What to do about British manufacturing? There is hardly a politician in the country who hasn’t called for the sector to get a boost. But the Office for National Statistics is set to stress today that popular perceptions manufacturing is disappearing from the UK are wide of the mark.
New analysis, to be presented by ONS chief economist Joe Grice at a conference on the changing shape of manufacturing, will focus on the sector’s move up the value chain despite an unquestioned reduction in employee numbers.
(c) Getty Images
With housing never off the front pages, you’d expect housing statistics to be an area Britain would excel.
It turns out that isn’t quite the case.
Last November, in response to demands for a measure of inflation which included the costs of housing services associated with owning, maintaining and living in one’s own home, the ONS introduced a new index called the CPIH.
It used a measure called rental equivalence – the rent someone could expect to pay to live in an equivalent home – as a proxy for the costs faced by the owner.
But today, less than a year later, the UK Statistics Agency announced it has stripped the CPIH of status as an national statistic (the top rank of official statistics)* due to methodological concerns (PDF).
Facts might be sacred, but statistics are somewhat more pliable.
As my colleague Chris Giles revealed this morning, the introduction of global accounting standards in the UK this autumn is set to propel Britain up the savings ratio rankings.
We don’t know yet whether this means Britain’s reputation as a spendthrift nation is on the way out, but there is little doubt statistical changes can shape the way we think about countries.
1. Italy’s 1987 “Il sorpasso”
How do you measure the black economy? Well, when Italy took its first stab at it in 1987, its economy grew by 18 per cent overnight, overtaking Britain in the international rankings and prompting celebrations in Rome.
Italy’s GDP figures today are still adjusted to take account of the notoriously large size of the shadow economy. Estimates put it at between 20 and 25 per cent of its total GDP, compared to an average among industrial countries of some 15 per cent.
Falling inflation, galloping house prices, rising retail sales and growing business confidence are all feeding into expectations for strong economic growth in the UK this year.
With the first quarter GDP numbers due out later this month, expect a tidal wave of discussion and comment about the completeness of the UK recovery. But a timely new paper from the Office for National Statistics offers a good reminder of why GDP on its own is a poor measure of economic well-being.
Take GDP itself as a starting point.
It is calculated without reference to the size of population, so while the headline number has re-bounded, when you consider population growth the picture looks a lot less rosy.
Per person, it has barely budged since 2008. On the official budget forecasts, UK economic output will have risen 8 per cent between the two general elections, per capita gross domestic product is predicted to have increased by only 3.8 per cent. But until this gap narrows, families are unlikely to feel better off.
(c) Getty Images
Anyone who spends time in the capital, where flocks of cyclists are a feature of life, will nod in recognition at the news that the number of people cycling to work in London has doubled over the last decade.
But what’s less known is how far this increase has been driven by the gentrification of inner London. House prices have soared in London’s poorest urban boroughs as 20-somethings and families have stayed in London, rather than moving out to suburbia.
||Change in average house price 2001-2011
||Change in people cycling to work 2001-2011
||IMD ranking (1=most deprived)
(Source: ONS, Land Registry)
Turmoil, panic, retreat: it’s not been a pretty start to the year for emerging market currencies and stock markets. Here, in seven charts, is the story of 2014 so far.
1. The equity context
As the base of the turmoil is the reverse of the post-crisis trend in capital flows, which began last summer on talk of the Fed taper. Money is leaving the emerging markets and returning to Europe. EPFR Global, which tracks investment flows, estimates that emerging market equity outflows hit $12.2bn in January.