From the TUC

The slowest recovery for more than sixty years

26 Jul 2011, by in Economics

Today’s GDP figures show that the recovery is very, very slow. Gross Domestic Product rose just 0.2% in the second quarter – growth over the last 12 months has been a miserable 0.7%. Compared with the second quarter of 2010, growth is concentrated entirely in private sector services – even manufacturing, which was the bright spark till recently, shows a decline of 0.3% and the cuts are now having a significant impact, with government services at 0.0% growth on a year previously.

GDP growth since the start of the recession:

Quarter Growth Quarter Growth
2008 Q2 -0.3 2009 Q4 0.4
2008 Q3 -0.9 2010 Q1 0.4
2008 Q4 -2.0 2010 Q2 1.0
2009 Q1 -2.3 2010 Q3 0.6
2009 Q2 -0.8 2010 Q4 -0.5
2009 Q3 -0.2 2011 Q1 0.5
2011 Q2 0.2

A fortnight ago, the Guardian’s Larry Elliott predicted that this would be the slowest recovery since the Second World War and these figures bear him out. We have GDP data back to 1955, and every single recovery since then has been faster than the one that began in 2009.

In the tables below, we use the standard definition of a recession as two successive quarters of negative growth. We measure the speed of the recovery by asking how many quarters did it take us to get back to the level of output we had in the first quarter of the recession. So, for instance, the 1956 recession began in Q1 1956, when output was £94.411 bn. Output passed that mark in Q4 1956, when it was £94.527 bn – so the recovery took three quarters.

1956 recession – 3 quarters to recovery

1956 Q1                94,411
1956 Q2                94,250
1956 Q3                94,120
1956 Q4                94,527

1957 recession – 3 quarters to recovery

1957 Q2                96,235
1957 Q3                95,504
1957 Q4                95,519
1958 Q1                97,047

1961 recession – 2 quarters to recovery

1961 Q3             107,977
1961 Q4             107,796
1962 Q1             108,320

1973 recession – 4 quarters to recovery

1973 Q3             157,973
1973 Q4             157,697
1974 Q1             153,808
1974 Q2             156,721
1974 Q3             158,291

1975 recession – 2 quarters to recovery

1975 Q2             154,278
1975 Q3             154,033
1975 Q4             156,215

1980 recession – 12 quarters to recovery

1980 Q1             172,436
1980 Q2             169,359
1980 Q3             169,038
1980 Q4             167,180
1981 Q1             166,052
1981 Q2             166,393
1981 Q3             168,651
1981 Q4             168,669
1982 Q1             169,296
1982 Q2             171,436
1982 Q3             171,441
1982 Q4             172,344
1983 Q1             174,865

1990 recession – 10 quarters to recovery

1990 Q3             221,618
1990 Q4             220,350
1991 Q1             220,151
1991 Q2             219,417
1991 Q3             218,586
1991 Q4             218,820
1992 Q1             219,114
1992 Q2             218,590
1992 Q3             219,674
1992 Q4             220,882
1993 Q1             222,234

2008 recession – 12 quarters, not yet in recovery

2008 Q2             343,868
2008 Q3             340,780
2008 Q4             333,682
2009 Q1             326,257
2009 Q2             323,585
2009 Q3             322,655
2009 Q4             324,192
2010 Q1             325,360
2010 Q2             328,836
2010 Q3             330,860
2010 Q4             329,189
2011 Q1             330,724
2011 Q2             331,273

Even if we surpass Q2 2008 output in the next quarter, this will be the slowest recovery on record.

And that isn’t going to happen.

The recovery began in the fourth quarter of 2009 – at the average growth rate we have managed since then it will take more than another 10 quarters to pass the Q2 2008 level of output. The Office for Budget Responsibility’s latest Economic and Fiscal Outlook forecasts growth of 1.7% in 2011 and 2.5% in 2012. After today’s figures those growth rates look a bit optimistic, but even if we accept them, we won’t surpass the output achieved in the second quarter of 2008 till the first quarter of 2013 – 19 quarters after the recession began.

2 Responses to The slowest recovery for more than sixty years

  1. Bill Kruse
    Jul 26th 2011, 3:27 pm

    We don’t actually want a recovery as that will simply reinforce us in our servile position of working mainly to enrich the banks over and above ourselves. We want a new direction, not a restoration of the old one. We need a completely new way of banking such as is being practiced in the American State of North Dakota (doing really well) or Brazil (very nicely thank you despite inflation). Where’s the discussion? All we get in the media is endless economic theatre, political posturing, none of it relevant.

    BB

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