have weights for working out? These household objects will do the trick

There are some seriously spectacular shots.Discover America from the air thanks to this breathtaking aerial footage

More From The Irish Examiner