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Highlights:
- The UK economy contracted by 0.3% in the quarter to September.
- Initially, when the figures were released last month, ONS had estimated the GDP contraction at 0.2% for the period.
The UK economy is going through troubles. Inflation is at historically high levels, and the Bank of England (BoE) has been hiking interest rates for the past 12 months now to control prices. It also risks halting economic growth and eventually leading to a prolonged recession. The latest revision of data financial data by the Office for National Statistics (ONS) doesn't paint a good picture for the coming months either.
According to the ONS, the UK economy saw a contraction of 0.3% in the third quarter of this year. This is more than what was estimated for the third quarter of this year earlier.
Image source: © Zhu_zhu | Megapixl.com
Initially, when the figures were released last month, ONS had estimated the GDP contraction at 0.2% for the period. However, the revised figures have taken the contraction higher by a percentage point, indicating that the country's economy took a bigger hit than earlier projections.
It is important to know that economic contractions for two quarters in a row would mean a recession.
Moreover, the revisions for the first and second quarters this year also revealed that the economy grew 0.6% in the first quarter and not 0.7% as was estimated earlier. Similarly, the second quarter saw a growth of 0.1% against the previous projections of 0.2%.
Let’s look at some industrial stocks in the current scenario.
Weir Group PLC (LON: WEIR)
The multinational firm provides mill circuit and technology services to mining and infrastructure markets. The FTSE 100 company’s current market capitalisation is £4,431.58 million, and its current EPS is 1.00. At the time of writing, WEIR's one-year return stood at 2.38%. The year-to-date return was negative at -0.56%, while the company's shares traded 0.29% lower at GBX 1,702 as of 11:29 am GMT.
Smiths Group PLC (LON: SMIN)
The diversified engineering company provides control systems and instruments to several industries. With a market capitalisation of £5,698.30 million, the stock has provided investors with a 12-month return of 4.26% as of 22 December. Its EPS currently stands at 2.67, and the stock was trading at GBX 1,616.00, up 0.44% as of 11:54 am GMT on Thursday.
Melrose Industries PLC (LON: MRO)
The British manufacturing firm acquires and invests in manufacturing businesses. Listed on the benchmark FTSE 100 index, Melrose Industries has a market cap of £5,331.57 million as of 22 December 2022. The EPS currently stands at 0.18. The stock has tumbled more than 13% in the past year and was trading 0.08% higher at GBX 131.60 as of 12:01 pm GMT on Thursday.
Note: The above content constitutes a very preliminary observation or view based on industry trends and is of limited scope without any in-depth fundamental valuation or technical analysis. Any interest in stocks or sectors should be thoroughly evaluated taking into consideration the associated risks.
