The UK productivity crisis is not as severe as previously thought
The National Bureau of Statistics of the United Kingdom stated that since the financial crisis, the UK’s productivity crisis has not been as severe as previously feared, and announced a major revision of its economic analysis driven by the growth of the telecommunications industry.
The National Bureau of Statistics of the United Kingdom raised its estimate of real GDP growth from 2010 to 2019 on Monday, but found that economic growth was lower than expected from 1998 to 2007.
therefore,”Productivity conundrumAccording to Josh Martin, a statistician at the National Bureau of Statistics in the United Kingdom, “Or the slowdown in hourly worker output growth is smaller than earlier estimates.
Previous data showed that productivity growth in all advanced economies has slowed after the financial crisis, with the UK being the worst affected, triggering concerns about the country’s long-term economic and public financial growth.
However, the growth of the telecommunications sector between 1997 and 2018 “significantly” exceeded earlier expectations, and the productivity growth rate was revised from 5.7% over the same period to 25% per year. The slowdown in growth before and after the financial crisis was revised downward.
According to Matthew Evans, head of marketing at TechUK, the Technology Trade Association, these figures “prove the progress made by the British telecommunications industry.”
He added: “Ensuring the launch of all-fiber and 5G in the future is essential for the digital-led recovery from the pandemic and ensuring the future resilience of the UK economy”.
The updated ONS calculation will be implemented in the official data in the fall. It is based on a better estimate of telecom prices, which reflects the rapid changes in quality improvement throughout the industry.
It said the data showed that “the industry has advanced rapidly in the past two decades.”
The revised calculation challenges the previous Learn The telecommunications industry is the main factor leading to the slowdown in UK productivity growth.
The performance of the management consulting industry has also been revised upwards. Tamzen Isacsson, CEO of the Management Consulting Association, said this reflects the trend of digital technology in the past decade.
“Last year, the shift to remote work has further improved our work efficiency and reduced unnecessary travel, because clients recognize that consultants can deliver successful results virtually,” she said.
The slowdown in the productivity of the financial services industry after 2009 is still “a feature of the new data.”
According to the National Bureau of Statistics of the United Kingdom, the average annual GDP growth rate from 1998 to 2007 was 2.7%, lower than the previous estimate of 2.9%. But between 2010 and 2019, it increased by 0.1 percentage point to 2.0%.
The new data is calculated using the “double deflation method” instead of the current single deflation method, which separately considers the different price and quantity changes of inputs and outputs in the production process of an industry.
Bart Van Acker, managing director of the research institute Productivity Institute, said that the change in calculation method is “a good thing” and “it should have happened long ago.”
The UK National Bureau of Statistics pointed out that although the UK productivity problem is not as serious as previously thought, it “still exists” in the revised data.