UK economy and real estate markets finish year on a high note

Economic Highlights

– The final estimate for Q3 GDP is quarterly growth of 0.8% and annual growth to Q3 of 1.9% (revised upwards from 1.5%).

– Annual CPI fell to 2.0% in December from 2.1% the previous month.

– Total employment rose by 255,000 in August-October from May-July, with full-time employment up 155,000 and part-time employment rising by 95,000.

– Business surveys for the last quarter of 2013 are suggesting another strong expansion of output, with the Markit All-sector PMI reported at 59.5 in December. Markit believe that the survey results for the last three months are consistent with a quarterly rise in UK GDP of around 1% in Q4.

Sector Highlights

1 Industrial – UK Manufacturing PMI continued to suggest growth in December, at 57.3 (Markit/CIPS).

2 Construction – the UK Construction PMI for December also reported expansion at 62.1 (Markit/CIPS).

3 Office – the UK Services PMI came in at 58.8 in December, growth in activity was recorded for the entirety of 2013 (Markit/CIPS).

4 Retail – sales volumes in November increased by 0.3% from October, with annual growth in sales of at 2.0%. However, the September-November period saw sales volumes growth of 0% versus June-August.

5 Residential – UK house prices rose 2.7% in Q4 2013 and increased 7.1% on an annual basis. Greater London saw prices rise 4.7% over the quarter, and they are now 14.9% higher than Q4 2012 (Nationwide HPI).

6 Debt – the latest Credit Conditions Survey from the Bank of England reports that the availability of credit to the commercial real estate sector improved strongly in Q4 2013, with a balance between positive and negative responses of +14.8.

View the full S&P Economics & Real Estate Q4 2013.