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![‘If the […] economy was quite static, with very few
new products introduced, very little quality
improvement in existing products, little change in
consumers' income, and very small and infrequent
changes in the relative prices of goods and
services, measuring changes in the cost of living
would be conceptually quite easy and its
implementation a matter of technical detail ...’
Boskin Commission final report, Toward A More Accurate
Measure Of The Cost Of Living (1996)
5](https://image.slidesharecdn.com/economicforumslides31jan17-170131094108/75/Economic-Forum-31-January-2017-5-2048.jpg)
![“Although better use of [data] has the potential to
transform the provision of economic statistics, ONS will
need to build up its capability to handle such data. This
will take some time and will require not only recruitment of
a cadre of data scientists but also active learning and
experimentation. That can be facilitated through
collaboration with relevant partners – in academia, the
private and public sectors, and internationally.”
- Independent Review of Economic Statistics, Professor Sir Charles Bean, 2016, p.11
Bean Review](https://image.slidesharecdn.com/economicforumslides31jan17-170131094108/75/Economic-Forum-31-January-2017-77-2048.jpg)
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Economic Forum: 31 January 2017
The document outlines the agenda and content of the ONS Economic Forum held on January 31, 2017, focusing on the future of consumer price statistics, changes in inflation measurement, and the introduction of new economic publications. Key discussions included the ongoing review of the Retail Price Index (RPI), the increased use of Consumer Prices Index including owner-occupier housing costs (CPIH), and improvements to the publication of economic statistics. Additionally, data from various economic sectors, including productivity, labor market, and prices, were presented as part of the forum's broader discussions.
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Economic Forum: 31 January 2017
- 1. ONS Economic Forum 31January 2017 Email: ONS.economic.forum@ons.gov.uk Twitter: @ONS #ONSeconomy WIFI code for Glaziers Hall: glaziershallwifi and password: event123 1
- 2. Agenda Time Item Speaker 10:00– 10:10 Welcome and introduction Jonathan Athow 10:10 – 11:00 Special topic: Shaping the future of consumer price statistics Jonathan Athow 11:00 – 11:15 Networking refreshment break 11:15 – 11:25 Theme days, publications and GDP figures Ed Palmer 11:25 – 11:45 Overview of data from January’s theme days: Short-term Indicators Daniel Ollerenshaw Prices Chris Watkins Labour Market Sunny Sidhu Productivity Sebnem Oguz 11:45 – 12:00 What’s next… 2
- 3. Introduction and welcome JonathanAthow Deputy National Statistician, Economic Statistics 3
- 4. Shaping the futureof consumer price statistics Jonathan Athow Deputy National Statistician, Economic Statistics 4
- 5. ‘If the […]economy was quite static, with very few new products introduced, very little quality improvement in existing products, little change in consumers' income, and very small and infrequent changes in the relative prices of goods and services, measuring changes in the cost of living would be conceptually quite easy and its implementation a matter of technical detail ...’ Boskin Commission final report, Toward A More Accurate Measure Of The Cost Of Living (1996) 5
- 6. What I wantto cover… • Background and recent history • RPI (Retail Price Index) • CPIH (Consumer Price Index including Owner Occupiers’ Housing (OOH) costs) • OOH comparisons • ‘Household’ measure • Future landscape 6
- 7. Introducing the cast… •CPI: internationally comparable measure of inflation based on EU-wide rules. Adopted as the Bank of England’s inflation target in 2004. • CPIH: CPI including owner-occupiers’ housing costs. Launched in 2013, with data available from 2005. National Statistics status suspended in 2014. • RPI: long-standing measure of inflation, with data available from 1947. No longer a National Statistic. 7
- 8. Recent developments Jan ‘13:RPI loses Nat’l Stats badge May ‘13: Paul Johnson begins review Jan ‘15: Johnson review published Late ‘15: Consultation on Johnson proposals Mar ‘17: Introduce changes Nov ‘16: ONS statement on future plans Mar ‘16: ONS announces direction of travel 8
- 9. Johnson review messages •RPI is weak, but still required • Too many measures of inflation… • …CPIH should become the main measure • ONS should explore a ‘household’ index 9
- 10. RPI: the officialview “the methods used to produce the RPI are not consistent with internationally recognised best practices” (UK Statistics Authority, March 2013) “the RPI is known to be statistically flawed” (Paul Johnson’s review, January 2015) “the RPI is not a good measure of inflation... I strongly discourage the use of RPI…” (National Statistician, March 2016) 10
- 11. Problems with theRPI Use of the ‘Carli’ formula Excludes some households (richest households and the poorest-pensioner households) Housing includes both mortgage interest payments and house prices Legislation limits the scope of the ONS to develop the RPI 11
- 12. But still aneed for RPI • Used in many long-standing contracts (e.g. gilts) • And therefore we will publish the minimum of RPI-related data necessary • …and undertake routine changes (e.g. basket updates) • …but we will not ‘invest’ in improving it 12
- 13.
- 14. Too many measuresof inflation • From March 2017, we will discontinue: • RPIJ • Tax and Price Index (TPI) • RPI excluding mortgage index payments and indirect taxes (RPIY) • RPI Pensioners’ indices 14
- 15. CPIH • Includes owneroccupiers’ housing costs (not in CPI) • Will include Council Tax from March 2017 • Not constrained by international regulations – CPI is same thing as HICP • Not subject to the same legislative constraints as RPI • In ‘normal times’ expect CPIH to be around 0.3 percentage points above CPI 15
- 16. Owner-occupiers’ housing costs •Costs of ‘housing services’: owning, maintaining and living in one’s own home. • Distinct from the cost of purchasing a house… • …which is partly an accumulation of wealth and partly for housing services • No single defined measure, in part as it depends on what the target is 16
- 17. Different approaches toOOH • Method is widely debated • ONS looks at 3 approaches available, measured at 3 different points: • Used - rental equivalence • Paid - payments approach (experimental) • Acquired – net acquisitions (experimental) • CPIH uses rental equivalence: valuing ‘housing services’ according to the cost to rent an equivalent property 17
- 18. Why rental equivalence •Payments approach • Consumer prices index aims to measure consumption, and interest payments represent the cost of borrowing money rather than the cost of consumption • Net acquisitions • Due to the lack of available data, the methodology used does not separate between the land and house price, and therefore there will be some measure of asset price included. • Rental equivalence • Measures the consumption of OOH services 18
- 19. CPIH as NationalStatistic • Lost designation in 2014: problems with how private rents were used in ‘rental equivalence’ • Problem fixed in 2015, but wider requirements to get ‘badge’ back: • Strengthen QA • Better explain methodology • Monitor behaviour and compare to other data & methods • Range of material now published 19
- 20. OOH in recentpast -20 -15 -10 -5 0 5 10 15 Jan-06 Jun-06 Nov-06 Apr-07 Sep-07 Feb-08 Jul-08 Dec-08 May-09 Oct-09 Mar-10 Aug-10 Jan-11 Jun-11 Nov-11 Apr-12 Sep-12 Feb-13 Jul-13 Dec-13 May-14 Oct-14 Mar-15 Aug-15 Jan-16 Jun-16 Annualgrowth rate (per cent) OOH (NA) OOH (Payments) OOH (RE) 20
- 21. Effect of differentOOH measures -2 -1 0 1 2 3 4 5 6 Annualgrowthrate (per cent) CPIH CPI-H(Payments 1) CPI-H(Payments 2) CPI-H(NA) 21
- 22. Effect of differentOOH measures 22
- 23. ‘Household’ measure • Developing‘Index of Household Payments’ (likely to be named as Household Cost Index) • Asks the question of how households feel/perceive prices change • Look at payments households are making (rather than other ways of measuring prices) • Households weighted equally rather than weighting by expenditure • Different household types experience of inflation • Work to be done, but aim to have first estimates by end of 2017 23
- 24. Future landscape • Headlineinflation • Most comprehensive measure CPIH • Internationally comparable • Inflation target CPI • Experience/perception of inflation • Use and development will depend on final design and properties Household Cost Index (HCI) • Legacy measure • Use discouraged RPI 24
- 25. Summary changes inMarch • CPIH – as most comprehensive measure – becomes the headline measure • will incorporate council tax • time series will be revised back to 2005 • Publish the minimum of RPI-related data • Publish additional level of detail published for CPI and CPIH (COICOP5) 25
- 26.
- 27. ONS Economic Forum Email:ONS.economic.forum@ons.gov.uk Twitter: @ONS #ONSeconomy WIFI code for Glaziers Hall: glaziershallwifi and password: event123 27
- 28. Theme days, publicationsand GDP figures Ed Palmer Deputy Chief Economist 28
- 29. What we aregoing to cover • How we tell the story: changes to how we publish economic statistics and other analysis and data • What the story says: an overview of the latest data 29
- 30. Changes to thepublication schedule for our economic statistics • ONS recently reviewed its approach to publishing economic statistics. • Concluded that a more joined-up and consistent approach would help users. • We now have a “theme days” where related statistics are released together. • This allows ONS to present a more coherent and consistent picture of UK economic activity, and support public discussion about the UK economy. 30
- 31. January’s “theme day”timetable 31 Theme Date Data included Productivity (quarterly) 6 January • Labour and public service productivity • Regional measures Short term indicators 11 January • Construction • Production • Trade • Turnover in UK production & GB services industries (TOPSI) Prices 17 January • Consumer Price Inflation (CPI) • Producer Price Inflation (PPI) • Services Producer Price Index (SPPI) (from May) • House Price Index (HPI) • Construction Prices (from February) • Rental prices Labour market 18 January • Unemployment • Claimant count • Wages Retail sales 20 January • Retail sales Public Sector Finances 23 January • Public Sector Finances National Accounts 26 January • Usual estimates given the current timetable • Including, depending on the month in the cycle, Services and Balance of Payments
- 32. A number ofthe theme days will have their own economic commentary … 32
- 33. … and wewill also produce an end of month economic commentary, plus a revamped quarterly Economic Review … 33
- 34. …and new productsat visual.ons.gov.uk 34
- 35. GDP preliminary estimateQ4 2016 35 -7.0 -6.0 -5.0 -4.0 -3.0 -2.0 -1.0 0.0 1.0 2.0 3.0 4.0 -3.5 -3.0 -2.5 -2.0 -1.5 -1.0 -0.5 0.0 0.5 1.0 1.5 2.0 2008 Q1 2008 Q3 2009 Q1 2009 Q3 2010 Q1 2010 Q3 2011 Q1 2011 Q3 2012 Q1 2012 Q3 2013 Q1 2013 Q3 2014 Q1 2014 Q3 2015 Q1 2015 Q3 2016 Q1 2016 Q3 Quarter on quarter GDP growth (LHS) Quarter on previous year's quarter GDP growth (RHS) % %
- 36. International comparison ofGDP Quarterly levels, chained volume measure, 2007=100 36 Source: ONS, Organisation for Economic Co-operation and Development
- 37. Overview of datafrom Short-term Indicators theme day Daniel Ollerenshaw Economic Analysis and Advice 37
- 38. Covers data fromservices, production, construction and UK trade Jan 2010 to Nov 2016, indexed to 100 at 2010 levels, chained volume measures (seasonally adjusted) 90 100 110 120 Nov 10 Nov 11 Nov 12 Nov 13 Nov 14 Nov 15 Nov 16 Services Production Construction
- 39. Strong quarterly growthin retail, motor and travel agencies Combined contributions of retail, motor and travel agencies to total services growth, percentage points, Q4 Combined weight 0 0.1 0.2 0.3 0.4 0.5 0.6 0.7 0.8 Contributionstogrowth Total services growth (Q4) Combined contribution (actual)
- 40. Rising importance ofexports in some manufacturing industries Export share of total manufacturing turnover, non-seasonally adjusted Other manufacturing & repairs Transport equipment Other machinery & equipment Electrical equipment Computer & electronic products Metals Rubber, plastic & non-metallics Pharmaceuticals Chemicals & related products Wood, paper & printing Textiles, clothing & leather Food, beverages & tobacco 0% 10% 20% 30% 40% 50% 60% 70% Nov 2015-Nov 2016 average 2010-2015 average 2000-2005 average
- 41. Growth in housingnew orders New housing construction output and housing new construction orders (2 quarter lag), quarter on previous year growth, chained volume measures -75 -50 -25 0 25 50 75 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 New housing output Housing new orders (2 quarter lag)%
- 42. Summary • Strong services– continued strength of consumer spending • Rising importance of exports for some manufacturing sub-industries • Growth in housing new orders
- 43. Overview of datafrom Prices theme day Chris Watkins Economic Analysis and Advice 43
- 44. Main Points • Inflationcontinued to rise into December 2016. • The depreciation of sterling and the recovery of the oil price have put upward pressure on producer prices. • The increase in producer prices has started to push up some prices faced by consumers.
- 45. Headline measures ofinflation broadly track each other
- 46. The relationship betweenInput PPI components and the sterling exchange rate varies
- 47. Impacts of Crudeoil prices and the exchange rate
- 48. Consumers are nowfacing higher fuel prices
- 49. Food price deflationfor consumers has moderated
- 50. Summary • Producer pricesare now increasing following a sustained period of deflation. • The recovery in the oil price and the depreciation of sterling has driven the increase in producer prices. • Higher producer prices have started to feed into higher consumer prices for some products.
- 51. Overview of datafrom Labour Market theme day Sunny Sidhu Economic Advice & Analysis 51
- 52. Summary of thelabour market • In the three months to November 2016: – Unemployment rate remained steady at 4.8%. – Employment rate remained virtually unchanged at 74.5%. – Inactivity rate increased to 21.7% – Average weekly earnings for employees in Great Britain grew by 2.8% including bonuses and by 2.7% excluding bonuses (MoY).
- 53. Indicators of sparecapacity -4 -2 0 2 4 6 8 10 12 % Part time could not find a FT job Part time share of all Employed Average Hours Worked- Whole Economy Average Hours Worked- FT Unemployment 18-24 Unemployment: Vacancy Ratio Unemployment Most Recent Data Year ago Standardised Units +/- 2001-2007 average
- 54. Resignations and Vacancies 0 20 40 60 80 100 120 140 160 180 200 20032004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 Index 2012=100 Resignations All vacancies
- 55. Real Wage Growth 1.8 2.9 0.3 4.2 1.7 2.42.4 -1.2 2.1 -2.0 -1.0 0.0 1.0 2.0 3.0 4.0 5.0 2002-072008-14 2015-16 % CPI Growth in AWE (Total Pay) Growth in Real Wages
- 56. Summary • Spare capacityin the labour market continues to narrow. • Confidence in the labour market remained resilient up to and after the EU Referendum. • Increasing CPI inflation being offset by nominal wage growth - real wage growth remains stable.
- 57. Overview of datafrom Productivity theme day Sebnem Oguz Population and Public Policy 57
- 58. The productivity puzzleshows little sign of ending 60 70 80 90 100 110 120 130 140 1994 Q3 1996 Q3 1998 Q3 2000 Q3 2002 Q3 2004 Q3 2006 Q3 2008 Q3 2010 Q3 2012 Q3 2014 Q3 2016 Q3 Index, Quarter 4 2007 = 100 Output per hour Output per worker Output per hour (trend) Output per worker (trend) Figure 1: Trends and actual output per hour and output per worker Seasonally adjusted, Quarter 1 (Jan to Mar) 1994 to Quarter 3 (July to Sept) 2016, UK
- 59. The productivity puzzleshows little sign of ending Figure 2: Average annual growth of output per hour worked, UK Seasonally adjusted, whole economy and selected industries, Quarter 3 (July to Sept) 2016 and Quarter 1 (Jan to Mar) 1998 to Quarter 1 (Jan to Mar) 2008 average
- 60. Output per hourworked varies considerably across the UK Figure 3: Nominal GVA per hour worked - NUTS 1 country and region, workplace based estimates, 2015
- 61. Variation within theregions Figure 4: GVA per hour worked - North of England - highest and lowest ranking NUTS3 sub-regions, 2015 Figure 5: GVA per hour worked - Midlands - highest and lowest ranking NUTS3 sub-regions, 2015
- 62. Firm level productivity Figure6: Median GVA per worker by Industry – London and the Yorkshire and the Humber, 2014 0 10 20 30 40 50 60 70 80 90 Manufacturing Construction Wholesale & Retail trade; repair motor vehicles Accommodation & Food services Information & Communication Professional, scientific & technical Administrative & Support Services Thousands (£) LONDON Y & H
- 63. Firm level productivity Figure7: Distribution of firm level productivity (GVA per worker) in the non- financial business economy – NUTS1 Regions, 2014
- 64. Management practices andproductivity among manufacturing business in Great Britain: Experimental estimates, 2015 Figure 8: Labour productivity and management practice scores by business Types (manufacturing industry) Great Britain, 2015 0.0 0.1 0.2 0.3 0.4 0.5 0.6 0.7 0.8 0 10 20 30 40 50 60 Management scoreOutput per worker (£000s) Output per worker (£000s) Management score
- 65. Management practices andproductivity among manufacturing business in Great Britain: Experimental estimates, 2015 Figure 9: Distribution of manufacturing businesses by ownership types – Great Britain, 2015 Multinationals (16.4%) Family-Owned (63.7%) Not Family-Owned (20%)
- 66. Summary • UK labourproductivity edges up in 2016 but still weak • Significant variation in labour productivity across the UK regions and sub-regions • Significant relationship between management practices and firm level productivity 66
- 67. What’s next … RichardHeys Deputy Chief Economist 67
- 68. ESCOE RESEARCH PROGRAMME National Accountsand Beyond GDP 1.1 Historical National Accounts data 1.2 Measuring GDP at different publication horizons 1.3 Democratic measures of income 1.4 Modelling and communicating data uncertainty Productivity and the Modern Economy 2.1 Measuring activity in services sectors 2.2 Measurement issues in the modern economy 2.3 Sectoral productivity estimates 2.4 Granularity in trade in value-added data for key sectors 2.5 Developing firm level micro data for productivity analysis Regional and Labour Market Statistics 3.1 Using administrative data to understand migration 3.2 Using administrative and big data to improve labour market statistics 3.3 Regional nowcasting in the UK 3.4 Improving the quality of regional economic indicators Other Valuing Economic Statistics
- 69. Economic Forum –What’s Next? UK Trade Developments and Priorities 31 January 2017 Richard Heys
- 70. Outline 1. Background 2. Summaryof recent developments 3. User priorities 4. Development plans 70
- 71. UK Trade Statistics- Background • National Statistics de-designation November 2014 • Reassessment published May 2015 with 13 requirements • Published trade development plan in March 2016 for consultation • EU referendum 23 June 2016 leading to high demand for UK Trade statistics • Recruitment of trade analysts across Whitehall and beyond • Expect demand to intensify • User engagement ongoing to assess requirements and priorities • UK Trade statistical solution within ONS must cope with a completely new demand for data and analysis on top of traditional NA and BoP requirements
- 72. UK Trade Statistics– Recent Developments • New monthly UK Trade statistical bulletin within the Short Term Economic Indicators Theme Day • Enhanced commentary and analysis, particularly regarding movements in the value of sterling and effects on trade • Publication of more geographic detail on annual basis • Production Process Review leading to improvements in quality assurance • Recruitment of analysts, operational and development resources • Working in partnership with other experts on Trade in Value Added and Trade Asymmetries
- 73. Quality, timeliness and trust Pace of response Granular statisticsand analysis Mode of supply Price effects Erratic trade Trade in value added Trade asymmetries 73 UK Trade Statistics – User Priorities
- 74. UK Trade Statistics– Development Plans • Established UK Trade project within Economic Statistics Transformation Programme to develop processes, systems and enhance analytical capability • Looking into existing and new data sources • Designing new systems fit for new demanding operational and user requirements • Building capability and working in partnership (e.g. Economic Statistics Centre of Excellence) • Publish revised development plan (provisional date 10 Feb 2017)
- 75. UK Trade Developmentsand Priorities Contacts: Richard.Heys@ons.gov.uk Adrian.Chesson@ons.gov.uk Hannah.Finselbach@ons.gov.uk Katherine.Kent@ons.gov.uk
- 76.
- 77. “Although better useof [data] has the potential to transform the provision of economic statistics, ONS will need to build up its capability to handle such data. This will take some time and will require not only recruitment of a cadre of data scientists but also active learning and experimentation. That can be facilitated through collaboration with relevant partners – in academia, the private and public sectors, and internationally.” - Independent Review of Economic Statistics, Professor Sir Charles Bean, 2016, p.11 Bean Review
- 78. Bean Review: “ActiveLearning… Apprenticeship in Data Analytics •Two-year vocational programme •Welsh Government scheme •Level 4 Diploma in Data Analytics •Over 130 applications •Eight apprentices from 5 December 2016 MSc Data Analytics for Government •Dedicated Data Science pathway •First intake in September 2017 •Multiple Academic partners •Framework published 5th December 2016, partner applications close 8th February Data Science Accelerator •3-month programme •Open to all Public Sector staff •Run in conjunction with GDS and GO-Science •Newport “hub” @ Data Science Campus
- 79. …and Experimentation" Research Teams •Firstresearch team launched in Sept 2016 •22 FTE as of 1st February •5 Research projects underway •New MD, Tom Smith joined on 26th Jan. •Official launch on 27 March 2017 Partnerships •MoUs agreed with multiple research partners including 5 universities, research institutes (e.g. Alan Turing Institute) and international stats authorities (Stats Netherlands). •Collaborations with national and devolved government including DEFRA, DCMS, DFID and Welsh Government.
- 80.
- 81. What’s Next… Richard Heys DeputyChief Economist 81
- 82. Future of theEconomic Forums 82
- 83. ONS Economic Forum Email:ONS.economic.forum@ons.gov.uk Twitter: @ONS #ONSeconomy WIFI code for Glaziers Hall: glaziershallwifi and password: event123 83
Editor's Notes
- #30 … between us we will cover “how” and “what”. Happy to take questions after the presentations, also around after the formal end of the event for further discussion – interested to get views on what we have said, what we produce and how we communicate.
- #31 On the “how”: last year we reviewed our approach for publishing economic statistics, decided that we wanted to avoid a “staccato” approach of, for example, having different labour publications happening on different days during a month. Therefore introduced “theme days” to bring together statistics for a particular topic into a single day. Improves quality, we can give a clearer economic narrative of what is happening, easier for users interested in a particular topic, believe this will help the public debate.
- #32 Example timetable for January. Seven theme days cover our main economic statistics releases. Last week’s highlight was National Accounts theme day.
- #33 which will look a bit like this: This is the first theme day economic commentary on short-term indicators from 11 January. So we combine publication of the bulletins and datasets; economic commentary and a quote from the lead statistician on each theme day.
- #34 We have seven theme days each month, we also have an end-of-month summary. This will generally be published on the same day as our estimates of GDP so will include analysis of GDP as well as a summary of the stories from the theme day economic commentaries. So January’s was published on Thursday, here are a couple of screenshots of it. Some of you are familiar with the Economic Review, this is now quarterly, first of the new version will be in April, will contain in-depth analytical insight and some news about what we are doing in ONS to transform our economic statistics work.
- #35 Lastly on the “how”, we also have new products on our visual.ons website. Strapline for our visual website is: “official data, new light” – aims to present some of our data in fresh and interesting ways. Examples: gender pay gap calculator, GDP and events in history. Also our Dashboard which puts in one place graphs and data to assess the UK post-referendum economy. Have a look, give us your feedback.
- #36 And now for the “what”. We will talk through the highlights from the data released this month that is covered in our new commentaries: I will start with the preliminary estimate for Q4 GDP released on Thursday: The UK economy continued to grow by 0.6% in Q4 2016, the same rate as the previous two quarters. The sustained nature of recent economic growth means that GDP has grown 16.1% since the trough of the economic downturn in 2009, and is currently 8.7% higher than the pre-downturn level of output in Q1 2008. Today’s data also complete the picture for 2016 as a whole – this shows GDP grew by 2.0% in 2016 (average over the year), close to the 2.2% growth seen in 2015, but some way below the average rate of calendar year GDP growth in the decade prior to the downturn (2.9%). Outturn growth was also slightly lower than the average of independent forecasts made at the start of 2016, which was 2.2%. Over the calendar year, the services, production and construction industries grew by 2.8%, 1.1% and 1.4% respectively. Will say a bit more about different industries later.
- #37 How does the UK’s performance compare internationally? Slide compares the level of UK GDP against a selection of G7 economies. Comparing Quarter 3 2016 with Quarter 3 2015, UK growth was similar to that of Germany and the USA, while it was higher than that in France, Japan and Italy. Looking over a longer time period shows that the USA and Canada have achieved slightly higher levels of GDP relative to their respective pre-downturn peak levels, however, this partly reflects the fact that output fell by slightly smaller amounts during the economic downturn in 2008 to 2009 compared with the UK. Now return to UK economy and hand over to colleagues to consider it in more depth. Dan.
- #39 Continued strength of services Blips in production due to unusual timing of oil field maintenance (confuses seasonal adjustment). Flat on the quarter. Subdued construction activity (although this is against a backdrop of strong growth from early-2013 to early-2015). New housing has remained strong. Graph shows data up to Nov in each case (Dec data for production and construction are out on the 10th Feb, IoS just released) Services: 79%, prod: 15%, cons: 6% (of GDP)
- #40 Stories: Retail continues trend of very robust consumer spending patterns. Also follows strong month on year growth in consumer borrowing Motor: strong car sales corroborated by SMMT - Travel agencies: broad based strength, corroborated by Association of British Travel Agents Ask Andy about difference between retail sales in IoS and the standalone retail sales publication
- #41 This tallies with recent trade data which shows strength in goods exports (10.6% increase when comparing the latest 3 months with those 3 months last year). Data on export proportions of all industries is published in the latest IoP bulletin (from MBS – no EU/non-EU split as far as I’m aware) Relationship doesn’t exist across the board – shouldn’t draw sweeping conclusions from this.
- #42 New orders: the value of new (legally binding) contracts for future construction work On the graph new orders has been shifted two quarters to the right Recent strength in housing new orders implies that there will be an expansion in new housing output in the near future. Idea of magnitude: housing accounts for around 20% of total construction
- #53 Unemployment rate remained steady at 4.8%. Employment rate remained virtually unchanged at 74.5%. Inactivity rate increased to 21.7% Average weekly earnings for employees in Great Britain grew by 2.8% including bonuses and by 2.7% excluding bonuses (MoY).
- #54 The data shows a range of measures which can be used to judge the degree of spare capacity within the Labour market using LFS data. . Blue dots - which indicate the most recent observation – with observations to the right of the axis indicate a greater degree of spare capacity than average over the period of 2001 -2007 whilst points to the left of the axis indicate lower than average spare capacity. Red triangles indicate the variables’ value a year ago. While most of the indicators have shown a shift to the left over the past twelve months, indicating that the labour market continues to tighten, the proportion of part-time workers who couldn’t find a full-time job is still markedly above the long-run average.
- #55 This chart shows the number of job-to-job resignations, also known as the “take this job and shove it indicator”, - I would like to thank the FT for that , and the number of vacancies. During the economic downturn, the number of resignations fell, as the uncertainty within the labour market, including the fall in the number of vacancies, made people more hesitant to resign and move to another job. However, both indicators have been moving at an upward trend since mid-2012, showing that as economic conditions improved, and the number of vacancies increased, people felt more confident in moving to another job. According to the latest data, growth in the number of vacancies has flattened somewhat over the recent two quarters, that is Q3 and Q4 2016, while the number of resignations in Q3 2016 showed a sharp uptick, which would indicate that employees still remain relatively confident about the labour market post-EU Referendum.
- #56 As the slack in the labour market continues to narrow, this could be partly attributing to the pickup of average weekly earnings over the past several years. As you can see from the chart, between the period 2015 and 2016, the story of real wage growth was more focused on low CPI inflation rather then strong nominal wage growth, with average real wages growing by 2.1% over the period. In comparison, the pre-crisis period of 2002 and 2007, the story was more focused on strong nominal wage growth, averaging 4.2% compared to CPI inflation of 1.8%, leading to average real wages growing by 2.4%. At this current point in time, while the CPI inflation rate has picked-up following the depreciation of the sterling in June 2016, real wages have remained stable, as the higher CPI inflation rate is being offset by higher nominal wage growth.
- #82 Registration has now closed Over 200 delegates registered Exciting line up of key speakers – Martine Durand, OECD, Silke Stepel-Weber, Eurostat , Andrew Blake, The Alan Turing Institute, Senior Academics Talk from ESCoE and Data Science Directors setting out their stalls Student competition – open to postgraduate and undergraduate students interested in a career as an economic – 500 words outlining how the conference will benefit Media session – ‘In conversation with’ – Sir Dave Ramsden and Kamal Ahmed, Chris Giles and Stephanie Flanders After dinner speaker - Cabinet Secretary for Finance and Local Government, Mark Drakeford AM,