Monthly real gross domestic product (GDP) grew by 0.1% in February 2024, following growth of 0.3% in January 2024 (revised up from 0.2%), figures from the Office for National Statistics. (ONS) have revealed.
Real gross domestic product grew by 0.2% in the three months to February, compared with the three months to November 2023.
Services output grew by 0.1% throughout the month, following growth of 0.3% in January, and has grown by 0.2% in the three months to February.
Production saw a growth of 1.1% and was the largest contributor to the growth in GDP in the month, following a fall of 0.3% in January.
Construction output fell by 1.9% following an unrevised growth of 1.1% in January.
The data found that construction output fell by 1.0% in the three months to February 2024.
Reaction:
Nicholas Hyett, investment analyst at Wealth Club:
“Higher than expected inflation in the US rattled markets yesterday.
“Positive UK GDP growth in February, coming together with an upgrade to the January estimate, will do nothing to reassure markets that interest rate cuts are locked in for the first half of this year.
“Having said that, areas of the economy that are dependent on discretionary spending do look kind of soggy.
“Accommodation and food and drink services both contracted in February and the construction sector is in the doldrums (with eight out of nine sectors seeing a decrease month-on-month).
“There are suggestions wet weather may have played a part here, but an interest rate cut could be quite helpful to those areas of the economy nonetheless.”
Daniel Norman, CEO of APRAO:
“February’s construction once again softened after showing slight growth in the first month of the year.
“There was, of course, hope that January’s upward trend would continue, but it’s not a surprise that the numbers have once again taken a drop, albeit a slight one.
While February’s poor weather and heavy rainfall will be contributors to this decline, it also suggests that construction firms and housebuilders continue to hold their cards to their chest as the economic hangover of 2023 is yet to fully clear.
“But with the nation’s economic horizons starting to brighten up, interest rates having already peaked, and a strong need for more new homes, we expect to see construction pick up sooner rather than later.”
Mike Randall, CEO at Simply Asset Finance:
“Some further positive GDP growth could set hopeful prospects for the year, as the economy bounces back from the lows seen in 2023.
“And with further financial incentives such as the Growth Guarantee scheme announced for small businesses in the Spring Budget, positivity could return to the market.
“Nevertheless, it’s crucial to remember the businesses supporting the backbone of our economy, and national infrastructure.
“While inflation has fallen significantly in 2024, interest rates are still at an all-time-high, which can hamper access to vital funds for many firms across the country.
“If we are to support growth beyond the OBR’s 0.8% GDP forecast and bring real momentum back into the UK economy, we urge the Government to consider further fiscal measures that give certainty and support to the SMEs enabling our economy.”
