A thread on comparing different economies: similarities and differences. 👇
Last week saw the publication of @ONS data on GDP. As an important indicator of economic performance, GDP growth is often compared between countries. (1/n)
I have seen a few comments about whether the composition of activity in an economy (e.g. services vs manufacturing) has an effect on relative economic performance during the pandemic. That is difficult to answer, and I am not going to try to deal with that, but… (2/n)
…the composition of economics is (to me) interesting and rarely looked at, so here are some statistics from the @OECD. (Note: I have done some basic calculations and changed some of the descriptors in places to make it easier to understand.) (3/n)
Firstly, this chart shows the make up of 12 economies (G7 + some others). This breaks down economic activity into services; manufacturing; construction; energy, mining and oil & gas; and agriculture, forestry & fishing. (4/n)
While there is clearly some variation, in terms of services it is not that marked with most countries shares of between 70 and 80% of GDP. And the UK does not particularly stand out, with a share close to countries such as the USA, France and the Netherlands. (5/n)
Even countries with large manufacturing sectors (Japan & Germany) or large mining industries (Australia) still have services accounting for around 70% of GDP. (6/n)
Secondly, people often ask how ‘consumer oriented’ different economies are. This is not easy to answer, but one way of looking at this is to break down the service sector into its components. This chart does that. (7/n)
If we take retail, transport and hospitality as the most ‘consumer oriented’ then this does not suggest the UK is much different to many other countries. Rather the UK has a higher than average share for real estate, prof. & scientific, finance and information. (8/n)
This takes me to my third category, where we do see some big variations, and that is trade. The chart below shows the ratio of total goods and services trade (imports + exports) to GDP – this is a measure of how ‘open’ a country is to trade. (9/n)
You can see some big variations between countries. The UK sits close to the middle of the pack, with a trade to GDP ratio roughly twice that of the USA and Japan, though well below Germany and the Netherlands. (10/n)
This higher trade to GDP ratio means that the UK is described as a relatively open economy. This is important as the more open an economy is, the more interconnected with other economies it is compared with a relatively closed economy. (11/n)
(As an aside, the UK economy is often described as a ‘small, open economy’. The term ‘small’ here means relative to the rest of the world, as UK GDP is between 2.5 & 3.3% of world GDP depending on exchange rate used.) (12/n)
In sum, the structure of developed economies is often more similar than people think, but there is a much bigger variation is the trade intensity of different economies. (ENDS)
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[THREAD] The UK labour market has been profoundly affected by the pandemic. The effects, however, have been complex and different from how the financial crisis played out. Six key points from today’s @ONS data:
Firstly, people are losing jobs and employment is falling. But the falls are relatively modest compared to the huge falls in GDP we are seeing (GDP fell by just under 20% in the three months to May YoY; payrolls fell just over 2% July YoY). (1/n)
The number of people on the payroll fell by just over 100,000 in July and is down 700,000 since March. (2/n)
Retail sales data for June, from the @ONS, a thread 👇. (All the hard work of @StatsRhian and team.)
Retail sales had a good June, growing around 14% compared to May, and we are almost back to the level we saw before the pandemic. (1/n)
But we are certainly not back to how things were. There are some huge changes within overall retails sales discussed below, all of which have happened in a few months. (2/n)
Labour market statistics: a thread pulling together the various data sources.👇
The overall picture has been a worsening labour market, but the rate of weakening slowed into June. For example, HMRC tax data showed the fall in people on the payroll moderated. (1/n)
(Of course all of this does not reflect recently reported job losses, which might show up in future labour market statistics.) (2/n)
Thread on today’s @ONS economic data, and what this means for the economy 👇
As was expected, we saw a huge fall in economic activity in April, down 20% compared to March. Taking March and April together, the fall was 25%: in two months the economy shrank by a quarter. (1/n)
At risk of stating the obvious, the size and suddenness of the fall in economic activity is completely unprecedented. The biggest fall before the coronavirus was just over 2%. (2/n)
On Tuesday we @ONS published the latest statistics on employment. People have questioned whether the definition of employed (working more than 1 hour) distorts the picture. The quick answer is no. Thread... (1/7)
Only a small proportion (1.5% of workers) record very short hours (below 6hrs/wk). This hasn’t changed much over the last 10 years, and is lower than around 25 years ago. Only around 8% work 15hrs/wk or fewer, down from around 10% 25 years ago. (2/7)
Low hours are a modest share of employment, and have not been rising. So the recent growth in the employment rate is not caused by lots of people on low numbers of hours a week. (3/7)