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Statistical bulletin: Second Estimate of GDP, Q2 2014 This product is designated as National Statistics

Released: 15 August 2014 Download PDF

Key points

  • Change in gross domestic product (GDP) is the main indicator of economic growth. As previously announced, this second estimate of GDP for Q2 2014 is based entirely on output data and does not include information on the expenditure and income components of GDP.
  • GDP increased by 0.8% in Q2 2014, the second consecutive quarter-on-quarter increase of 0.8%. This figure is unrevised from the preliminary estimate of GDP published on 25 July 2014.
  • Output increased in two of the four main industrial groupings within the economy in Q2 2014 compared with Q1 2014. In order of their contribution, output increased by 1.0% in services and by 0.3% in production. However, output was flat in construction and decreased by 0.2% in agriculture.
  • In Q2 2014 GDP was estimated to be 0.2% above the pre-downturn peak in Q1 2008. From peak to trough in 2009, the economy shrank by 7.2%.
  • GDP was 3.2% higher in Q2 2014 compared with the same quarter a year ago, revised from 3.1% as published in the preliminary estimate.
  • All figures in this release are seasonally adjusted.

Key Information

Table 1: Second Estimate of Gross Domestic Product key figures, Q2 2014

United Kingdom, 2012-2014

Percentage change on previous quarter
      GDP Index (2010=100)                       GDP     Agriculture     Production     Construction Services
        Weights 1000 7 152 63 778
                 
2012   Q2 101.0 -0.4 -2.2 -1.0 -3.6 -0.1
    Q3 101.7 0.8 -0.3 0.2 -2.1 1.0
    Q4 101.5 -0.2 -0.2 -2.1 1.9 -0.1
2013   Q1 102.1 0.5 -4.9 0.4 -0.7 0.5
    Q2 102.7 0.7 2.1 0.6 1.9 0.5
    Q3 103.6 0.8 0.3 0.7 2.8 0.7
    Q4 104.3 0.7 0.2 0.4 0.5 0.7
2014   Q1 105.1 0.8 1.0 0.7 1.5 0.8
    Q2 106.0 0.8 -0.2 0.3 0.0 1.0
                 

Table source: Office for National Statistics

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Change in GDP is the main indicator of economic growth. Further information on GDP can be found in background note 5. All data in this bulletin are seasonally adjusted estimates and have had the effect of price changes removed (in other words, the data are deflated). Further information on some of the key concepts (including seasonal adjustment and deflation) underlying the estimates can be found in background note 8.

Usually, for the Second Estimate of GDP and the Quarterly National Accounts, the output Gross Value Added (GVA) and GDP estimates are balanced with the equivalent income and expenditure approaches to produce headline estimates of GVA and GDP. However, the Quarterly National Accounts for Q2 2014 will include the introduction of the European System of Accounts 2010 classification updates, so to allow sufficient time to incorporate the necessary changes, the Second Estimate of GDP for Q2 2014 is based entirely on output data. This release supplements the Preliminary Estimate of GDP for Q2 2014 published on 25 July 2014, by replacing the forecast data for the third month of the quarter for the Index of Production (IoP), the Index of Services (IoS) and the monthly construction output survey with actual data. Information on the income and expenditure components will be made available in the Quarterly National Accounts, due to be published on 30 September 2014.

Figure 1: GDP contributions (1) to the quarter-on-quarter % change, Q2 2014

United Kingdom

Figure 1: GDP contributions (1) to the quarter-on-quarter % change, Q2 2014
Source: Office for National Statistics

Notes:

  1. Components may not sum due to rounding.
  2. Percentage change.

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The contribution an industry grouping makes to GDP quarterly growth is dependent on the change in that industry’s grouping and its weight within the output approach to measuring GDP. The current 2010 based weights are: services 77.8%, production 15.2%, construction 6.3%, and agriculture 0.7%.

GDP increased by 0.8% in the second quarter of 2014; this is unrevised from the Preliminary Estimate of GDP published on 25 July 2014. An increase in the estimate for construction output was partially offset by a downwards revision to production output. Services contribution was revised up slightly despite growth for this industry grouping remaining at 1.0%. Overall the impact of these changes did not change the GDP quarter-on-quarter growth estimate of 0.8%.

The largest contribution to Q2 2014 GDP growth came from services; these industries increased by 1.0%, contributing 0.79 percentage points to the increase in GDP (as seen in Figure 1). This followed an increase of 0.8% in Q1 2014. In the latest quarter there was widespread growth, with increases in each of the four main services aggregates (business services & finance; distribution, hotels & restaurants; transport, storage & communication; and government & other services). In Q2 2014, output from services was 3.0% above its previous peak in Q1 2008, prior to the economic downturn.

There was also an upward contribution (0.05 percentage points) from production; these industries rose by 0.3%, with energy supply increasing by 4.4% following a decrease of 6.4% in Q1 2014, manufacturing increasing by 0.2% following an increase of 1.5% in Q1 2014, and mining & quarrying increasing by 0.5% following an increase of 0.8% in Q1 2014. Partially offsetting these rises was a decrease of 2.5% in water & waste management.

Construction output was flat in Q2 2014 when compared with Q1 2014, therefore having no contribution to GDP growth. This followed a rise of 1.5% in Q1 2014.

The comparison with a year earlier shows much stronger growth than the quarter-on-quarter comparison, with construction estimated to have increased by 4.8% when compared with Q2 2013. This is the fifth consecutive quarter-on-a-year ago increase, beginning in Q2 2013 and coming after five consecutive quarters of year-on-year negative growth.

Construction was estimated to have decreased by 0.5% in the preliminary estimate of GDP. Upwards revisions to output in both April and May, and stronger than anticipated output in June 2014 has led to an increase in the estimate used in the second estimate of GDP. As a result of this, construction’s contribution to quarter-on-quarter GDP growth has increased from -0.03 to 0.00 percentage points.

Agriculture decreased by 0.2% in Q2 2014 compared with Q1 2014; this estimate is unrevised from the Preliminary Estimate of GDP. Due to the small weight of this industry in the output approach to measuring GDP, it did not contribute to GDP growth.

Economic Context

Figure 2: GDP and main components, Q2 2014

United Kingdom, 2001-2014

Figure 2: GDP and main components, Q2 2014
Source: Office for National Statistics

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GDP and all of its components are referenced to 2010, making the average index in 2010 equal to 100. It is for this reason that Figure 2 shows all components converging in 2010.

Figure 3: GDP (£billions) and quarter-on-quarter growth, Q2 2014

United Kingdom, 2003-2014

Figure 3: GDP (£billions) and quarter-on-quarter growth, Q2 2014
Source: Office for National Statistics

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GDP in the UK grew steadily during the 2000s, until a financial market shock affected UK and global economic growth in 2008 and 2009. Up until that point, services in the UK had grown steadily, while production output had been broadly flat over the same period. Construction activity grew strongly in the early part of the decade, and although there was a temporary decline in the mid-2000s, this was reversed by the end of 2007.

Economic growth resumed towards the end of 2009, but at a slower rate than the period prior to 2008 (Figure 3). This growth was also erratic, with several quarters of contraction between 2010 and 2012, although two of these coincided with statistical special events (severe winter weather in Q4 2010 and the Diamond Jubilee in Q2 2012) that are likely to have affected growth. Since 2013, GDP has grown steadily again.

Figure 4: GDP and Main components relative to 2008 Q1 level

United Kingdom, 2008-2014

Figure 4: GDP and Main components relative to 2008 Q1 level
Source: Office for National Statistics

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The pattern of GDP contraction and recovery since 2008 has varied between the different sectors of the economy. This is illustrated in Figure 4, which shows the path of GDP and its components (excluding agriculture, but including manufacturing which is a sub-component of production) relative to their level in Q1 2008. The deterioration in general economic conditions during 2008/09 was more acute in the construction and production industries, but less pronounced in the services industries. The services industries generally grew steadily, if slowly, thereafter and by Q3 2013, activity exceeded the level previously seen in early 2008. Production and construction activity also grew in 2010 – with particular strength in manufacturing, as well as the historically volatile construction industry – but did not sustain this growth. Production output fell in both 2011 and 2012, falling below the trough set in 2009. Meanwhile, construction output sharply decreased in 2012 to around its 2009 trough, as long-term economic uncertainty acted as a deterrent on investment. Although there has been widespread growth across all major components of GDP since the start of 2013, the service industries remain the largest and steadiest contributor to economic growth (Table 1) and the only component of GDP where output has exceeded its pre-downturn peak.

Figure 5: GDP in economic downturns and recoveries since 1979

United Kingdom

Figure 5: GDP in economic downturns and recoveries since 1979
Source: Office for National Statistics

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Data on the most recent economic downturn and subsequent periods will be affected by the improvements to the UK National Accounts that will be introduced from September 2014. A series of articles has been published detailing these and where possible an estimate of the impact is given. All articles can be found on the Changes to National Accounts page.

From the peak in Q1 2008 to the trough in Q2 and Q3 2009, GDP decreased by 7.2%. Previous economic downturns in the early 1980s and early 1990s saw lower levels of impact on GDP. In the early 1990s downturn, GDP decreased by 2.4% from the peak in Q2 1990 to the trough in Q3 1991. In the early 1980s downturn, GDP decreased by 5.9% from the peak in Q2 1979 to the trough in Q1 1981. 

Table 2: Quarterly growth in GDP across the G7 nations (1)

  Growth, quarter-on-quarter percentage (%) Growth, quarter-on-year percentage (%)
  2014 Q1 2014 Q2 2014 Q1 2014 Q2
United Kingdom 0.8 0.8 3.0 3.2
Canada 0.3 .. 2.2 ..
France 0.0 0.0 0.8 0.1
Germany 0.7 -0.2 2.2 1.3
Italy -0.1 -0.2 -0.4 -0.3
Japan 1.5 -1.7 2.7 0.0
United States of America -0.5 1.0 1.9 2.4

Table source: Office for National Statistics

Table notes:

  1. Where a country has not yet published an estimate of GDP for 2014 Q2, this is represented by ..

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Since mid-2013, UK GDP growth has been one of the fastest among G7 economies on both a quarter-on-quarter and quarter-on-year basis (Table 2). From the available data for Q2 2014, UK growth of 0.8% was slightly lower than the US, where GDP increased by 1.0%. However, this followed a contraction of 0.5% in the US during the previous quarter, which could partly be attributed to adverse weather conditions.

All remaining members of the G7 have published their results for Q2 2014 with the exception of Canada. Japan’s GDP fell by 1.7% in Q2 2014, the sharpest quarterly contraction since Q1 2011, when economic conditions deteriorated due to the Fukushima nuclear disaster. The most recent contraction could be attributed to an announced rise in consumption tax in April 2014, which encouraged consumers to increase spending during the first quarter of the year, resulting in consumer spending falling by 5.2% in the following quarter.

GDP contracted in Germany and remained flat in France for a second successive quarter; quarter-on-year growth eased in both economies (to 0.1% and 1.3% respectively). Italian data showed a second successive quarterly contraction in GDP, with a decline of 0.2% in Q2 2014. The Italian economy has struggled to grow since the onset of the European sovereign debt crisis, where GDP has declined in almost every quarter since Q2 2011.

Cross country GDP data are publicly available from a number of sources including Eurostat, the Organisation for Economic Co-operation and Development  (OECD) and the International Monetary Fund  Fund (IMF).

Industry Analysis

Agriculture

Agriculture output decreased by 0.2% in Q2 2014, following an increase of 1.0% in the previous quarter. This is unchanged from the Preliminary Estimate of GDP. Between Q2 2013 and Q2 2014, agriculture output increased by 1.3%.

Index of production

The index of production increased by 0.3% in Q2 2014, following an increase of 0.7% in the previous quarter. This compares to an estimate of 0.4% in the Preliminary Estimate of GDP. Energy supply contributed the most to the increase, with growth of 4.4%. Between Q2 2013 and Q2 2014, production output increased by 2.1%.

Construction

Construction output was flat in Q2 2014, following an increase of 1.5% in the previous quarter. This compares to an estimated decrease of 0.5% in the Preliminary Estimate of GDP. Between Q2 2013 and Q2 2014, construction output increased by 4.8%.

Distribution, hotels & restaurants

The index for distribution, hotels & restaurants increased by 1.2% in Q2 2014, following an increase of 1.7% in the previous quarter. This compares to an estimate of 1.3% in the Preliminary Estimate of GDP. Retail trade, except of motor vehicles & motorcycles, made the largest positive contribution to the increase. Between Q2 2013 and Q2 2014, distribution, hotels & restaurants output increased by 4.8%.

Transport, storage & communication

The index for transport, storage & communication increased by 1.5% in Q2 2014, following an increase of 0.6% in the previous quarter. This compares to an estimate of 1.2% in the Preliminary Estimate of GDP. Computer programming, consultancy & related activities made the largest contribution to the increase. Between Q2 2013 and Q2 2014, transport, storage & communication output increased by 2.5%.

Business services & finance

The index for business services & finance increased by 1.3% in Q2 2014, following an increase of 0.9% in the previous quarter. This is unchanged from the Preliminary Estimate of GDP. Architectural & engineering activities made the largest positive contribution to the increase. Between Q2 2013 and Q2 2014, business services & finance output increased by 4.2%.

Government & other services

The index for government & other services increased by 0.2% in Q2 2014, following an increase of 0.2% in the previous quarter. This is unchanged from the Preliminary Estimate of GDP. Human health activities made the largest positive contribution to the increase. Between Q2 2013 and Q2 2014, government & other services output increased by 1.5%.

Growth and Contributions to Growth – Output Components

Table 3: Growth, quarter-on-quarter, for the output components of GDP

United Kingdom, 2013-2014

Per cent (%)
  2013 Q2 2013 Q3 2013 Q4 2014 Q1 2014 Q2
Agriculture, forestry & fishing 2.1 0.3 0.2 1.0 -0.2
Total Production 0.6 0.7 0.4 0.7 0.3
Mining & quarrying (Extraction) 2.4 0.5 -1.2 0.8 0.5
Manufacturing 0.5 0.9 0.6 1.5 0.2
Electricity, gas, steam & air (Utilities) -3.2 -5.0 0.8 -6.4 4.4
Water supply, sewerage etc. 3.0 4.7 1.0 0.2 -2.5
Construction 1.9 2.8 0.5 1.5 0.0
Total Services  0.5 0.7 0.7 0.8 1.0
Distribution, hotels & restaurants 1.6 1.2 0.5 1.7 1.2
Transport, storage & communication -0.1 0.0 0.3 0.6 1.5
Business services & finance 0.6 1.0 1.0 0.9 1.3
Government & other services -0.1 0.4 0.7 0.2 0.2

Table source: Office for National Statistics

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Table 4: Contributions to growth (1), quarter-on-quarter, for the output components of GDP (2)

United Kingdom, 2013-2014

Per cent (%)
  2013 Q2 2013 Q3 2013 Q4 2014 Q1 2014 Q2
Agriculture, forestry & fishing 0.0 0.0 0.0 0.0 0.0
Total Production 0.1 0.1 0.1 0.1 0.0
Mining & quarrying (Extraction) 0.0 0.0 0.0 0.0 0.0
Manufacturing 0.1 0.1 0.1 0.2 0.0
Electricity, gas, steam & air (Utilities) 0.0 -0.1 0.0 -0.1 0.0
Water supply, sewerage etc. 0.0 0.1 0.0 0.0 0.0
Construction 0.1 0.2 0.0 0.1 0.0
Total Services  0.4 0.6 0.6 0.7 0.8
Distribution, hotels & restaurants 0.2 0.2 0.1 0.2 0.2
Transport, storage & communication 0.0 0.0 0.0 0.1 0.2
Business services & finance 0.2 0.3 0.3 0.3 0.4
Government & other services 0.0 0.1 0.2 0.1 0.0

Table source: Office for National Statistics

Table notes:

  1. Contributions are to output GVA and therefore may not sum to average GDP totals (see Key Information section).  
  2. Components may not sum to totals due to rounding. 

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Table 5: Growth, quarter-on-same quarter a year ago, for the output components of GDP

United Kingdom, 2013-2014

Per cent (%)
  2013 Q2 2013 Q3 2013 Q4 2014 Q1 2014 Q2
Agriculture, forestry & fishing -3.4 -2.8 -2.4 3.7 1.3
Total Production -0.9 -0.4 2.2 2.4 2.1
Mining & quarrying (Extraction) -3.3 -2.9 5.2 2.4 0.5
Manufacturing -1.1 -0.7 1.7 3.6 3.3
Electricity, gas, steam & air (Utilities) 0.3 -2.5 -5.1 -13.3 -6.4
Water supply, sewerage etc. 3.7 8.2 8.7 9.1 3.3
Construction 1.0 6.0 4.5 6.7 4.8
Total Services  1.9 1.7 2.5 2.8 3.3
Distribution, hotels & restaurants 3.9 3.4 4.7 5.2 4.8
Transport, storage & communication 1.8 2.1 2.1 0.9 2.5
Business services & finance 2.1 2.2 2.6 3.5 4.2
Government & other services 0.6 -0.2 1.3 1.3 1.5

Table source: Office for National Statistics

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Table 6: Contributions to growth (1), quarter-on-same quarter a year ago, for the output components of GDP (2)

United Kingdom, 2013-2014

Per cent (%)
  2013 Q2 2013 Q3 2013 Q4 2014 Q1 2014 Q2
Agriculture, forestry & fishing 0.0 0.0 0.0 0.0 0.0
Total Production -0.1 -0.1 0.3 0.3 0.3
Mining & quarrying (Extraction) -0.1 -0.1 0.1 0.0 0.0
Manufacturing -0.1 -0.1 0.2 0.4 0.3
Electricity, gas, steam & air (Utilities) 0.0 0.0 -0.1 -0.2 -0.1
Water supply, sewerage etc. 0.0 0.1 0.1 0.1 0.0
Construction 0.1 0.3 0.3 0.4 0.3
Total Services  1.5 1.3 2.0 2.2 2.6
Distribution, hotels & restaurants 0.5 0.5 0.6 0.7 0.7
Transport, storage & communication 0.2 0.2 0.2 0.1 0.3
Business services & finance 0.7 0.7 0.8 1.1 1.3
Government & other services 0.1 -0.1 0.3 0.3 0.3

Table source: Office for National Statistics

Table notes:

  1. Contributions are to output GVA and therefore may not sum to average GDP totals (see Key Information section).  
  2. Components may not sum to totals due to rounding. 

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Table 7: Growth, year-on-year, for the output components of GDP

United Kingdom, 2009-2013

Per cent (%)
  2009 2010 2011 2012 2013
Agriculture, forestry & fishing -6.9 -0.7 10.6 -3.5 -4.1
Total Production -9.5 2.8 -1.2 -2.4 -0.4
Mining & quarrying (Extraction) -9.7 -2.4 -14.8 -8.7 -2.5
Manufacturing -10.2 4.2 1.8 -1.7 -0.8
Electricity, gas, steam & air (Utilities) -4.8 3.9 -5.9 -0.3 0.3
Water supply, sewerage etc. -8.3 -1.3 4.1 -0.5 4.9
Construction -13.3 8.3 2.3 -8.1 1.7
Total Services  -3.9 0.8 1.5 1.3 1.9
Distribution, hotels & restaurants -5.8 1.0 0.7 0.9 3.5
Transport, storage & communication -7.2 3.0 1.6 0.0 1.6
Business services & finance -4.8 0.4 2.5 2.1 2.1
Government & other services 0.4 0.3 0.5 1.1 0.6

Table source: Office for National Statistics

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Table 8: Contributions to growth (1), year-on-year, for the output components of GDP (2)

United Kingdom, 2009-2013

Per cent (%)
  2009 2010 2011 2012 2013
Agriculture, forestry & fishing 0.0 0.0 0.1 0.0 0.0
Total Production -1.6 0.4 -0.2 -0.4 -0.1
Mining & quarrying (Extraction) -0.3 0.0 -0.3 -0.2 0.0
Manufacturing -1.1 0.4 0.2 -0.2 -0.1
Electricity, gas, steam & air (Utilities) -0.1 0.1 -0.1 0.0 0.0
Water supply, sewerage etc. -0.1 0.0 0.0 0.0 0.1
Construction -0.9 0.5 0.1 -0.5 0.1
Total Services  -3.0 0.7 1.2 1.0 1.5
Distribution, hotels & restaurants -0.8 0.1 0.1 0.1 0.5
Transport, storage & communication -0.8 0.3 0.2 0.0 0.2
Business services & finance -1.5 0.1 0.8 0.6 0.7
Government & other services 0.1 0.1 0.1 0.2 0.1

Table source: Office for National Statistics

Table notes:

  1. Contributions are to output GVA and therefore may not sum to average GDP totals (see Key Information section). 
  2. Components may not sum to totals due to rounding. 

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Background notes

  1. What’s new?

    This release is based entirely on output data and supplements the July Preliminary GDP estimate by replacing the third month of forecast data for the Index of Production (IoP), the Index of Services (IoS) and the monthly construction output survey with actual data. This is to allow sufficient time for the introduction of the European System of Accounts 2010 Classification updates for Blue Book 2014. There is no published information on the income or expenditure components until the Quarterly National Accounts (QNA) release on 30 September 2014. This release will incorporate the major changes to the National Accounts - more details are given in the article 'Latest Developments to National Accounts' published on the ONS website. The Quarterly National Accounts release will be consistent with the Blue Book 2014 dataset.

    Blue Book 2014 will be published on 31 October 2014.

  2. What do you think?

    As a user of our statistics we would welcome your feedback on this publication. If you would like to get in touch please contact us via email: ios.enquiries@ons.gsi.gov.uk.

  3. Continuous Improvement of GDP: sources, methods and communication

    An article providing an overview of current and planned continuous improvement work in relation to producing estimates of quarterly and annual GDP can be found in the Guidance and Methodology area.

    On 31 May 2013, ONS launched a public consultation on a five year work plan (2013/2014 – 2017/2018) for National Accounts and other outputs that have a close relationship. The finalised National Accounts and Related Statistics Work Plan (231.4 Kb Pdf) has since been published on the ONS website.

  4. Special Events

    ONS maintains a list of candidate special events in the Special Events Calendar. As explained in the ONS Special Events policy, it is not possible to separate the effects of special events from other changes in the series. While ONS has not classified the 2014 FIFA World Cup as a statistical special event, the Retail Sales, May 2014 release highlighted that feedback from some retailers had suggested sales increased in May 2014 due to the build-up of it. There is no evidence to suggest that this event had an effect on other industries in May 2014, and early responses used to forecast the June 2014 estimates in this release indicate that the 2014 FIFA World Cup did not have a significant impact on GDP.

  5. Understanding the data

    Short guide to GDP
    Gross domestic product (GDP) is an integral part of the UK national accounts and provides a measure of the total economic activity in the UK. GDP is often referred to as one of the main 'summary indicators' of economic activity and references to 'growth in the economy' invariably refer to the growth in GDP during the latest quarter.

    In the UK three different but equivalent approaches are used in the estimation of GDP:

    • GDP from the output or production approach - GDP(O) measures the sum of the value added created through the production of goods and services within the economy (our production or output as an economy). This approach provides the first estimate of GDP and can be used to show how much different industries (for example, services) contribute within the economy.

    • GDP from the income approach - GDP(I) measures the total income generated by the production of goods and services within the economy. The figures breakdown income into, for example, income earned by companies (corporations), employees and the self employed.

    • GDP from the expenditure approach - GDP(E) measures the total expenditures on all finished goods and services produced within the economy.

    How ONS statistics explain the economy

    The Index of Services is mentioned in a video summary which highlights 14 ways ONS statistics help you understand the economy. The video summary, along with an interactive version of the video, was released on the ONS website on 27 June 2014 alongside the Quarterly National Accounts for Q1 2014.

  6. Short guide to National Accounts

    The national accounts provide an integrated description of all economic activity within the economic territory of the UK, including activity involving both domestic units (i.e. individuals and institutions resident in the UK) and external units (those resident in other countries). In addition to being comprehensive, the accounts are fully integrated and internally consistent. More information can be found in UK national accounts: a short guide.

  7. Interpreting the data

    Figures for the most recent quarter are provisional and subject to revision in light of (a) late responses to surveys and administrative sources, (b) forecasts being replaced by actual data and (c) revisions to seasonal adjustment factors which are re-estimated every quarter and reviewed annually.

    Data for the retail industry are broadly comparable with the Retail Sales Index published on 24 July 2014. However, the two series operate under different revisions policies meaning there can be timing differences in the updating of the two series. Also, adjustments to the data within the IoS release are sometimes made at the time of the Blue Book to improve the coherence of the three approaches to measuring GDP. Therefore, inconsistencies between the two series are not unusual but tend to be small. There are also conceptual and coverage differences between retail sales and retail output which can lead to apparent inconsistencies.

  8. Definitions and explanations

    Definitions found within the main statistical bulletin are listed here:

    Index number
    An index number is a number which indicates the change in magnitude relative to the magnitude at a specified point, the latter usually taken as 100. For example, the level of GDP for Q2 2014 is given in Table 1 as 106.0. This means that GDP was 6.0% higher than the average in the reference period, which is currently 2010.

    Seasonal adjustment
    The index numbers in this statistical bulletin are all seasonally adjusted. This aids interpretation by removing annually recurring fluctuations, for example, due to holidays or other regular seasonal patterns. Unadjusted data are also available.

    Seasonal adjustment removes regular variation from a time series. Regular variation includes effects due to month lengths, different activity near particular events such as shopping activity before Christmas, and regular holidays such as the May bank holiday.

    Some features of the calendar are not regular each year, but are predictable if we have enough data - for example, the number of certain days of the week in a month may have an effect, or the impact of the timing of Easter. As Easter changes between March and April we can estimate its effect on time series and allocate it between March and April depending on where Easter falls. Estimates of the effect of the day of the week and Easter are used respectively to make trading day and Easter adjustments prior to seasonal adjustment.

    Value (current price)
    Economic transactions involve the production of goods and the sale of goods and services (commodities). The monetary value (or current price) of these transactions is a product of the quantity produced or sold and the unit price. In a particular period, the total (aggregate) value of all transactions taking place in the economy is simply the sum of the individual transaction values in that period.

    Volume (constant price)
    When it comes to comparing the difference in aggregate values between two time periods, the observed movement is generally a combination of changes in quantity and changes in price. In a lot of cases, the interest of users of economic data lies in understanding the degree to which economic growth is being driven by changes in quantities (i.e. physical volumes of production and consumption). It is standard practice to present many economic statistics as volume series (showing changes in the level of the series that have not been affected by changes in price) and such series are referred to as 'at constant prices'.

    Deflation
    The process of removing price changes from a value series and converting to a volume series is known as deflation. All index numbers presented in this bulletin are volume measures and have had the effect of price changes removed.

    Chained volume measures
    The indices in this bulletin are presented as ‘chained volume’ measures, meaning that successive volume estimates have been linked (or chained) together. Annual chain-linking was introduced for GDP in 2003 and is considered preferable to producing standard volume series as chained volume measures more accurately reflect volume changes over time. More information on chain-linking can be found in the Tuke and Reed (2001) (92.8 Kb Pdf) article, and a paper on chain-linking weights in the output approach to measuring GDP can be found on the Methods and Sources page.

    Gross Value Added Industry Weights Dataset
    The annual weights used within the output approach of GDP has been included in our dataset. These weights have been used since the Quarterly National Accounts, published on 27 June 2013 and are consistent with the data used in the Blue Book 2013 dataset, published on 31 July 2013. All weights are given in parts per thousand.

    An update will be published alongside the Blue Book 2014 dataset, due to be published on 30 September 2014.

    Sample sizes and data content
    The estimates in this release are based on a large amount of information returned by businesses across the whole of the economy. Information on activity (more specifically, turnover or sales) is available from about 44,000 businesses for each month of the quarter. In addition, the ONS collects price information on nearly 200,000 individual products each month from around 30,000 businesses. This information is used to remove the effect of price changes from the estimates.

  9. Quality

    Basic Quality Information
    All estimates, by definition, are subject to statistical ‘error’ but in this context the word refers to the uncertainty inherent in any process or calculation that uses sampling, estimation or modelling. Most revisions reflect either the adoption of new statistical techniques, or the incorporation of new information, which allows the statistical error of previous statements to be reduced. Only rarely are there avoidable ‘errors’ such as human or system failures, and such mistakes are made quite clear when they do occur.

    Expectations of accuracy and reliability in early estimates are often too high. Revisions are an inevitable consequence of the trade off between timeliness and accuracy. Early estimates are based on incomplete data.

    Quality and methodology report
    A quality and methodology report for estimates of Gross Domestic Product is provided on the ONS website.

    This report describes, in detail, the intended uses of the statistics presented in this publication, their general quality and the methods used to produce them.

  10. National Accounts revisions policy

    In accordance with the National Accounts revision policy (41.7 Kb Pdf) , there are no periods open for revision in this release. More information on revisions in the output approach to measuring GDP can be found on the Methods and Sources page.

  11. Revisions Triangles

    Spreadsheets giving revisions triangles (real time databases) of estimates from 1992 to date are available to download. They can be found under the section Revisions triangles for gross value added at basic prices, chained volume measure.

    The revisions triangles for the components of GDP have been temporarily removed following the move to the new Standard Industrial Classification (SIC2007) in October 2011. The revisions triangles for total GDP are still available and the services industry analysis is separately available on a monthly basis via the Index of Services dataset.

    Revisions to data provide one indication of the reliability of key indicators. Tables 9 and 10 show summary information on the size and direction of the revisions which have been made to data covering a five year period. A statistical test has been applied to the average revision to find out if it is statistically significantly different from zero. An average revision close to zero is desirable as it suggests that revisions are not predictable in any one direction. The result of the test is that the average revision is not statistically different from zero.

    Table 9: Revisions to early estimates of GVA growth

    Revisions between early estimates of GVA growth (quarterly, CVM)
    Revisions to GVA growth   GVA Growth in the latest period %  Average over the last five years  Average over the last five years without regard to sign (average absolute revision)
    Between M1 and M2 0.8 0.04 0.06
    Between M2 and M3 0.8 -0.02 0.06

    Table source: Office for National Statistics

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    Table 9 shows the revisions between the early estimates of gross value added (GVA). The analysis of revisions between month 1 and month 2 uses month 2 estimates published from July 2009 (2009 Q2) to April 2014 (2014 Q1). The analysis of revisions between month 2 and month 3 uses month 3 estimates published from August 2009 (2009 Q2) to May 2014 (2014 Q1).

    Table 10: Revisions to GVA growth between the estimate published three months after the end of the quarter and the equivalent estimate three years later

    Revisions between early estimates of GVA growth (quarterly, CVM)
    Revisions to GVA growth     GVA Growth in the latest period %  Average over the last five years  Average over the last five years without regard to sign (average absolute revision)
    GVA growth (quarterly CVM) 0.8 -0.06 0.37

    Table source: Office for National Statistics

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    Table 10 shows the revisions to GVA growth between the estimate published three months after the end of the quarter and the equivalent estimate three years later. The analysis uses month 3 estimates first published from September 2009 (2006 Q2) to June 2014 (2011 Q1).

    An article titled 'Understanding the quality of early estimates of Gross Domestic Product' (122.9 Kb Pdf) , which was first published in December 2009, is available on the ONS website.

    This article presents an analysis of revisions to the early estimates of GDP based on a long period database of real time GDP back to 1955. This database is regularly updated and is available on the ONS website.

    ONS published an article titled 'Revisions to GDP and components' (513.5 Kb Pdf) which updates analysis undertaken previously on GDP revisions as well as launching a real time £ million database for all the components of both the expenditure and income approaches to measuring GDP.

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  13. Publication Policy

    Details of the policy governing the release of new data are available from the press office. Also available is a Pre release Access List of those given pre-publication access to the contents of this release.

    Accessing data

    The data presented in the tables of this statistical bulletin are also available to download from the data section of this publication. A completed run of data is available as a time series dataset on the ONS website.

  14. Code of Practice for Official Statistics

    National Statistics are produced to high professional standards set out in the Code of Practice for Official Statistics. They undergo regular quality assurance reviews to ensure that they meet customer needs. They are produced free from any political interference.

    Code of Practice

    The UK Statistics Authority has 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.

  15. 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

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