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Statistical bulletin: Annual Business Survey, 2011 Regional Results This product is designated as National Statistics

Key points

  • In 2011, the income generated by businesses in the UK Business Economy, less the cost of goods and services used to create this income was estimated to be £977.4 billion. This amount represents the approximate Gross Value Added at basic prices (aGVA).
  • Between 2010 and 2011, aGVA recorded a rise of 5.8% (£53.8 billion). This annual increase is a continuation of the recovery seen between 2009 and 2010; taking aGVA above the level seen in 2008, at the start of the recession.
  • All regions other than the South West saw growth in aGVA between 2010 and 2011, with London, Scotland and the South East contributing most to overall growth.
  • The sub-national picture remains mixed with only 6 out of 12 regions having aGVA above 2008 pre-recession levels.
  • This release includes sizeable revisions to the provisional 2010 Regional results. At the UK Business Economy level aGVA was revised downwards by 1.6% (£14.7 billion). Revisions were driven by changes within the Insurance and Reinsurance sector where a small number of businesses had been returning global figures rather than UK only. Any comparison of results with years prior to 2010 should be undertaken with caution, particularly for Financial and Insurance activities (Section K) and in Scotland.

Overview

This release provides a breakdown of the UK by its regions/countries, showing which have had the greatest impact on the size and growth of the UK Business Economy for 2011. The release covers production, construction, distribution, services and parts of agriculture, which comprise the UK Business Economy. Together these industries represent around two thirds of the whole economy of the UK in terms of Gross Value Added. Public administration and defence, public sector health and education and parts of agriculture and finance make up the difference between the UK Business Economy and the whole economy.

The overall UK figures published in this 2011 regional release are the same as those in the ABS 2011 Revised Results (national level) release, published on 13 June 2013. Below the UK Business Economy level, sector totals and changes over time will not match those in the national release. This is because the ABS regional estimates are produced by apportionment of the national results to a local level, with these then being summed to produce regional and sector estimates, while the results in the national publication are based on the industrial activity of the enterprise.  More information can be found in background note 8 of this release.

Estimates published in this release include turnover, purchases, approximate Gross Value Added at basic prices (aGVA) and employment costs. All data are reported at current prices (effect of price changes included). Where the recession is mentioned it refers to the decline in output between early 2008 and late 2009.

One question often asked of the ABS release is ‘how does the measure of aGVA differ from the GVA measure in the Regional Accounts?’ The difference is that the ABS measure does not fully allow for some National Accounts concepts such as taxes, subsidies or income earned in kind and is therefore only approximate. Adjustments for these components are made in the calculation of GVA in the Regional Accounts, which also cover parts of the economy not included in ABS such as the public sector and the whole of agriculture and financial services.

ONS makes every effort to provide informative commentary on the data in this release. Where possible, the commentary draws on evidence from businesses or other sources of information to help explain possible reasons behind the observed changes. However, it is difficult for businesses to provide detailed reasons for movements which are specific to a region, for example, businesses may state a ‘change in the nature of business activity across all business sites’. Consequently, it is not possible for all data movements to be fully explained.

Users should pay careful attention to the revisions policy (1.61 Mb Pdf) for the ABS. This release includes sizeable revisions to the provisional 2010 regional estimates published in July 2012. At the UK Business Economy level aGVA was revised downwards by 1.6% (£14.7 billion). Revisions were driven by changes within the Insurance and Reinsurance sector (SIC 65.1 & 65.2) where a small number of businesses had been returning global figures rather than UK only. In line with the ABS revisions policy the change was only made to 2010 estimates. Any comparison of results with years prior to 2010 should be undertaken with caution, particularly for Financial and Insurance activities (Section K) and in Scotland where the largest impact of the revision was seen.

A mapping tool is available for viewing these results, by region and the UK as a whole. The mapping tool can be used to illustrate how aGVA, turnover, purchases and employment costs have changed across the regions from 2008 to 2011, as well as enabling comparison with other regions.

User engagement

We constantly aim to improve this release and its associated commentary. We would welcome any feedback you might have, and would be particularly interested in knowing how you make use of these data to inform your work. Please contact us via email: abs@ons.gsi.gov.uk or telephone Heather Bovill on +44 (0)1633 455107.

Following the success of last year's business statistics user event a second all-day event, coordinated jointly with the Department for Business, Innovation and Skills (BIS), will take place on 24 September 2013. The event, The Changing Shape of Trade and Investment in the UK, will feature a range of talks from users, producers and suppliers of business trade and investment statistics, not just from central government and the devolved administrations, but also local government, media, business representatives and researchers. More information on how to register for the event can be found on the ABS News Page.

UK Business Economy

In 2011, the income generated by businesses in the UK, less the cost of goods and services used to create this income, was estimated to be £977.4 billion. This amount represents the approximate Gross Value Added at basic prices (aGVA) of the UK Business Economy. Between 2010 and 2011 aGVA increased by 5.8% (£53.8 billion); the second consecutive annual increase, taking it above the level seen in 2008, at the start of the recession.

The recession and recovery described by the ABS between 2008 and 2011 is broadly in line with Gross Domestic Product (GDP) figures published in the National Accounts. Both the ABS aGVA estimates and the National Accounts GDP estimates show a fall between 2008 and 2009 and increases between 2009 and 2010 and between 2010 and 2011.

Services, the largest broad industry group, contributed most to overall growth. Service sector aGVA rose by £20.6 billion (4.1%) between 2010 and 2011, the second consecutive annual increase taking it to £523.6 billion, which is above the level seen in 2008 (see Figure 1).

Figure 1: UK Business Economy (Sections A-S), aGVA by industry sector

Figure 1: UK Business Economy (Sections A-S), aGVA by industry sector
Source: Office for National Statistics

Notes:

  1. Total aGVA for the UK Business economy in the regional release is the same as that published in the national release (June 2013) although the values for the broad industry groups differ. More information can be found in the background notes of the bulletin.

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The regional picture

The industrial composition of regions in the UK varies considerably (see Figure 2). Some regions such as London are heavily services based (around three-quarters of its aGVA in 2011) with only a small amount of value added being generated from production. In comparison Service industries are a much smaller part of the business economy in Wales (less than two-fifths of its aGVA in 2011) with more activity taking place in production. The different mix of industrial activity is one factor which helps explain different regional changes.

Figure 2: UK Business Economy (Sections A-S), industrial composition by region/country, aGVA, 2011

Figure 2: UK Business Economy (Sections A-S), industrial composition by region/country, aGVA, 2011
Source: Office for National Statistics

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All regions other than the South West saw growth in aGVA between 2010 and 2011. The largest three regions in terms of aGVA, London, Scotland and the South East, contributed most to overall growth at the UK Business Economy level.

For the majority of regions 2011 saw the second consecutive year of growth, following widespread falls between 2008 and 2009. Despite this growth the sub-national picture remains mixed with aGVA in half of the UK regions remaining below 2008 pre-recession levels at current prices (see Figure 3).

Figure 3: UK Business Economy (sections A-S), aGVA by region/country

Figure 3: UK Business Economy (sections A-S), aGVA by region/country
Source: Office for National Statistics

Notes:

  1. Data for Scotland between 2009 and 2010 can not be directly compared due to a break in the data series.

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Regional summaries (in order of size of aGVA change)

London

London contributed the most to aGVA growth in the UK Business Economy between 2010 and 2011, increasing by £14.8 billion (7.0%) (see Figure 4). Growth was led by the Service industries (Sections H-S), London’s largest industry group in terms of aGVA, contributing £9.2 billion to total aGVA growth (a rise of 5.8%). The two main sector drivers within the Service industries were Professional, scientific & technical activities (Section M) and Administrative & support service activities (Section N).

As aGVA growth for London in 2011 follows two years of negative growth aGVA remains below that seen in 2008, at the start of the recession.

Scotland

Scotland made the second largest contribution to aGVA growth in the UK Business Economy between 2010 and 2011 increasing by £8.1 billion (9.2%). Scotland has a large base of Production industries (Sections B-E) and this industry group made the largest contribution to the aGVA increase in Scotland. The majority of the increase in production came from strong aGVA growth in Extraction of crude petroleum & natural gas (Division 05) for the second consecutive year, following large falls between 2008 and 2009.

Care should be taken when making comparisons for the Service industries with years prior to 2010 due to a break in the series, particularly for Scotland (see Overview section).

South East

The South East made the third largest contribution to aGVA growth in the UK Business Economy between 2010 and 2011, contributing £6.4 billion (a 4.3% rise for the region). Similar to London, growth has been led by the Service industries (Sections H-S), the South East’s largest broad industry group in terms of aGVA, contributing £3.1 billion to the aGVA increase in the region. The drivers of this aGVA increase differed from those in London, with Information & communication (Section J) and Transport & storage (Section H) contributing the most in the South East.

This was the second consecutive year of positive aGVA growth for the South East, although the growth rate between 2010 and 2011 was slightly below that seen in the previous period. These increases have taken aGVA above the level seen in 2008, at the start of the recession.

South West

The South West was the only region to show a fall in aGVA between 2010 and 2011, driven by a fall in the Service industries (Sections H-S ).

Approximate GVA in the South West increased between 2009 and 2010, taking it above 2008 pre-recession levels, however the subsequent fall has taken aGVA to the lowest level since the series began in 2008.

Figure 4: UK Business Economy (Sections A-S), aGVA change by region/country

Figure 4: UK Business Economy (Sections A-S), aGVA change by region/country
Source: Office for National Statistics

Notes:

  1. Growth in Scotland between 2009 and 2010 is not shown due to a break in the data series.

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Service industries (Sections H-S)

Service turnover for the UK Business Economy increased at a marginally faster rate than purchases between 2010 and 2011 (5.1% compared to 5.0%). However, stock reduction combined with an increase in taxes, both of which decrease the value of aGVA, resulted in aGVA rising by a lower rate (4.1%, £20.6 billion).  For further details on the components of aGVA see background note 9.

2011 saw the second consecutive annual increase in aGVA, with the recent growth rate higher than in the previous period. The level of aGVA in both 2010 and 2011 was above that seen in 2008, at the start of the recession.

The largest contribution to the increase came from Administrative & support service activities (Section N) which increased by £7.3 billion, a 10.3% increase for the section.

All regions other than the East of England and the South West saw increases in aGVA for the Service industries (see Figures 5 and 6). London, the South East and the North West, the three regions with the largest Service sector in terms of 2011 aGVA, made the largest contribution to the Service industries change, although the drivers for growth for each region varied.

Figure 5: Service industries (Sections H-S), aGVA by region/country

Figure 5: Service industries (Sections H-S), aGVA by region/country
Source: Office for National Statistics

Notes:

  1. Data for Scotland between 2009 and 2010 can not be directly compared due to a break in the data series.

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London

London made the largest contribution to the increase in aGVA in Service industries between 2010 and 2011, contributing £9.2 billion, a rise of 5.8% for the region. As at the national level this was the second consecutive annual increase in aGVA with the growth rate between 2010 and 2011 higher than in the previous period. The level of aGVA for Service industries in London is now above that seen in 2008, at the start of the recession.

The four main sector drivers of growth between 2010 and 2011 were Professional, scientific & technical activities (Section M) and Administrative & support service activities (Section N), each contributing £2.3 billion to the increase in London’s aGVA, and Accommodation & food service activities (Section I) and Real estate activities (Section L ), contributing £1.7 and £1.3 billion respectively.

The increase within Professional, scientific & technical activities was driven by Activities of head offices; management consultancy activities (Division 70) and Legal & accounting services (Division 69). For Administrative & support service activities the drivers were Travel agency, tour operator & other reservation service & related activities (Division 79 ) and Office administrative, office support & other business support activities (Division 82).

The increase in Accommodation & food service activities was driven by Food & beverage service activities (Division 56). In London, this industry has shown a second year of strong growth following a decline between 2008 and 2009. There may be a range of reasons for growth within this division. Across the UK some businesses, for example, reported expansion of restaurant chains during 2011 and others stated that sales in 2011 were less affected by snow than in 2010, when adverse weather was reported to have suppressed turnover. In 2011 the hottest April on record is also reported by some to have boosted sales.

UK businesses in general have noted expansion in the rental sector as being a main driver in the increase in Real estate activities (Section L ), as mortgage finance and the requirement for large deposits has remained a barrier to potential buyers.

South East

The South East made the second largest contribution to growth in the Service industries between 2010 and 2011, contributing £3.1 billion to the total aGVA increase, a rise of 3.6% for the region.

The South East is one of only two regions which have recorded three consecutive years of annual growth in the Service industries.

The largest contribution to the increase in aGVA in the Service industries came from Information & communication (Section J) and Transport & storage (Section H).

Information & communication saw an increase in aGVA of £1.8 billion (a 9.1% increase for the region), driven by an increase in Computer programming, consultancy & related activities (Division 62). This increase follows two years of decline for the division and takes aGVA above the level seen in 2008. Several businesses in the South East have reported expansion and cost control as having a positive impact on profit over the period.

Transport & storage saw an increase in aGVA of £1.6 billion (a 16.8% increase for the region), driven by a large increase in aGVA for Land transport & transport via pipelines (Division 49 ).

North West

The North West contributed £2.0 billion to the total aGVA growth in the Service industries between 2010 and 2011, a rise of 4.8% for the region. Along with the South East, the North West is the only region to have recorded three consecutive years of annual growth in the Service industries.

Growth in aGVA between 2010 and 2011 was wide spread across a number of sectors including Administrative & support service activities (Section N), Human health & social work activities (part Section Q), Accommodation & food service activities (Section I) and Professional, scientific & technical activities (Section M ).

The largest increase in aGVA was seen in Administrative & support service activities which increased by £0.7 billion (an 11.3% increase for the region). This was driven by an increase in Services to buildings & landscape activities (Division 81).

Figure 6: Service industries (Sections H-S), aGVA change by region/country

Figure 6: Service industries (Sections H-S), aGVA change by region/country
Source: Office for National Statistics

Notes:

  1. Growth in Scotland between 2009 and 2010 is not shown due to a break in the data series.

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Production industries (Sections B-E)

Production turnover for the UK Business Economy increased at a lower rate than purchases between 2010 and 2011 (7.3% compared to 8.3%). Stock building combined with a fall in taxes, both of which increase the value of aGVA, resulted in aGVA increasing by 9.0% (£18.3 billion). ).  For further details on the components of aGVA see background note 9.

2011 saw the second consecutive year of growth, with the rate increasing in the most recent period. The level of aGVA is now 3.5% higher than the level seen in 2008, at the start of the recession. 

Growth between 2010 and 2011 was driven by Manufacturing (Section C) which increased by £9.5 billion; a 6.9% increase for the sector.

Of the 12 regions, 10 saw an increase in aGVA between 2010 and 2011 with Scotland and Yorkshire & The Humber contributing the most to the changes (Figures 7 and 8).

Figure 7: Production industries (Sections B-E), aGVA by region/country

Figure 7: Production industries (Sections B-E), aGVA by region/country
Source: Office for National Statistics

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Scotland

Scotland contributed £4.4 billion to the total aGVA growth of the Production sector between 2010 to 2011, a rise of 12.5% for the region. Despite being the second consecutive annual year of growth, aGVA for Production industries in Scotland remains below the 2008 level.

The majority of the aGVA increase came from strong aGVA growth in Mining and quarrying (Section B) driven by Extraction of crude petroleum and natural gas (Division 06). This division contributed £3.5 billion to the increase, a rise of 22.3% for the region. The industry has shown a second year of strong growth following a large fall for the period 2008 to 2009, resulting in aGVA rising above the level seen in 2008, at the start of the recession.
 
Businesses reported the continuing increase in oil prices as a major factor in their growth, with the price of oil reaching a peak of $115 per barrel during the period. Reports in general suspected a number of external influences such as the Arab spring uprisings and the Fukushima nuclear disaster have influenced the UK price increases.

Yorkshire & The Humber

Yorkshire & The Humber contributed £3.1 billion to the total aGVA growth of the Production sector between 2010 to 2011, a rise of 20.3% for the region. This was the first year of annual growth following two consecutive annual falls since 2008.

The majority of the aGVA increase came from strong aGVA growth in Manufacturing (Section C) which contributed £2.7 billion to the increase, a rise of 24.0% for the region.

Figure 8: Production industries (Sections B-E), aGVA change by region/country

Figure 8: Production industries (Sections B-E), aGVA change by region/country
Source: Office for National Statistics

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Distribution industries (Section G)

Distribution turnover for the UK Business Economy increased at a lower rate than purchases between 2010 and 2011 (10.2% compared with 11.1%), suppressing aGVA growth which increased by 7.7% (£11.5 billion).

The change in aGVA between 2010 and 2011 is an improvement in the sector’s growth from that between 2009 and 2010, when aGVA fell marginally, and between 2008 and 2009, when it fell substantially. As a result aGVA remains below the level seen in 2008, at the start of the recession. 

Wholesale trade, except of motor vehicles and motorcycles (Division 46) dominated the increase within the sector contributing £8.5 billion to the overall aGVA sector growth; a 14.1% increase for the wholesale industry.

All regions other than the South West and Northern Ireland saw increases in aGVA between 2010 and 2011, with the largest contributions to the UK change coming from London, Scotland and West Midlands (Figures 9 and 10). As at the national level the wholesale industry has driven the increase in aGVA within these regions - with businesses reporting that the continuing increase in oil prices had a major impact on both turnover and purchases.

Figure 9: Distribution industries (Section G), aGVA by region/country

Figure 9: Distribution industries (Section G), aGVA by region/country
Source: Office for National Statistics

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London

London contributed £3.0 billion to the total aGVA growth in the Distribution industries between 2010 and 2011, a rise of 11.8% for the region. This increase follows two consecutive annual falls and leaves aGVA well below its pre-recession level. Wholesale trade, except of motor vehicles and motorcycles (Division 46) contributed £2.5 billion to the growth in London, a rise of 22.0% for the region.

Scotland 

Scotland contributed £2.1 billion to the total aGVA growth in the Distribution industries between 2010 and 2011, a rise of 20.2% for the region. Despite a dip in aGVA growth between 2009 and 2010, aGVA is now above the level seen in 2008. Wholesale trade, except of motor vehicles and motorcycles (Division 46) contributed £1.1 billion, a rise of 35.3% for the region.

West Midlands

The West Midlands contributed £2.0 billion to the total aGVA growth in the Distribution industries between 2010 and 2011, a rise of 17.7% for the region. Unlike the majority of other regions the West Midlands has seen two consecutive years of growth, taking aGVA for Distribution above pre-recession levels. Wholesale trade, except of motor vehicles and motorcycles (Division 46) drove the increases in both years.

Figure 10: Distribution industries (Section G), aGVA change by region/country

Figure 10: Distribution industries (Section G), aGVA change by region/country
Source: Office for National Statistics

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Construction industries (Section F)

Construction turnover for the UK Business Economy increased at a lower rate than purchases between 2010 and 2011 (1.9% compared to 3.7%). However, stock building in this sector, which is added when calculating aGVA, resulted in aGVA increasing by 5.1% (£3.4 billion).
The annual growth seen in 2011 contrasts with the £14.0 billion decrease reported over the 2008 to 2010 period and at £70.4 billion, aGVA remains well below its 2008 aGVA level of £81.0 billion.

All Divisions within Construction saw increases in aGVA with Construction of buildings (Division 41) dominating the increase, contributing £2.0 billion to the overall aGVA sector growth; an 8.9% increase for the Division.

Increases in Construction aGVA were seen in 8 of the 12 regions with all others showing a fall.

The largest increase was for the East Midlands at £1.0 billion, closely followed by the South East at £0.9 billion.  In both regions growth was driven by increases in Construction of buildings (Division 41) and in Specialised construction activities (Division 43 ).

Figure 11: Construction industries (Section F), aGVA by region/country

Figure 11: Construction industries (Section F), aGVA by region/country
Source: Office for National Statistics

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Figure 12: Construction industries (Section F), aGVA change by region/country

Figure 12: Construction industries (Section F), aGVA change by region/country
Source: Office for National Statistics

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Agriculture (support activities), forestry and fishing (Section A)


The ABS covers only forestry, fishing and the support activities for  agriculture within this sector. Commentary on Agriculture (part), forestry and fishing has not been included because the size in terms of economic output, as measured by ABS, is small in comparison to the other sections of the UK Business Economy. However, data for this section can be found in the reference tables linked to this bulletin.

The other parts of the Agriculture sector are covered by the Department for the Environment, Food and Rural Affairs (DEFRA), for example see Chapter 3 Farming Income for farming GVA (table 3.2).

Validation of data returns for 2011 highlighted a small number of businesses within Agriculture (Division 01) which needed to be reclassified resulting in revisions to the 2010 figures. In line with the ABS revisions policy, data for previous years (2008 and 2009) have not been revised and users should therefore take caution when comparing figures over time.

Background notes

  1. Annual Business Survey - ABS

    The Annual Business Survey (ABS), formerly the Annual Business Inquiry part 2 (ABI/2), produced by the Office for National Statistics (ONS), is the key resource for understanding the detailed structure, conduct and performance of businesses across the UK.

    The ABS survey samples approximately 62,000 businesses in Great Britain from a population of over 1.8 million businesses in the sample frame on the Inter-Departmental Business Register (IDBR).

    Data for approximately 9,000 businesses in Northern Ireland  are collected by the Department of Finance and Personnel Northern Ireland and contribute to the UK estimates.

    In this National Statistics publication, a range of estimates are published including turnover, purchases, approximate Gross Value Added at basic prices (aGVA) and employment costs for industry sectors and the UK Business Economy. All data are reported at current prices (effect of price changes included).

    Visit the ABS webpages for more in-depth information about the ABS, plus the latest news on survey changes and developments.

  2. ABS Quality Information

    A Quality and Methodology (QMI) report (149.3 Kb Pdf) for the ABS can be found on the ONS website. The aims of the QMI report is to provide users with a greater understanding of ONS’s statistics, their quality and the methods that are used to produce them, and their uses.

    While the ABS QMI gives an overview of the surveys quality and methods, more detailed information on these and other quality and methodology issues is available in the ABS Technical Report (1.61 Mb Pdf)  published on the ABS webpages.

  3. Selective editing

    When ABS responses are received, checks are undertaken to ensure the information is correct. This is known as editing and validation. Selective editing has been used to validate responses for the first time for the 2011 results using software called SELEKT. SELEKT is a generic selective editing tool which highlights responses which appear to be in error if they fall outside the range of what is expected and have a large influence on key estimates. Those responses with the highest score are prioritised for editing and validation. This increases the efficiency of the editing process by focussing on the responses with the highest impact and importance.

    The introduction of selective editing should at least maintain, if not improve the quality of the ABS results as it should: minimise the bias introduced by processing (removing over-editing); remove non-value adding activities from the process; and focus resources to errors that impact on the results.

    However, the full impact on quality is not yet known. This will continue to be monitored and any updates will be included with future ABS releases. For more information on SELEKT, see Chapter 5 of the ABS Technical Report (1.61 Mb Pdf) .

  4. Uses and users of ABS statistics

    ABS outputs may be used to answer questions such as:

    • how much wealth has been created in a particular industry?

    • has there been a shift in activity from one industrial sector to another, and which industry groups/classes/subclasses are driving the change?

    • are any industries particularly dominant in specific regions or countries of the UK and are there structural changes over time?

    • how productive is a particular industry, such as the chemicals sector, and what is its operating profitability?

    There are a wide range of users that view, download and utilise the ABS data. Key users of the output include:

    National Accounts: Use ABS data to improve the overall quality of the UK National Accounts and the measurement of Gross Domestic Product (GDP). It is a major data input to the production of Input-Output Annual Supply and Use Tables (1.73 Mb Pdf) used to set the annual level of UK GDP. The Supply and Use tables show the sales and purchases relationships between consumers and producers by industry (see section 2.1 of UK National Accounts).

    Indices of Services and Production: Use ABS data to calculate the weights used to produce the indexes, and to calculate the deflation of turnover.

    Eurostat: ABS is the main source of data supplied to Eurostat to meet the requirements of the European Structural Business Statistics (SBS) Regulation. This regulation ensures that key statistics on the structure of businesses are composed in a way which is comparable across Europe. Eurostat use SBS data to inform and monitor European Union policy.

    Scottish Government and the Welsh Government: The financial information is also used by the Scottish Government and the Welsh Government in the compilation of regional and country specific Input-Output tables (e.g. Scottish Input-Output) and Indices of Production (e.g. Welsh Indices of Production). The resulting outputs are used to inform and monitor policy.

    Department for Business, Innovation & Skills (BIS): Use ABS data to assess the structure and performance of UK industries.

    Local Authorities: Data are used for economic research, planning purposes, lobbying and economic strategy development.

    Business consultants: Use these data to understand trends in industry sectors and UK regions.

    Marketing experts: Use these data to undertake demographic mapping and market segmentation.

    Other local and national government departments and bodies, businesses, academics and the general public use these data for research, modelling or forecasting and to track industry trends.

    More detailed information on the uses and users of ABS is available in the ABS Technical Report (1.61 Mb Pdf)  published on the ABS webpages.

  5. ABS user engagement

    We are constantly aiming to improve this release and its associated commentary. We would welcome any feedback you might have, and would be particularly interested in knowing how you make use of these data to inform your work. Please contact us via email: abs@ons.gsi.gov.uk or telephone Heather Bovill on +44 (0)1633 455107.

  6. International comparisons

    International comparisons of structural business statistics are available from Eurostat (for the European Union), and the Organisation for Economic Co-operation and Development (OECD):

    • Eurostat: analysis of the European business economy

    • OECD: follow the link to the structural analysis database, under the industry and services theme.

  7. ABS revisions

    ABS estimates are revised in line with the ABS Revisions Policy. The revisions policy is available in the ABS Technical Report (1.61 Mb Pdf)  to assist users with their understanding of the cycle and frequency of data revisions. Users of this release are strongly advised to read this policy before using the data for research or policy related purposes.

    Planned revisions usually arise from either the receipt of additional data or the correction of errors to existing data by businesses responding to the ABS. Those of notable magnitude will be highlighted and explained.

    Revisions to published ABS results can be expected at the following times in the normal course of operation of the ABS:

    • regional figures for the previous reference year will be revised at the current survey year's data release.

    As an example of the timing and scale of revisions, provisional regional data for 2010 were first published in July 2012, and then revised in the July 2013 release of the 2011 provisional data. Between these two regional releases there was an overall decrease in the 2010 estimate of UK Business Economy turnover of 0.4% (£12.9 billion).

    Revisions to data provide one indication of the reliability of key indicators. A table (115.5 Kb Excel sheet) showing the size of revisions is published alongside the statistical bulletins.

    All other revisions will be regarded as unplanned and will be dealt with by non-standard releases. All revisions will be released in compliance with the same principles as other new information.

  8. Response rates and compliance costs

    The figures in this release are based on an annual survey of businesses. Provisional Regional results for 2011 are based on a response rate of 78.0%. Response rates by different sectors can be found in the Response Rate table in the ABS Quality Measures accompanying the ABS 2011 Revised Results with a summary provided in Table 1.

    Table 1: UK Business Economy, Sections A-S Response Rates by Sector

    %
    Standard Industrial Classification (Revised 2007) Sector Description 2010 2011
           
    A-S Agriculture,fishing, Production, Construction and Service Industries 78.3 78.0
           
    A (part) Agriculture, forestry and fishing 76.3 76.4
    B-E Production Industries 78.7 77.7
    F Construction Industries 74.8 74.9
    G Distribution Industries 77.1 77.6
    H-S Service Industries 79.5 79.0
           

    Table source: Office for National Statistics

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    For an estimate of the cost to GB businesses for providing their data to the ABS (known as compliance cost) see appendix G of the ONS Compliance Costs Report.

  9. General

    These points should be noted when using ABS results:

    ABS coverage
    The results in this statistical bulletin represent approximately two thirds of the UK economy in terms of Gross Value Added. In previous releases the UK Business Economy has been referred to as the Whole Economy.

    The industries covered are:

    • Agriculture (support activities SIC 01.6 only), forestry and fishing - Section A

    • Production industries - Sections B-E

    • Construction industries - Section F

    • Distribution industries - Section G

    • Service industries - Sections H, I, J, K (SIC 65.1 and 65.2 only), L, M, N, P (private provision only), Q (private provision only in SIC     86.1  and 86.9), R and S

    The main industries excluded are:

    • Agriculture (SIC 01.1, 01.2, 01.3, 01.4 and 01.5 in Section A)

    • Financial intermediation (SIC 64, 65.3, 66 in Section K)

    • Public administration and defence (Section O)

    • Education (public provision in Section P)

    • Health (SIC 86.2, public provision in SIC 86.1 and 86.9 in Section Q)

    Only part of the finance sector is covered by the ABS (Insurance and reinsurance only (SIC 65.1 and 65.2)) and this coverage is relatively new, beginning in 2008. Development work was undertaken to ensure the questionnaire was as relevant as possible for this sector. The ABS team will continue to monitor the data being collated to ensure it is as relevant and accurate as possible but until a longer time series is available results remain experimental.

    Standard Industrial Classification
    ABS results are classified according to the Standard Industrial Classification of Economic Activities (SIC) system. The UK is required by European legislation to have a system of classification consistent with the European Union’s industrial classification system. The system underwent a major review in 2007. ABS data have been collected and published on the SIC 2007 system since the reference year 2008. See also definitions of Sections and division in background note 9.

    Structural changes
    The business economy is constantly evolving as businesses merge, are taken over, or simply change the main focus of their business. These changes can result in the industry classification of a business changing. For example, if a business undertakes both manufacturing and wholesale activities, but most of its employment is within manufacturing, it will be classified to manufacturing. If the employment were to change substantially so that the majority worked in wholesale then the industry classification would change and the whole of the businesses turnover, for example, would move from manufacturing to wholesale. In industries where movements are common, or where large businesses are involved, these changes can themselves sometimes cause large changes in ABS estimates. This should be taken in to consideration when changes over time are being assessed.

    Regional apportionment
    The business unit to which ABS questionnaires are sent is called the reporting unit. For ABS, the reporting unit represents an enterprise, which may consist of one or more sub-units (called local units). For example, an enterprise might be the head office for a group of shops. An enterprise may therefore have local units at different locations, and may carry out more than one type of economic activity.

    To produce the regional estimates, the reporting unit data returned by each business is divided amongst its local units, largely in proportion to the employment in each local unit. Local unit employment is obtained from the Business Register Employment Survey (BRES), which collects data from local units. Results are then aggregated for each country / English region and industry, using the industry classification of the local units.

    Each local unit is assigned a single SIC code, which corresponds to the unit’s principal activity. Where more than one type of economic activity is carried out by a local unit or enterprise, its principal activity is the activity in which most of the workforce is employed. Hence, although the sum of the regional results for the UK Business Economy will match the total for the national results, the sum of the regional results by industry will not necessarily match the UK industry totals, as local units might not all share the same industry classification as their parent units.

    Table 2: UK Business Economy (Sections A-S), Comparison of Regional and National aGVA by Sector, 2011

    Revised 2011 UK data

    £ billion
    aGVA method Service Industries Production Industries Distribution Industries Construction Industries Agriculture, forestry and fishing UK Business Economy
                 
    Regional approach 523.6 222.2 159.9 70.4 1.4 977.4
                 
    National approach 521.0 222.1 162.1 70.6 1.6 977.4
                 

    Table source: Office for National Statistics

    Table notes:

    1. The sum of constituent items in tables may not always agree exactly with the totals shown due to rounding.

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    Changes to the regional weighting methodology were introduced in 2012 and has been used for all estimates from 2009 onwards. Analysis of the impact of the new weighting method showed that differences in the figures were generally small, particularly at high levels of aggregation. Further information on the methodology of the approach and analysis of the impact can be found in Weighting in the Regional System.

    As BRES is not carried out at the same time as ABS, differences in the timing of responses from ABS and BRES can lead to some reduction in the quality of the apportionment method.

    Calculation of Gross Value Added estimates
    The approximate estimate of Gross Value Added at basic prices (aGVA) published in this release is a measure of the income generated by businesses within their industries and sectors, less the cost of goods and services used  to create the income. The main component of income is turnover, while purchases is the main component of the consumed goods and services (referred to as intermediate consumption). Stock levels which may rise or fall can also have an impact on aGVA, as can the values of subsidies received or duty paid. Businesses' labour costs (for example, wages and salaries) are paid from the value of GVA, leaving an operating surplus which is a good approximation for profit. The cost of capital investment, financial charges and dividends to shareholders are met from the operating surplus.

    The ABS publishes aGVA at 'basic prices'. Gross Value Added (GVA) at basic prices is the output at basic prices minus intermediate consumption at purchaser prices. The basic price is the amount receivable by the producer from the purchaser for a unit of a product, minus any tax payable plus any subsidy receivable on that product.

    There are differences between the ABS approximate measure of Gross Value Added and the measure published by National Accounts. The ABS measure of aGVA is called 'approximate' because it does not fully allow for some National Accounts concepts such as taxes, subsidies or income earned in kind. National Accounts carry out coverage adjustments, quality adjustments, coherence adjustments and conceptual and value adjustments such as subtracting taxes and adding subsidies not included in the ABS measure. The National Accounts' estimate of GVA (see section 2.3 of UK National Accounts), uses input from the ABS and a number of other sources, and covers the whole UK economy, whereas ABS does not include some parts of the agriculture and financial activities sectors, or public administration and defence. The ABS measure covers market and non-market output (except in Sections P and Q which are market output only), whereas National Accounts only uses ABS’s market output and adds non-market output from other sources (e.g. government services supplied for free such as education, charities), and own account output (products and services produced and consumed by a business, e.g. a farm growing feed for its own livestock).

    The ABS total aGVA for the UK Business Economy is around two thirds of the National Accounts whole economy GVA, because of these differences in coverage and calculation. The ABS estimates are also not adjusted for inflation.

    More detailed information of the differences between aGVA and GVA is available in the ABS Technical Report (1.61 Mb Pdf) published on the ABS webpages.

    Department of Finance and Personnel Northern Ireland (DFPNI)
    DFPNI publish their own estimates of activity in Northern Ireland which differ from those in this release due to variations in methodology. DFPNI estimates should be used where only Northern Ireland is of interest. Where comparisons with other UK regions/ countries are required estimates in this release should be used.

  10. Definitions

    Agriculture, Forestry and Fishing Sector
    This sector covers all economic activity concerned with Agriculture, Forestry and Fishing. In terms of SIC 2007 classification this is Section A, comprising Divisions 01, 02 and 03. The ABS covers forestry, fishing and only the support activities within Agriculture.  The other parts of Agriculture which include farming of crops and animals, are collected, processed and published by DEFRA.

    Apportionment
    To produce the ABS regional estimates, where a reporting unit has more than one local unit, the reporting unit data returned  is divided amongst its local units, largely in proportion to the employment in each local unit. This process is called apportionment.

    Approximate Gross Value Added ( aGVA)
    Gross Value Added (GVA) represents the amount individual businesses, industries or sectors contribute to the economy. This is the difference between the value of goods and services produced by a business (called the output) and the cost of raw materials and other inputs which are used up in production of those goods and services (called the intermediate consumption). This ABS measure of aGVA is called 'approximate' because it does not fully allow for certain National Accounts concepts such as taxes, subsidies or income earned in kind.

    aGVA = output at basic prices – intermediate consumption
             = total turnover
                 + movement in total stocks
                 + work of a capital nature carried out by own staff
                 + value of insurance claims received
                 + other subsidies received
                 + amounts paid in business rates
                 + amounts paid in vehicle excise duty 
                 - total purchases
                 - amounts received through the Work Programme (formerly the Welfare to Work Scheme)
                 - total net taxes (note: for service industries, this is total taxes, not total net taxes)

    Construction sector
    This sector covers Construction of buildings, Civil engineering and Specialised construction activities. In terms of SIC 2007 this is designated as Section F, and comprises Divisions 41 to 43.

    DEFRA
    DEFRA is the Department for Environment, Food and Rural Affairs. They are the UK government department responsible for policy and regulations on environmental, food and rural issues. They publish statistics on crop and animal farming not covered by ABS. More information can be found on the DEFRA website.

    Distribution sector
    This sector covers Retail, Wholesale and the Sale & repair of motor vehicles (Motor trades). In terms of SIC 2007, it relates to Section G, which comprises Divisions 45 to 47.

    Division
    A sub-classification of the UK SIC 2007, splits economic activity into 88 Divisions. Each Division, denoted by a 2 digit number, is part of a SIC Section. For example, Division 42, Civil engineering, is one of three Divisions in Section F, Construction.

    Local Unit
    This is the basic unit used in analysis of regional data for the ABS. Each Local Unit comprises a single physical site, and there may be many Local Units in a single Reporting Unit. Local Unit data is not requested separately, but estimated from Reporting Unit level information.

    Production sector
    This sector covers SIC 2007 Sections B to E, which comprises Mining & quarrying, Manufacturing, Electricity, gas and Water supply & waste management activities, and includes Divisions 05 to 39.

    Purchases
    The net costs of all purchases made by businesses during the period of the survey whether or not they were used or resold during the period.  Certain costs are excluded from this total figure, including. employment costs, stock variation, bad debts, depreciation, interest payments, amounts charged to a capital account and capitalised building repairs.

    Region – NUTS1 and GOR
    The Nomenclature of Units for Territorial Statistics (NUTS) is a hierarchical classification of geographical units that provides a breakdown of the European Union's territory for the purposes of producing comparable regional statistics. There are various levels of NUTS from UK countries and regions down to individual wards. The UK is divided into 12 NUTS1 regions, which are used in this publication.  They include nine English regions, Scotland, Wales and Northern Ireland. These align with the former ‘Government Office for the Regions (GOR)’ classification which is now obsolete.

    Reporting Unit
    This is the basic unit used in collection of national data for the ABS. Each Reporting Unit refers to a single legal entity or business from which survey information is requested. A reporting unit may consist of a single Local Unit or multiple sites in different locations, each one represented by a Local Unit. 

    Section
    Under the UK SIC 2007, all economic activity is classified into 21 sections, denoted by the letters A to U. For example, Section C covers all manufacturing activity and together with Sections B, D and E make up the Production sector. Section F covers all construction activity. Sections are further broken down into Divisions.

    Service sector
    This sector covers SIC 2007 Sections H to S which comprises industries such as Professional, scientific & technical activities (Section M), Accommodation & food service activities (Section I), Information & communication (Section J) and Transport & storage (Section H), and includes Divisions 49 to 96. Some parts of Services are not covered by ABS, such as Section O – Public Administration & Defence.  For a full list of exclusions see background note 8 under ABS Coverage.

    Turnover
    Turnover consists of total takings or invoiced sales and receipts of the business in connection with the sale of goods and services.  Interest and similar income, other operating income and extra ordinary income are excluded.

    UK Business Economy
    This term is used to describe the part of the UK’s economy covered by the ABS, which in terms of GVA represents around two thirds of the UK total. The industries included in the UK Business Economy are defined in detail in background note 8 under ABS coverage. 

  11. Disclosure control and symbols

    It is sometimes necessary to suppress figures for certain items in order to avoid disclosing information about an individual business. Further information on why data are suppressed is available in the ONS Disclosure Control Policy or in the ABS Technical Report (1.61 Mb Pdf) .

    The following symbols are used throughout the ABS releases:
    *     information suppressed to avoid disclosure.
    ..     not available.
    -      nil or less than half the level of rounding.

  12. National Statistics

    The United Kingdom Statistics Authority reviewed ABS outputs in their report “Assessment of compliance with the Code of Practice for Official Statistics: Statistics from the Annual Business Survey – Assessment Report 180”.

    Following the ABS response to the report the UK Statistics Authority have since designated these statistics as National Statistics, in accordance with the Statistics and Registration Service Act 2007 and signifying compliance with the Code of Practice for Official Statistics.

    Designation can be broadly interpreted to mean that the statistics:
    • meet identified user needs;
    • are well explained and readily accessible;
    • are produced according to sound methods, and
    • are managed impartially and objectively in the public interest.

    Once statistics have been designated as National Statistics it is a statutory requirement that the Code of Practice shall continue to be observed.

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  14. Government Statistical Service (GSS) business statistics

    To find out about other official business statistics, and choose the right data for your needs, use the GSS Business Statistics Interactive User Guide. By selecting your topics of interest, the tool will pinpoint publications that should be of interest to you, and provide you with links to more detailed information and the relevant statistical releases. It also offers guidance on which statistics are appropriate for different uses.

  15. Discussing ONS business statistics online

    There is a Business and Trade Statistics community on the StatsUserNet website. StatsUserNet is the Royal Statistical Society’s interactive site for users of official statistics. The community objectives are to promote dialogue and share information between users and producers of official business and trade statistics about the structure, content and performance of businesses within the UK. Anyone can join the discussions by registering via either of the links above.

  16. Special events

    ONS has published commentary, analysis and policy on 'Special Events' which may affect statistical outputs. For full details visit the Special Events page on the ONS website.

  17. Release policy

    ABS UK national results at the industry class level (4 digit Standard Industrial Classification 2007) are available free of charge via the 'Data in this release' button at the top of this publication, or from the ABS webpages on the ONS website. The published variables include turnover, purchases, aGVA and employment costs.

    Additional standard extracts containing more detail are available on request. Bespoke analyses are also available but there will be a charge for these. For more information about either of these services please email abs@ons.gsi.gov.uk, or telephone +44 (0)1633 456592 for standard extracts, or +44 (0)1633 456601 for bespoke special analyses

    Any bespoke analysis carried out for ABS customers will be listed on the ONS data available on request web pages, and the data sets will be available free of charge on request.

  18. Details of the policy governing the release of new data are available by visiting www.statisticsauthority.gov.uk/assessment/code-of-practice/index.html or from the Media Relations Office email: media.relations@ons.gsi.gov.uk

    These National Statistics are produced to high professional standards and released according to the arrangements approved by the UK Statistics Authority.

Statistical contacts

Name Phone Department Email
Heather Bovill +44 (0)1633 455107 Business Outputs and Developments Division abs@ons.gsi.gov.uk
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