Economic Forum, 1 March 2019 University of the West of England, Bristol

Economic Forum - Bristol
01 March 2019
Twitter: @ONS #Econstats
01 March 2019

Agenda
12:30 – 13:00 Registration with tea and coffee
13:00 – 13:10 Welcome and introduction – Felix Ritchie
13:10 – 13:30 Introducing the Office for National Statistics – Ed Palmer
13:30 – 13:50 Some examples of ONS analysis – Mark Chandler
13:50 – 14:00 Question and answer session
14:00 – 14:15 Refreshment break
14:15 – 14:35 Economic Statistics for the West of England – Cecilia Campos
14:35 – 14:55 University of the West of England: Making sense of sub-regional data – Dr Ian Smith
14:55 – 15:10 Question and answer session
15:10 – 15:30 Networking

Welcome and Introduction
Director of Bristol Centre for Economics and Finance
Professor Felix Ritchie - UWE
01 March 2019

Introducing the
Office for National Statistics
Deputy Chief Economist, Economic Advice and Analysis
Office for National Statistics
economic.advice@ons.gov.uk
Ed Palmer

To discuss today
UK Statistics Authority and the Office for National Statistics:
• Our status and role
• What the ONS does
• Understanding the UK economy: our latest economic statistics

The status and role of the UK Statistics Authority
An independent statutory body
Operating at arm’s length from government as a non-ministerial department,
reporting directly to the UK’s Parliaments and Assemblies
In law (the Statistics and Registration Services Act 2007) our objective is:
“promoting and safeguarding the production and publication of official
statistics that serve the public good”
And that public good includes:
• informing the public about social and environmental matters
• assisting in the development and evaluation of public policy
• regulating quality and publicly challenging the misuse of statistics

Who are we?
Economic, public policy and population statistics
Other government Departments also provide statistics, e.g. energy, health,
environment
Our responsibility is for coherence of system as a whole
Census provider in England and Wales
Office locations in Newport, Titchfield, London
UK Statistics
Authority
Other
government
stats producers
Office for
National
Statistics
Office for
Statistics
Regulation

Our principal outputs
GDP growth Inflation (Un)employment Wages
Trade Public finances
Regional and
country economic
data
Crime
Births, deaths and
marriages
Population Migration
Health and social
care
Personal income
and wealth
Well-being Environment …and more

Latest data from the ONS
• GDP
• Personal and economic well-being
• Inflation
• Employment
• Productivity

GDP growth: 0.2% in Quarter 4 2018
Gross domestic product growth, quarter-on-quarter and quarter on same quarter a year ago growth rate
UK, Quarter 1 (Jan to Mar) 2008 to Quarter 4 (Oct to Dec) 2018
Source: ONS

UK growth compared to other G7 countries
Source: OECD and ONS

Personal and economic well-being dashboard, February 2019
Source: ONS

Measures of inflation: input producer prices, output producer
prices, consumer prices
12-month growth rates for input Producer Price Index (PPI) (left-hand side), output PPI (left-hand side), and
Consumer Prices Index including owner occupiers' housing costs (CPIH) (right-hand side)
Source: ONS

What is driving growth in consumer prices?
Contributions to the CPIH 12-month rate: January 2018 to December 2018
Source: ONS

Labour market headline figures
Source: ONS
UK employment rates (aged 16 to 64 years), seasonally adjusted
January to March 1971 to October to December 2018
UK unemployment rates (aged 16 years and over), seasonally adjusted
January to March 1971 to October to December 2018

Labour productivity performance remains a key weakness
Output per hour and output per worker. Seasonally adjusted, Quarter 1 (Jan to Mar) 1994 to Quarter 3 (July to Sept) 2018, UK
Source: ONS

01 March 2019
Some Examples of
ONS Analysis
Senior Economic Adviser
Economic Advice and Analysis
Mark Chandler

UK Trade
- New Frontiers in Trade
Analysis

What have our users told us were their
priorities for improving trade statistics?
• More granular detail
• More timely and frequent publications
• Wider coverage and more dimensions
• Easier ways to access data
• More insightful analysis
• More, more, more…

 ITIS sample doubled in size to 2.2k businesses
 Quarterly country by service type data
 67 countries by 31 service types
 Chained volume measures
 Implied deflators
Trade in services improvements we
have delivered in the past 12 months

 Monthly country by commodity data
 234 countries by 125 commodities
 Annual industry by country and by commodity
 Chained volume measures
 Implied deflators
Trade in goods improvements we have
delivered in the past 12 months

Interactive global maps to explore UK trade

New more insightful
analysis…

0 10 20 30 40 50 60
28 Manufacture of machinery and equipment n.e.c.
47 Retail trade except of motor vehicles and
motorcycles
29 Manufacture of motor vehicles trailers and semi-
trailers
30 Manufacture of other transport equipment
46 Wholesale trade except of motor vehicles and
motorcycles
EU Non-EU
Top five UK trade in goods exporting
industries, 2016
£ billion, current prices

0
5
10
15
20
25
30
Non-EU EU
ImportsExports
Industry SIC 29 ‘Manufacture of motor
vehicles, trailers and semi-trailers’, 2016

Exports by industry SIC 29 ‘Manufacture of
motor vehicles, trailers and semi-trailers’, 2016
0.0
1.0
2.0
3.0
4.0
Germany United
States inc
Puerto Rico
China Italy Netherlands Spain Belgium France Australia Turkey
Non-EU EU

Annual Business Survey (ABS) Industry SIC 29
Turnover £74bn
aGVA £17bn
Number of enterprises 3,235
% of enterprises that export 27%
Number of people employed 159,000
Industry SIC 29 ‘Manufacture of motor
vehicles, trailers and semi-trailers’, 2016

10
20
30
40
50
60
2009 2010 2011 2012 2013 2014 2015 2016 2017 2018
Total Imports
Total Exports
UK trade in road vehicles fell in the latest 12
month period, the first fall in nine years
£ billion, non-seasonally adjusted, current prices
12 months to November on a rolling basis

-800
-600
-400
-200
0
200
400
600
800
12-months to Nov17 12-months to Nov18
Germany Spain France Czech Republic Belgium
Japan Slovakia Italy South Africa Hungary
£ million, non-seasonally adjusted, current prices
Change in the value of total UK imports of
road vehicles by top 10 contributor countries
12 months to November 2017 and 12 months to November 2018

 More granular detail
 More timely and frequent publications
 Wider coverage and more dimensions
 Innovative tools for accessing data
 More insightful analysis
with more to follow…

Exploring Recent Trends in
the London Housing Market

12-month growth rate of the UK House Price Index
and Index of Private Housing Rental Prices
London, January 2012 to July 2018
-5
0
5
10
15
20
25
Jan-12
Mar-12
May-12
Jul-12
Sep-12
Nov-12
Jan-13
Mar-13
May-13
Jul-13
Sep-13
Nov-13
Jan-14
Mar-14
May-14
Jul-14
Sep-14
Nov-14
Jan-15
Mar-15
May-15
Jul-15
Sep-15
Nov-15
Jan-16
Mar-16
May-16
Jul-16
Sep-16
Nov-16
Jan-17
Mar-17
May-17
Jul-17
Sep-17
Nov-17
Jan-18
Mar-18
May-18
Jul-18
HPI IPHRP
%

12-month growth rate of the House Price Index
London, GB and GB excluding London, January 2012 to July 2018
-5
0
5
10
15
20
25
Jan-12
Mar-12
May-12
Jul-12
Sep-12
Nov-12
Jan-13
Mar-13
May-13
Jul-13
Sep-13
Nov-13
Jan-14
Mar-14
May-14
Jul-14
Sep-14
Nov-14
Jan-15
Mar-15
May-15
Jul-15
Sep-15
Nov-15
Jan-16
Mar-16
May-16
Jul-16
Sep-16
Nov-16
Jan-17
Mar-17
May-17
Jul-17
Sep-17
Nov-17
Jan-18
Mar-18
May-18
Jul-18
London GB GB excluding London
%

12-month growth rate of the House Price Index
Inner London and outer London, January 2012 to July 2018
-5.0
0.0
5.0
10.0
15.0
20.0
25.0
Jan-12
Mar-12
May-12
Jul-12
Sep-12
Nov-12
Jan-13
Mar-13
May-13
Jul-13
Sep-13
Nov-13
Jan-14
Mar-14
May-14
Jul-14
Sep-14
Nov-14
Jan-15
Mar-15
May-15
Jul-15
Sep-15
Nov-15
Jan-16
Mar-16
May-16
Jul-16
Sep-16
Nov-16
Jan-17
Mar-17
May-17
Jul-17
Sep-17
Nov-17
Jan-18
Mar-18
May-18
Jul-18
Inner London Outer London
%

Average growth rate of House Price Index
London boroughs, 12 months to July 2018
-8.0
-6.0
-4.0
-2.0
0.0
2.0
4.0
6.0
%

Economic
statistics for the
West of England
Economic Advisor
ONS Centre for Subnational Analysis
Cecilia Campos
01 March 2019

Contents
Devolution Programme
Some recent outputs
Regional GVA
Sub-regional productivity
Service exports
Developments

Regional Balanced GVA
Regional & Sub-Regional Household Final Consumption
Expenditure
Regional Short Term Indicators
Country and Regional Public Sector Finances
Exports of Services Data
Productivity
Small Area Data
Flexible Geographies
Investigating Uses of Administrative Data
Regional Prices
Stakeholder Engagement
Devolution
Programme
link
A programme to
improve ONS
regional and local
statistics

ONS Regional Economic Outputs
Outputs 2018 and 2019
GVA Publication
With balanced GVA,
more industry detail,
more flexible geographies
Productivity
by NUTS1 regions
by Industry
With real labour productivity estimates
on an industry-by-region basis
Regional and sub-regional
productivity
With real labour productivity for NUTS1, NUTS2, NUTS3 regions and
LEPs
Economic Review: April 2018
Articles on regional GVA growth, firm level regional productivity analysis for the business
economy, and international comparisons of regional productivity
Service Exports
With new product-level analysis by NUTS1 area
NUTS2 and NUTS3 geographies and
15 combined authorities and city regions

by gross value added (balanced)
Regional economic
activity

1998 - 2007
2010 -2017
UKUK
-1 0 1 2 3 4 5
Northern Ireland
Scotland
Wales
South West
South East
London
East of England
West Midlands
East Midlands
Yorkshire and The Humber
North West
North East
Northern Ireland
Scotland
Wales
South West
South East
London
East of England
West Midlands
East Midlands
North West
North East
%
Average growth rate of gross value added (chained volume measure),
by NUTS1 regions
• At national level, the
average growth rate
dropped from 2.8% to
1.9%
• There was a
turnaround in the
average annual growth
differential of some
regions / countries of
the UK
• There was an increase
in the gap in the
intraregional growth
rates
Link to publication

• Only a small number of
areas were able to keep
above national average
growth in both periods (top-
right quadrant).
• Most of the areas growing
above or close to the UK
average in the pre-
economic downturn period
fared poorly in the post-
economic downturn period
(shown in the top-left
quadrant).
• All NUTS2 areas in the
South West region have
experienced an average
growth rate below UK
average since 2010.
-1%
0%
1%
2%
3%
4%
5%
-1% 0% 1% 2% 3% 4% 5%
1998-2007
2010-2017
Real GVA average growth rate by NUTS2 areas
North West
Yorkshire and
The Humber
East Midlands
West Midlands
East of England
London
South East
South West
Wales
Scotland
Northern Ireland
UK (1998-2007)
UK (2010-2017)
Link to publication

60
65
70
75
80
85
90
95
100
105
1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017
2016 = 100
Gross value added growth, chained volume measure,
West of England Local Enterprise Partnership1998-2017
UK
West of England (LEP)
Bristol, City of (NUTS3)
Bath and North East Somerset, North
Somerset and South Gloucestershire (NUTS3)
Link to data source

17.9%
0.0%
5.0%
10.0%
15.0%
20.0%
25.0%
30.0%
Gross value added growth by combined authority,
from 2009 to 2017 (%)
Link to publication and data

1998 - 2007
2010 - 2016
UK
UK
-4 -2 0 2 4 6 8 10
Low-tech Manufacturing
Medium-High Tech Manufacturing
Medium-Low Tech Manufacturing
Other Production
Other KIS
Less Knowledge Intensive Market Services
High- tech Manufacturing
Real Estate
Knowledge Intensive Financial Services
Knowledge Intensive Market Services
High-tech KIS
Low-tech Manufacturing
Medium-High Tech Manufacturing
Medium-Low Tech Manufacturing
Other Production
Other KIS
Less Knowledge Intensive Market Services
High- tech Manufacturing
Real Estate
Knowledge Intensive Financial Services
Knowledge Intensive Market Services
High-tech KIS
%
Annual growth rates of real gross value added by industry groups, UK,
1998 to 2007 and 2010 to 2016
Link to publication

0.0
0.2
0.4
0.6
0.8
1.0
1.2
1.4
1.6
1.8
1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
Location Quotients: Gloucestershire, Wiltshire and Bristol/Bath NUTS2
area, 1998 to 2016
KIS & High Tech
Services
LKIS & Other
KIS
Low to Medium
Tech Manuf
Medium to high
tech manuf
Other Production
Real Estate
Gloucestershire,
Wiltshire and
Bristol/Bath
NUTS2 area has
a relative
specialisation in
medium to high
technology
manufacturing
type of sectors.
Link to publication

by labour productivity
Regional economic
performance

101.9
0.0
20.0
40.0
60.0
80.0
100.0
120.0
140.0
160.0
UK=100
Nominal (smoothed) GVA per hour worked indices
by local enterprise partnerships, 2017

West of England relatively
unchanged productivity during
period 2010 to 2017, with 12%
increase in hours worked and
11% growth in GVA.
Overall, 12 of the 38 LEPs
experienced a decline in
productivity over the 2010 to
2017 period.
Gross value added growth compared with hours worked
growth for local enterprise partnerships (LEPs), 2010 to 2017
Link to publication
West of
England

• All NUTS1 regions and
NUTS2 subregions in
Great Britain have a mix
of high and low labour
firms
• In the South East, and
particularly in London,
there is a greater share
of high productivity firms
in comparison with other
regions and countries of
Great Britain..
Source: Annual Business Survey
GVA per worker in the non-financial business economy, NUTS1 regions, 2015
Link to publication

A region’s industry structure
appears to only play a
relatively small role in
productivity differences
between regions.
Instead, it is the differences
between average firms’
productivity within
industries that has the most
significant effect on
aggregate regional
productivity differences
Source: Annual Business Survey
-40 -20 0 20 40 60
North East
North West
East Midlands
West Midlands
East of England
London
South East
South West
Wales
Scotland
Industry Mix vs Firm Productivity Effect (non-
financial business economy) 2015
Industry Mix Effect (pps) Firm Productivity Effect (pps)
Link to publication

Labour productivity by NUTS1 regions in 2014
UK and selected EU countries, Index UK=100
Link to publication

Labour productivity by selected NUTS2 and NUTS3 subregions in 2014
Link to publication

2011 to 2016
Regional and sub-
regional analysis of
service exports

Source: UK Balance of Payments - The Pink Book; International Trade in Services
Service exports and functional category by NUTS1 area of Great Britain, 2016

Source: UK Balance of Payments - The Pink Book; International Trade in Services
Service exports estimates for the South West NUTS1 area, 2016

Service exports for selected product subcategories

Total value of exports of services by NUTS3, 2016

Service exports by city regions and combined authorities by functional category

Developments
Regional Economic
Statistics

Background
• Quarterly GDP for the nine
NUTS1 regions of England
• Data sources: VAT, Monthly
Business Survey, range of
external suppliers
• Will publish at a section level
(A, B, C etc), growth rates
with indices.
Progress
• Data sources have been finalised. There will be an
emphasis on using VAT data ahead of other data
sources.
• System build is ongoing and nearing completion
• Plan to publish in the first half of 2019 – publication
date to be announced in the first quarter of 2019.
• A user consultation will accompany the initial
publication.
Quarterly Regional GDP

In September 2018, we published experimental
regional estimates of household spending
across the whole UK for the first time.
These were aimed at showing users what is
possible; the production of these estimates has
involved making some very broad assumptions
using currently available data sources, some of
which have limited sample sizes, and so strong
caution is advised when interpreting the
findings.
Future work
Over the next few years, we aim to
identify and introduce new data
sources that will allow us to improve
the quality of these experimental
figures and further understand how
changes in sampling and the
assumptions made can affect the
results; we will use these initial results
to consult with users on how best we
can develop them in the future
Regional household expenditure

Research funded by ONS investigating the potential
to use existing data sources to develop regional
price indices was published in November 2017.
This research demonstrated the limits of the
currently available data: whilst measures could be
created and over the long-term used to assess
trend inflation by region, there was volatility in the
short-term, driven by erratic changes in weights.
Developments
Further work is taking place to
build on some of the findings in
the first report, in particular
exploring the potential for
small-area estimation
techniques to improve
expenditure weights at the
regional level.
Regional Prices

England and Wales: tax year ending 2016 (link)
• The admin-based income statistics (ABIS) bring together data from the Pay As You
Earn (PAYE) and benefit systems to derive estimates of net and gross income.
• Please note these statistics are work in progress and both the income measure
and coverage are currently incomplete.
• However, the ABIS do demonstrate the future potential of administrative data
sources to produce detailed small area income statistics.
Admin-based income statistics

This project has received funding from the European Union’s Horizon 2020 research and innovation programme under grant agreement No 727058
Understanding territorial inequality across and wit
“regions”
Ian Smith
ONS Economic Forum Spring 2019- Friday 1st March

The COHSMO project
• EU funded under Horizon 2020 programme
– Teams from: Greece, Denmark, Austria, Italy, Poland,
Lithuania and the UK.
– Mixed methods
• Big questions:
– Can we detect a ‘new European social model’ in the ways
that “services of general economic interest” are designed
and delivered within‘places’?
– How are these processes geared up to reduce
spatial/territorial inequality?
• Context matters:
– Institutional path dependency (between nationalcontexts)
– Variability due to location within ‘urbanisation’structures
(urban-rural differences)
– Variability due to economic context/outcomes
– Variability in collective efficacy in places

Measuring inequality – the context for a new
social model
• Some of the technical/ conceptual
issues
• Snapshots of territorial unevenness
• What are the plausible means of
reducing unevenness within ‘regions’
in Provincial England?

What is a ‘region’ in England?
• Sub-national administration in
Provincial England 1996-now
– Creeping, incremental boundary
changes and experimentation
– No ‘regions’ (as such) since 2010
– Patchwork of counties, combined
authorities, unitaries, personal
networks

Modifiable Areal Unit (Problems)
• For what spatial units? What regions?

Productivity gaps…. and variability
Figure 4.1: AverageGVAper employee (NUTS3averagewithin
region) 2001-15
Figure 4.2: Coefficient ofvariation ofGVAper employee by
region 2001-2015
ONS: Regional Gross Value Added (Income Approach) by Local Authority in England

General increase in polarisation (in incomes)
Source:ONS

This project has received funding from the European Union’s Horizon 2020 research and innovationprogramme
Spending in local government (and austerity)
Derived from data constructed by Amin-Smith et al (2016) Real-terms change in local
government service spending by LA decile of grant dependence, 2009-10 to 2016-17
[https://www.ifs.org.uk/publications/8781]
under grant agreement No 727058

Understanding spatial unevenness of outcomes

If this is the right measure….

This project has received funding from the European Union’s Horizon 2020 research and innovationprogramme
But if you are interested in “service deserts”?
https://www.powertochange.org.uk/research/using-indices-multiple-deprivation-
much-just-top-line-indicator/
under grant agreement No 727058

Sometimes disadvantage might disappear….?

If you get it wrong…..?

So what is the storyline here?
• There is unevenness in the production of
wealth (and there is no reason to think this
is different in 2019)
• This is associated with a complicated
context of:
– spatial disadvantage across Provincial England [ie
the problems are different]; and,
– The fiscal means of tackling this unevenness are
also unevenly spread – and being made less
progressive since 2010?
• We are asking whether 'territorial cohesion'-
like approach can deal with this...

Territorial cohesion is…..
• A policy concept that means many things
• We are exploring ‘territorial cohesion’ as:
– A [joined-up] way of ‘doing’ sub-national policy
– A outcome of policy that (attempts to
explicitly) reduce spatial unevenness
– ‘One Size’ is unlikely to fit all

Plausible ways of reducing territorial unevenne
in Provincial England?
• Neighbourhood Planning
• “Asset” transfer (to community groups)
• Promoting social business/ social
entrepreneurship
• Skills, training and employment
• These are not without issues….
• There is a need to have locally specific
(place-based) solutions

Questions (for the UK COHSMO team)?
• Ian Smith – ian5.smith@uwe.ac.uk

www.cohsmo.aau.dk

Economic Forum, 1 March 2019 University of the West of England, Bristol

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