Fresh evidence of the impact of global trade wars on the eurozone has emerged with official figures revealing growth in the 19-nation single currency bloc was 0.2% in the three months to September.
Data from the EU’s statistical agency, Eurostat, showed activity expanded by 0.2% in the latest quarter – unchanged on the three months to June.
Eurozone growth was slightly stronger than financial markets had been expecting, suggesting Germany, Europe’s biggest economy, narrowly avoided slipping into recession in the third quarter.
Gross domestic product (GDP) measures the total value of activity in the economy over a given period of time.
Put simply, if GDP is up on the previous three months, the economy is growing; if it is down, it is contracting. Two or more consecutive quarters of contraction are considered to be a recession.
GDP is the sum of all goods and services produced in the economy, including the service sector, manufacturing, construction, energy, agriculture and government. Several key activities are not counted, such as unpaid work in the home.
The ONS uses three measures that should, in theory, add up to the same number.
• The value of all goods and services produced – known as the output or production measure.
• The value of the income generated from company profits and wages – known as the income measure.
• The value of goods and services purchased by households, government, business (in terms of investment in machinery and buildings) and from overseas – known as the expenditure measure.
Economists are concerned with the real rate of change of GDP, which accounts for how the economy is performing after inflation.
Britain's government statistics body, the Office for National Statistics, produces GDP figures on a monthly basis about six weeks after the end of the month. It compares the change in GDP month on month, as well as over a three-month period.
The ONS warns that changes on the month can prove volatile, preferring to assess economic performance over a three-month period as the wider period can smooth over irregularities.
The most closely watched GDP figures are for the four quarters of the year; for the three months to March, June, September and December.
The figures are usually revised in subsequent months as more data from businesses and the government becomes available.
The ONS also calculates the size of the UK economy relative to the number of people living here. GDP per capita shows whether we are actually getting richer or poorer, by stripping out the impact of population changes.
Richard Partington
Germany, the eurozone country most affected by the slowdown in global trade, contracted by 0.1% in the second quarter and there had been speculation that third quarter data due out next month would show a similar performance.
France and Spain – countries for which third quarter data has been published – grew by 0.3% and 0.4% respectively, in both cases slightly better than had been forecast.
The eurozone’s annual growth rate continued its steady decline during 2019, from 1.3% in the first quarter to 1.2% in the second and 1.1% in the latest three months.
Eurostat’s data for the 28-member EU – including the UK – showed gross domestic product expanded by 0.3% between the second and third quarters and at an annual rate of 1.4%.
The slightly stronger data for the EU is an indication the UK returned to growth in the third quarter after a 0.2% decline in the second quarter.
Bert Colijn, a senior eurozone economist at ING bank, said: “The eurozone economy didn’t slow further in the third quarter, which is something to be relieved about in the current environment of uncertainty and poor monthly data.
“Still, taking the 0.2% growth rate together with a sluggish start to the fourth quarter, according to poor survey data and slightly higher unemployment in September, reveals an economy in need of positive news about the trade environment to keep from sliding further.”
