Transcript
ONS Economic Forum
Email: economicforum@ons.gov.ukTwitter: @ONS
#ONSeconomyWebsite:
http://www.ons.gov.uk/ons/about-ons/get-involved/events/events/economic-forum/index.html
8 October 20141
What’s new
Peter Patterson, Deputy Chief Economic Adviser
ONS Economic Forum
8 October 2014
2
Improvements
• Improvements to methods• GNI reservations• Continuous improvement
• New international frameworks (ESA 2010, BPM6, MGDD)
• New data (from 2010 onwards)
3
Improvements to methods: Addressing GNI reservations
• ‘GNI reservations’ largely about the level of GNI but there is some impact on growth
• Articles published on 29 May • Review of Non-Profit Institution serving
Households units (NPISH)• Financial Intermediaries Services Indirectly
Measured (FISIM) • Illegal Activities • New Cars • Own-account construction• Exhaustiveness adjustments
4
Improvements to methods: ‘Continuous improvement’
• Gross Fixed Capital Formation
• Inventories
• Industry reviews
5
New International Frameworks
• ESA 2010 based on SNA 2008• SNA 2008 already adopted worldwide• ESA 2010 implemented from
September 2014 across all EU Member states
• Balance of Payments Manual 6 – mainly GDP-neutral
• Greater comparability, consistency and relevance
6
New International Frameworks
• R&D• Weapons• Decommissioning costs• Pensions• Small Tools• BPM6 changes
7
Summary of revisions to GDP
• Substantial increase in level of nominal GDP in all years - on average 4.1% higher than before
• Little change to average annual real GDP growth 1997-2013 – up 0.1pp from 1.9% to 2.0%
• Bigger changes to individual years - range +0.9pp (2009) to -0.9pp (2007)
• Slight downward revision to average annual growth 1997-2007, but upward revision (+0.5pp pa) to 2007-2012 . No change to 2013
• Slightly higher growth 1997-2013 is on average entirely due to ESA 2010 changes ...
• .. but in 2008-2012 a result of a range of non-ESA changes
8
Higher levels of nominal GDP
9
1997 Q1
Q2
Q3
Q4
1998 Q1
Q2
Q3
Q4
1999 Q1
Q2
Q3
Q4
2000 Q1
Q2
Q3
Q4
2001 Q1
Q2
Q3
Q4
2002 Q1
Q2
Q3
Q4
2003 Q1
Q2
Q3
Q4
2004 Q1
Q2
Q3
Q4
2005 Q1
Q2
Q3
Q4
2006 Q1
Q2
Q3
Q4
2007 Q1
Q2
Q3
Q4
2008 Q1
Q2
Q3
Q4
2009 Q1
Q2
Q3
Q4
2010 Q1
Q2
Q3
Q4
2011 Q1
Q2
Q3
Q4
2012 Q1
Q2
Q3
Q4
2013 Q1
Q2
Q3
Q4
2014Q1
Q2
200000
250000
300000
350000
400000
450000
Previously published
Blue Book 2014
£ billion per quarter
Real GDP growth
10
-8
-6
-4
-2
0
2
4
6
8
Previously published
Blue Book 2014
% changes on same quarter a year earlier, chained volume measure
Real GDP – 2008-2009 recession
• Broad narrative of recession is little changed• Timing and duration of recession unchanged
– peak 2008Q1, trough 2009Q2• Peak-to-trough fall in output revised to 6.0%
(previously 7.2%) – remains within broad range of previous estimates of around 6-7%
• Remains the deepest UK recession since ONS records began in 1948
11
Real GDP – recovery since 2009
• Increase in real GDP between 2009Q2 and 2014Q2 revised from 8.0% to 9.3%
• Average annual growth rate up from 1.5% to 1.8%
• Upward revisions due to a range of factors - changes to investment and inventories, new data, and S&U balancing (2012)
• Relatively little impact from ESA 2010 changes (including R&D)
• Recovery remains the weakest on record12
Comparison of UK recessions
13
0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 2590
95
100
105
110
115
1973Q2
1979Q2
1990Q2
2008Q1
Real GDP, index numbers, pre-recession peak = 100
Quarters following pre-recession peaks
Productivity (output per hour)
1419 19 19 19 20 20 20 20 20 20 20 20 20 20 20 20 20 20 20 20 20 20 20 20
75
80
85
90
95
100
105
110
115
Previously published
Blue Book 2014
1997-2007 trend
Index nos, 2008Q1 = 100
Changes to fixed investment (GFCF)
• Capitalisation of R&D• Capitalisation of military weapons systems• Improvements to own-account construction• Inclusion of expenditure on small tools• New data from ABS for 2011 and 2012• Decommissioning costs for nuclear power plants• Supply and use balancing adjustments• Reconversion of survey data from SIC03 to SIC07• Revised data for land improvements• Other annual revisions to data sources
15
Total fixed investment (GFCF)
16
1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 20130
50
100
150
200
250
300
BB14BB13
£ billion per year
Revisions to GFCF by component
17
1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013-10
0
10
20
30
40
50
60
R&D
weapons
OA construc-tion
ABS
small tools
terminal costs
other
total change
£ billion
Contributions to GDP growth
18
-2
0
2
4
6
8
10
Other Net Trade
GFCF HHFCE
GDP
Previously published
-2
0
2
4
6
8
10
Other Net Trade
GFCF HHFCE
GDP
Blue Book 2014
Cumulative contributions of expenditure components to GDP growth since 2009Q2 (percentage points)
Gross operating surplus: PNFCs
19
1997 Q1
Q2
Q3
Q4
1998 Q1
Q2
Q3
Q4
1999 Q1
Q2
Q3
Q4
2000 Q1
Q2
Q3
Q4
2001 Q1
Q2
Q3
Q4
2002 Q1
Q2
Q3
Q4
2003 Q1
Q2
Q3
Q4
2004 Q1
Q2
Q3
Q4
2005 Q1
Q2
Q3
Q4
2006 Q1
Q2
Q3
Q4
2007 Q1
Q2
Q3
Q4
2008 Q1
Q2
Q3
Q4
2009 Q1
Q2
Q3
Q4
2010 Q1
Q2
Q3
Q4
2011 Q1
Q2
Q3
Q4
2012 Q1
Q2
Q3
Q4
2013 Q1
Q2
Q3
Q4
2014 Q1
Q2
40000
45000
50000
55000
60000
65000
70000
75000
80000
85000
Previously published
Blue Book 2014
£ billion per quarter
Gross operating surplus – financial cos
20
1997 Q1
Q2
Q3
Q4
1998 Q1
Q2
Q3
Q4
1999 Q1
Q2
Q3
Q4
2000 Q1
Q2
Q3
Q4
2001 Q1
Q2
Q3
Q4
2002 Q1
Q2
Q3
Q4
2003 Q1
Q2
Q3
Q4
2004 Q1
Q2
Q3
Q4
2005 Q1
Q2
Q3
Q4
2006 Q1
Q2
Q3
Q4
2007 Q1
Q2
Q3
Q4
2008 Q1
Q2
Q3
Q4
2009 Q1
Q2
Q3
Q4
2010 Q1
Q2
Q3
Q4
2011 Q1
Q2
Q3
Q4
2012 Q1
Q2
Q3
Q4
2013 Q1
Q2
Q3
Q4
2014 Q1
Q2
0
5000
10000
15000
20000
25000
Previously published Blue Book 2014
£ billion per quarter
Real households’ disposable income growth
21
1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013-2
-1
0
1
2
3
4
5
6
7
RHDI annual growth (Blue Book 2014) RHDI annual growth (previously published)
% changes on previous year
Changes to households’ saving ratio
22
1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 20130
2
4
6
8
10
12
14
Saving ratio (Blue Book 2014, %) Saving ratio (previously published, %)
Households’ saving as % of total available resources
Sectoral financial balances: BB14 changes
Net lending/borrowing, % of GDPPreviously published Blue Book 2014
23
1997
1999
2001
2003
2005
2007
2009
2011
2013
-15%
-10%
-5%
0%
5%
10%
15%
-15%
-10%
-5%
0%
5%
10%
15%
Rest of the WorldPrivate non-financial corporationsFinancial corporationsHouseholdsPublic sector
Current Account: key changes
Change Rationale
Measurement of MFI profits on FDI• Current Operating Performance (COP) rather than All-Inclusive (AI) basis.
• holding gains and losses now excluded.
• debate on whether COP or AI better long standing one.
• COP recommended under BPM5, BPM6 mandates.
• evidence many countries already using COP. Better international comparisons possible.
• COP used throughout the UK sector accounts so improved coherence.
• capital gains removed as form of income – correct treatment.
Measurement of FISIM• FISIM business with non-resident financial institutions now excluded.
• different reference rate used for exports.
• FISIM imports reduced in line with levels of overseas loans & deposits to reflect change in sectorisation of UK non-bank deposits with, and loans from, banks in the rest of the world introduced in Blue 2013.
• significant level of financial services between banks relate to intra-bank funding, rather than provision of a service to the real economy.
• implied interest rate charged on foreign loans with UK banks better reflects margins of UK banks.
• improved coherence between FISIM imports and loans & deposits data.
24
Current Account: key changes
Change Rationale
Illegal activities
• measurement extended to include drugs.
• illegal transactions exchanged with consent are included in the ‘production boundary’ so should be captured in the National Accounts.
• all EU countries obliged to introduce for comparability purposes.
Gambling• introduction of estimates for ‘remote’ gambling
• on-line gambling an ever increasing e-service provided to households.
• estimated that 90% of on-line gambling consumed in UK is supplied from overseas.
Allocated non-monetary gold
• estimated for first time.
• all gold other than where monetary authorities have title and is held as reserve assets (store of wealth).
• level of trade can be significant.
• previously lack of available data but BoE developed collection from main UK custodians of gold
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Current account balance
26
1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013-5.0%
-4.5%
-4.0%
-3.5%
-3.0%
-2.5%
-2.0%
-1.5%
-1.0%
-0.5%
0.0%
Previously published Blue Book 2014
Current account of balance of payments, % GDP
Revisions to current account balance
27
1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013-3.5%
-3.0%
-2.5%
-2.0%
-1.5%
-1.0%
-0.5%
0.0%
0.5%
1.0%
Revision to secondary income balance Revision to primary income balance
Revision to trade balance Revision to current account balance
Pink Book revisions to current account of balance of payments (% GDP)
International investment position
28
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17-300
-250
-200
-150
-100
-50
0
50
100
150
Revision Previously published Blue Book 2014
£ billion
LFS re-weighting for 2011 Census
• Employment level (16+) increased• Employment rate (16-64) virtually unchanged
to 2010; from 2010 slightly lower (up to 0.2pp)
• Unemployment level (16+) slightly higher but rate (16+) virtually unchanged
• Inactivity level (16-64) increased• Inactivity rate (16-64) virtually unchanged to
2010; from 2010 slightly higher (up to 0.2pp)
29
LFS re-weighting for 2011 Census
30
Contributions to productivity growth
31
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26-5
-4
-3
-2
-1
0
1
2
ABDE¹ Manufacturing Construction Financial Services
Other Services Whole Economy
Contributions (% points) to cumulative growth in output per hour since 2008Q1
Output growth by sector
32
Mining and quarryingChemical & pharmaceutical
Finance and insuranceTextiles & clothing
Information & communicationProduction
Wood, paper & printingProfessional services
Coke & petroleumAccommodation & foodMachinery & equipment
ManufacturingTotal
ServicesOther services
Transport, storage & communicationRubber & plastic
Arts, entertainment and recreationGovernment servicesComputer & electrical
Real estateMetals
Food, drink & tobaccoWholesale & retail
ConstructionAdmin & support
Transport
-4% -2% 0% 2%
Difference
Q1 1997 - Q1 2008
Q2 2009-Q2 2014
Average quarterly output growth, per cent
Job-to-job moves by reason
33
2003
2003
2004
2004
2005
2005
2006
2006
2007
2007
2008
2008
2009
2009
2010
2010
2011
2011
2012
2012
2013
2013
2014
0.0%
0.5%
1.0%
1.5%
2.0%
2.5%
3.0%
Retirement or gave up work Resignations Dismissals and Redundacies Other reasons Move Rate
% of employees, 4 quarter moving average
Job-to-job moves by occupation type
34
0.0%
0.5%
1.0%
1.5%
2.0%
2.5%
3.0%
Non-response Moves to lower occupations Moves to higher occupationsMoves within low occupations Moves within medium occupations Moves within high occupationsTotal
% of employees, 4 quarter moving average
CPI inflation by import intensity
35
2007
2008
2009
2010
2011
2012
2013
2014
-2
-1
0
1
2
3
4
5
6
7
Data Unavailable Energy and fuel 75-100%
50-75% 25-50% 0-25%
0% CPI
Contributions to CPI annual % change: percentage points
85 class level components of CPI according to degree of import penetration in household consumption
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