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Explaining the GDP Growth Figure

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One slide explaining how the ONS in the UK combine the growth in different sectors of the economy to calculate the growth in total UK GDP.

One slide explaining how the ONS in the UK combine the growth in different sectors of the economy to calculate the growth in total UK GDP.

Published in: Economy & Finance
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  • 1. EXPLAINING THE GDP GROWTH FIGURE
  • 2. GDP INCREASED 0.8% BETWEEN Q4 2013 AND Q1 2014 0.8% Question: How do the Office for National Statistics get to this 0.8% figure? Answer: They look at different industries: services, production, construction and agriculture. The contribution an industry makes to total growth in UK GDP is dependent on: • How big that industry is relative to the whole economy – it’s weight • The growth in that industry. Explaining the GDP Growth Figure Announcement from the Office for National Statistics:
  • 3. Explaining the GDP Growth Figure The growth figures between Q4 2013 and Q1 2014: The current weights: (based on the UK economy in 2010) Services Production Construction Agriculture 77.8% 15.2% 6.3% 0.7% 0.9% 0.8% 0.3% -0.7%
  • 4. The weights and growth figures for each industry are combined to give the overall growth rate in total UK GDP. Between Q4 2013 and Q1 2014 the overall growth rate in UK GDP was 0.8%. This chart shows that 0.8% broken down by the contribution from each industry. Explaining the GDP Growth Figure 0 0.1 0.2 0.3 0.4 0.5 0.6 0.7 0.8 0.9 Contribution to total GDP growth (percentage points) 0.8% 0.70 Services 0.11 Production 0.02 Construction 0.00 Agriculture
  • 5. The weights and growth figures for each industry are combined to give the overall growth rate in total UK GDP. Between Q4 2013 and Q1 2014 the overall growth rate in UK GDP was 0.8%. This chart shows that 0.8% broken down by the contribution from each industry. Explaining the GDP Growth Figure 0 0.1 0.2 0.3 0.4 0.5 0.6 0.7 0.8 0.9 0.8% 0.70 Services 0.11 Production 0.02 Construction 0.00 Agriculture Services has the biggest weight and saw the largest positive change so it is very dominant Contribution to total GDP growth (percentage points)
  • 6. The weights and growth figures for each industry are combined to give the overall growth rate in total UK GDP. Between Q4 2013 and Q1 2014 the overall growth rate in UK GDP was 0.8%. This chart shows that 0.8% broken down by the contribution from each industry. Explaining the GDP Growth Figure 0 0.1 0.2 0.3 0.4 0.5 0.6 0.7 0.8 0.9 0.8% 0.70 Services 0.11 Production 0.02 Construction 0.00 Agriculture Services has the biggest weight and saw the largest positive change so it is very dominant Agriculture is only a small section of the UK economy so it has a very small weight. Therefore even though there was a contraction in the agriculture industry, it had zero impact on total GDP growth Contribution to total GDP growth (percentage points)

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