May's GDP decreased by 0.1% after a 0.3% contraction in April, signaling a potential contraction for the second quarter. This unsatisfactory economic data complicates budget planning. The Office for National Statistics revised March’s growth to 0.4%, but experts predict a downturn unless June shows significant improvement. The decline in GDP is attributed to a 0.9% drop in industrial production, mainly due to a 1% fall in manufacturing, with vehicle manufacturing experiencing a sharp 3.7% decline. A slight 0.1% increase in services output provided minor offsetting support.
The 0.1% fall in May is marginal, but it follows a 0.3% contraction in April, suggesting the economy may have been going backwards in the second quarter.
May's downbeat outturn means a contraction in GDP across the second quarter looks a racing certainty, underscoring the fragility of the economic recovery.
The ONS attributes May's contraction to a sharp fall in industrial production, particularly driven by a 1% drop in manufacturing, and a 3.7% decline in vehicle manufacturing.
A modest 0.1% increase in services output partially offset the industrial decline, but overall economic confidence remains uncertain amidst a tough global environment.
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