The slowest recovery for more than sixty years
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.
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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