Revised figures for UK gross domestic product (GDP) were released late last week and showed that the economy shrank slightly more than the initial estimate suggested. The Office for National Statistics (ONS) had originally released figures suggesting the economy had contracted by 0.5 per cent in the fourth quarter of 2010 but this has now been revised to a contraction of 0.6 per cent. This, said the ONS, compares to a contraction of 2.1 per cent in the same quarter of 2009.

The contraction was largely blamed on the effects of the bad weather in November and December when they were first released and this still seems to be one of the main explanation of events. The main factors contributing to the revised figures was production industries which were originally estimated to have grown by 0.9 per cent but have now been revised down to 0.7 per cent. Construction fell but not by as much as previously quoted; the revised figures putting construction output down by 2.5 per cent compared to the 3.3 per cent quoted in the first data release.

Activity in the service sector was also revised down from a fall of 0.5 per cent to a contraction of 0.7 per cent. The main reasons for the fall in this sector were due to a fall in business services of 1.1 per cent and a fall in transport, storage and communications services of 1.4 per cent. Government final consumption expenditure rose by 0.7 per cent in the quarter and gross domestic fixed capital formation (investment) fell by 2.5 per cent. The ONS did point out, however, that whilst down in the fourth quarter of 2010, investment is 5.6 per cent higher than the equivalent period of 2009, some measure at least of a recovery in the economy which might be spluttering but is still expected to be positive over the year as a whole.