The first estimate is based on the output components - services, industry (largely manufacturing), and construction of GDP.
Despite the slight disappointment of the March data, retail sales grew by 0.9% qoq for Q1 as a whole and the same should be true for total services growth. Industrial production should have been approximately flat in Q1 and so have contributed nothing to growth.
According to Societe Generale, the big drag on growth in Q1 will have been construction. Output in that sector has been surprisingly weak, falling in both January and February and, even if it is flat in March, that would leave output down by 3.3% qoq for the quarter as a whole. This will subtract 0.2pp from overall activity and lead to a fall in GDP growth from 0.6% qoq to 0.5% qoq.
Inevitably, the headlines accompanying that result will suggest that the momentum of the recovery is fading but that would be an erroneous conclusion.
Services growth is expected to remain dynamic and the construction will likely continue to fall at thepace of Q1 therefore a bounce is expected in growth in Q2.
