With the publication of the UK National Accounts by the ONS, the estimate of UK growth in the 1st quarter was unchanged at +0.7% and the comparison with a year earlier is also the same as in the first release at +1.3%. However, quarter-on-quarter growth in business investment was revised down from +5.9% to +3.9%.
Although the estimate of GDP has not been amended (or at least not at the usual level of 1 decimal place), manufacturing output is now reported to have grown by +1.2%, compared to +0.9% in the first release; there has also been a small rise in the estimate for the construction sector (to +0.2% from zero). We won’t get the details on the improved figures for the manufacturing sector for a couple of weeks.
As there has been little change to report for the economy in what is effectively a repeat of previously announced figures based on more data being available, the rest of this note will focus on investment, which is one area where we do get some more details at this stage in the publishing cycle.
The headline about slower growth in total business investment than we first thought has already been covered in the introduction. The new figures mean that this is now +6.1% higher than in the 1st quarter of 2025, with the rolling 4-quarter trend up by +3.6%. The most important asset category for us is spending on “ICT & Other Machinery” and this has also been revised down in the National Accounts publication. Although there was a quarter-on-quarter increase of +5.0% (revised down from +8.0% in the first estimate), it is only +1.3% higher than a year ago and the 4-quarter rolling trend is up by just +0.7%.
Most importantly, the National Accounts bring us our first look at investment data by sector, so there are no revisions to explain. Total manufacturing investment was -0.4% lower than in Q4-25 and fell by -1.3% compared to a year ago (Q1-25), with the rolling 4-quarter trend down by -0.7%. Within this total, spending by the Engineering & Vehicles sector declined by -2.1% quarter-on-quarter, was -2.6% lower than a year ago but saw the 4-quarter rolling trend edge up by +0.1%.
All of the trends in this note are seasonally adjusted at constant prices.
You can download the ONS Statistical Bulletin for the National Accounts from their website at https://www.ons.gov.uk/releasecalendar (30 June) or request it from MTA.