What Exactly Are The UK’s Economic Strengths?

Since the Brexit referendum vote, the performance of the UK economy has come under increasing scrutiny, as economists and political think tanks attempt to see into the future and predict what the post-brexit landscape looks like.

A look at the Financial Times UK statistics analysis shows that GDP grew 0.5% in the last quarter of 2017, reflecting the fact that manufacturing growth picked up, services remained steady and construction slowed down. Consequently, the economy continued to grow, up 9.7% compared with its pre-downturn peak, reflecting an annual change of 2.3%.

Services sector

The services sector is the real powerhouse of the economy, accounting for almost 80% of GDP, and it remains one of the few parts of the economy to have surpassed its pre-2008 peak. The sector continues to grow quarter on quarter at a rate of 0.4%.

Construction accounts for around 6% of the economy and was badly hit by the recession. The government is keen, however, to kick start a new house building programme. Although post-2008, the industry contracted by 17% and remains below its pre-downturn peak, there are promising signs, although the data is volatile and difficult to read.

The good news is that last December showed a month-on-month increase of 1.6%. This is encouraging for companies in the supply chain, offering products like metal bonding adhesive, as found at http://www.ct1ltd.com/product-applications/metal-to-metal-adhesive/.

Hidden strengths

An analysis of the UK also reveals some hidden strengths. The manufacturing sector has shrunk dramatically, and in 1948, it contributed 36% of GDP compared with just 10% today. New technology has recently made the sector more productive, as it focuses on high-quality goods, enabling it to outperform gloomy predictions on growth. Aerospace, high-tech goods and car manufacturing have led the way in a slow recovery.

UK professional services are also a success story. Output in business and professional services has been growing at around 5% per annum, selling around the world.

The UK’s higher education institutions are another success, attracting students from around the world. Fees for overseas students make a big impact on university finances, and the students spending power impacts on local economies.

Concentrating on these areas of success could mean the UK economy will continue to bounce back from the depths of the recession and face the post-Brexit period with optimism.

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