Read on Twitter
Thread exclusively for nerds On UK GDP double deflation....
.... and why this is bad news for the measured productivity of lawyers and management consultants
but good news for telecoms companies
1/
The ONS today published its first estimates of UK GDP volumne based on double deflation (ie you measure the volume of inputs for each industry and outputs)
Doesn't make much difference to overall GDP trends, but it does to industry controibutions
https://www.ons.gov.uk/economy/nationalaccounts/uksectoraccounts/articles/producinganalternativeapproachtogdpusingexperimentaldoubledeflationestimates/2020-11-02
2/
Doesn't make much difference to overall GDP trends, but it does to industry controibutions
https://www.ons.gov.uk/economy/nationalaccounts/uksectoraccounts/articles/producinganalternativeapproachtogdpusingexperimentaldoubledeflationestimates/2020-11-02
2/
But the big change - which has been flagged for over 2 years is that the ONS has been underestimating the output of the telecoms industry significantly because it did not recognise how much output prices have fallen
3/ https://www.ft.com/content/abc14c66-fb78-11e7-a492-2c9be7f3120a
3/ https://www.ft.com/content/abc14c66-fb78-11e7-a492-2c9be7f3120a
This raises the measured output of telecoms companies
4/
4/
Correspondingly, because other sectors who use internet and telecoms a lot have lower value added - this has quite an effect on professional services and the finance sector
5/
5/
So, when we did stories saying five sectors were responsibility for the UK's post 2008 productivity crisis:
Banking
Telecoms
Electricity and gas
Legal services
Management consultancy
Now- make that four - telecoms will be exonerated
6/
https://www.ft.com/content/a0cbe742-13a4-11e7-b0c1-37e417ee6c76
Banking
Telecoms
Electricity and gas
Legal services
Management consultancy
Now- make that four - telecoms will be exonerated
6/
https://www.ft.com/content/a0cbe742-13a4-11e7-b0c1-37e417ee6c76
And the slowdown in productivity growth in
Legal services
Management consultancy and
Banking
will be correspondingly higher
Haven't got the full data yet - so can't say how much, but it will be significant when ONS put this experimental data into the official releases
ENDS
Legal services
Management consultancy and
Banking
will be correspondingly higher
Haven't got the full data yet - so can't say how much, but it will be significant when ONS put this experimental data into the official releases
ENDS
I apologise for those with more normal interests for this nerdy thread
