LONDON (Reuters) - Britain’s trade deficit narrowed more than expected in September, and third-quarter construction output fell by a similar amount to earlier estimates, reducing the chance of a downward revision to quarterly GDP.
Britain’s economy bounced out of recession in the third quarter, growing by 1 percent, but weak economic data since then had made some analysts concerned that this growth figure could be revised lower.
However, official data released on Friday showed Britain’s goods trade deficit shrank to 8.4 billion pounds in September from 10.0 billion pounds in August, and the quarterly trade gap shrank as well. Economists had forecast a September goods deficit of 8.9 billion pounds.
The overall trade deficit, which includes the more buoyant trade in services, also narrowed to 2.7 billion pounds, down from 4.3 billion in August, the Office for National Statistics said.
Britain’s economy exited recession in the third quarter. But manufacturing surveys have shown renewed weakness with companies reporting a drop in export orders in October as the euro zone, Britain’s largest export market, is teetering on the brink of recession.
Friday’s figures showed exports to the European Union in the third quarter were 2.5 percent lower than a year earlier, while exports to elsewhere in the world were 13.3 percent higher.
Falling construction output was the main drag on GDP this year, and Friday’s figures reinforced this trend, with output falling to its lowest level since 1999 in the third quarter. However, the 2.6 percent decline is in line with the 2.5 percent fall factored into third-quarter GDP estimates.
Reporting by Sven Egenter and David Milliken