Revised economic estimates from the ONS (1 September 2023) suggest that the UK economy recovered much faster from the pandemic than previously reported. The new analysis places the UK in the middle of the G7* pack, rather than last as previously estimated.
The main reason for the change is that ONS have looked in more detail at inputs and outputs at a sectoral level, rather than purely at turnover which guides its initial estimates. This has led to enormous changes in estimates of the pandemic performance of some sectors. In general, services’ contribution to economic growth has been revised up, whilst productions’ contribution (manufacturing, construction, agriculture and oil & gas) has been revised down.
The Financial Times reported that:
“Extreme changes to detailed figures across many sectors of the economy will completely alter analysts’ and policymakers’ thinking about productivity growth, inequality and how society has changed since the pandemic”.
What does this mean for Buckinghamshire?
The previously published data suggested that economic output in Buckinghamshire fell more than the national average between 2019 and 2020 and recovered more slowly than the national average between 2020 and 2021. However, the revisions could well change this narrative.
Nationally, some sectors in which Buckinghamshire specialises have had their outputs revised upwards (e.g. wholesale, film and TV) whilst others have been revised downwards (e.g. manufacture of other transport equipment). We therefore await the release of revised local level data to see how the changes balance out to better understand Buckinghamshire’s economic performance during the pandemic years.
Back to the national story, it’s important to note that the long-term narrative of slow economic growth across the UK since the 2007/08 financial crisis remains the same. It’s also worth noting that there’s not much to choose between the four biggest European economies and the UK’s relative position in league table may change again when other countries revise their growth figures for the peak Covid-19 years.
*The G7 consists of Canada, France, Germany, Italy, Japan, the United Kingdom and the United States. The European Union (EU) is a "non-enumerated member”