According to analysts at TD Securities, the big question mark for UK’s August GDP is the impact of the auto sector.
“There are normally scheduled shutdowns in August every year, but most major auto manufacturers had shutdowns in April this year, in anticipations of disruptions stemming from the original Brexit date of 29 March. This had initially led us to pencil in a strong pick-up in August IP, since seasonal factors would have been ‘expecting’ a drop in activity that didn’t occur if the regular shutdowns already happened in April. However, anecdotal evidence suggests that at least some auto manufacturers did still go through with their regular August shutdowns, so any upside from IP should be limited.”
“Overall, we look for August GDP to come in with a modest 0.2% gain (mkt: 0.0%), though this leaves the quarter on solid footing after the 0.4% increase in July.”