The slowest recovery for more than sixty years

26 Jul 2011, by Richard Exell 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:

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

1957 recession – 3 quarters to recovery

1961 recession – 2 quarters to recovery

1973 recession – 4 quarters to recovery

1975 recession – 2 quarters to recovery

1980 recession – 12 quarters to recovery

1990 recession – 10 quarters to recovery

2008 recession – 12 quarters, not yet in recovery

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.