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The UK Recorded Zero Growth at End of 2019

The British economy ended 2019 on a weak note, as no growth was seen in the last quarter of the year. The figures from the Office for National Statistics (ONS) showed a slowing down in several different industries.

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The country’s manufacturing sector suffered its third contraction in consecutive quarters. The car industry was also noteworthy in terms of its poor contribution to the national economy.

Even the traditionally strong services sector slowed down towards the end of the year, with the election possibly being the cause of this.

The zero growth in GDP was marginally better than had been expected. Some experts had predicted a drop of 0.1% in the final quarter of 2019. With international debt collection enquiries rising, it is clear that the global slowdown has had an effect, though.

The service industry numbers are always crucial, as it makes up more than three-quarters of the entire British economy. In the last quarter of 2019, this sector grew but only by a tiny 0.1%.

Figures from the construction industry were a little better, as 0.5% growth was reported. Yet, a dramatic fall of 1.1% in manufacturing wiped out these increases. The drop in manufacturing has largely been put down to a number of car factories stopping work in November due to uncertainty over Brexit.

2020 Is Looking More Positive

The figures supplied by the ONS revealed that the UK economy grew by 1.4% over 2019 as a whole. This was slightly better than 1.3% growth rate that was seen the previous year.

Looking ahead, it appears that 2020 has started off more strongly than 2019 ended. Analysts will be keen to get their hands on some solid figures for the first quarter, to see whether this is actually the case.

This suggestion is backed up by the fact that December witnessed 0.3% growth. This was an improvement on the contraction noted in November’s numbers. 

Surveys at the start of 2020 have revealed that confidence is up across the country. Many businesses are reported to be keen to invest more and increase their staff numbers. It isn’t yet known if this is simply a post-election bounce or whether it will continue throughout the year.

The Trade Deficit Issue

Another result seen from the final quarter of last year was a widening trade deficit. This number was sitting at £4 billion from the July to September period. Yet, in the last three months of 2019 it grew to £6.5 billion. Overall in 2019, the combined trade deficit for goods and service was £0.5 billion lower than the year before, at £29.3 billion.

This number shows by how much the country’s imports are greater than its exports. In this case, the widening gap was put down to a lower surplus in terms of services. 

On the other hand, the goods trade deficit improved. The main factor behind this was the drop of £2.2 billion in the import of machinery and transport equipment. It has been suggested that this was down to orders being brought forward due to the original October deadline for Brexit.