Manufacturing output growth is projected to be relatively strong in Q3 2017 and retail sales have also held up well, but other services sectors and particularly construction have been weaker

The projection for third quarter growth is based on PwC’s new nowcasting model, which uses machine learning techniques to produce more timely GDP estimates.

UK growth has already eased from 0.6% quarter-on-quarter in Q4 2016 to 0.3% in both the first and second quarter of 2017. This pattern is expected to continue in the third quarter of 2017 with growth again projected to be 0.3% according to PwC’s nowcasting model.

John Hawksworth, chief economist at PwC, commented:

“There is no way to predict GDP growth with perfect accuracy, but our nowcasting model, using the latest AI-based machine learning techniques, has performed well in tests using data for the past five years.

“It allows us to look at a very broad range of explanatory variables to estimate how fast the economy is growing several weeks ahead of official preliminary estimates being published by the ONS.

“The model points to continued sluggish UK growth of only around 0.3% in the third quarter. While manufacturing and retail sales growth has been relatively strong in the third quarter, this is offset by slower estimated growth in the transport and communications sector and a continuing fall in construction output.

“For 2017 as a whole, we project UK GDP growth to be 1.5%, lower than either the US or the Eurozone as the reality of Brexit starts to bite.”

Ends.

Notes to editors