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BUSINESS AND FINANCIAL SERVICES NOW MAKE UP 30 PER CENT OF THE ECONOMY

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Business and financial services accounted for over 30 per cent of ...
Business and financial services accounted for over 30 per cent of

total UK economic output for the first time in 2002, according to a

report* today from the Office for National Statistics.

Manufacturing's share of the total was about half that, at 15.9 per

cent, and the creative sector contributed about half that again, at

8.7 per cent of total output.

Total output of the whole economy, as measured using gross value

added (GVA), was£926.3 billion in 2002.

The report, the 2004 Edition of United Kingdom Input-Output Analyses,

shows how ONS tracks the movement of goods and services through the

economy as part of the process of balancing the components of the

National Accounts.

The analyses are also used by businesses to identify markets for

their products and by economists to construct models of the economy.

As the analyses go back to 1992 they can track the impact on the

economy of changing trends, structures and new technologies.

For example, the analyses show that computer and related services was

the fastest growing industry over the ten-year period. They also show

how cultural changes in food consumption have put the hotels,

catering and pubs industry among the top ten industries for output

growth over the decade.

*United Kingdom Input-Output Analyses, 2004 Edition.

ISSN 1741-7155. Available as a web-only publication on

www.statistics.gov.uk/inputoutput

The report details the 1992-2002 Input-Output Annual Supply and Use

Tables underpinning UK Gross Domestic Product (GDP). Areas analysed

include:

* The whole economy at a glance

* Export shares of goods and services

* Penetration of imports of goods and services

* Net trade in goods and services

* Information and communication technologies

* The creative sector

* The food sector

* The contribution of the top five businesses to each industry, 2002

* Taxes and subsidies recorded within the production bounda ry

* The oil and gas sector

The tables contain details of the components of GDP for the UK as

measured using the production, income and expenditure approaches.

They provide various details linking industries' inputs and outputs;

supply and demand for products; composition of GVA at current basic

prices; and the composition of uses and resources across

institutional sectors.

Whole economy

In 2002, the output of the UK economy, as measured by GVA at current

basic prices, which is before allowing for price inflation, was

£926.3 billion, 5.1 per cent higher than in 2001.

In all years from 1992 to 2002, the business and financial services

sector provided the largest contribution to GVA. In 2002, this

industry group accounted for£282.4 billion out of£926.3 billion

(30.5 per cent of the total), and the industry group itself grew over

11.7 per cent between 2001 and 2002, a faster rate than that of

growth in total GVA of only 5.1 per cent. Whereas in 1992, this

industry group accounted for£131.1 billion out of£546.1 billion

(24.0 per cent of the total).

The manufacturing sector contributed£147.5 billion in 2002, 2.5 per

cent down on 2001, and compared with£115.9 billion in 1992.

Wholesale and retail trades contributed£146.5 billion, growing by

4.8 per cent over 2001, and compared with£79.6 billion in 1992.

Manufacturing industries' contribution to whole economy GVA passed a

key milestone in 1999 by falling below 20 per cent for the first

time, and in 2002 the contribution of the manufacturing industries

stood at only 15.9 per cent. Similarly, the agriculture industries'

contribution in 2001 fell below 1.0 per cent for the first time,

whereas the contribution of the business and financial services

passed 30 per cent in 2002 for the first time.

Information and communication technologies (ICT)

Throughout the 1990s, the rapid growth in both pro duction and

investment in ICT was an important contributor to UK productivity and

economic growth. In addition, ICT investment has added to the UK

capital stock and capital services, which will continue to influence

the UK economy in the future.

In 2002, the contribution of ICT to whole economy GVA at current

basic prices accounted for£61.8 billion out of the£926.3 billion

total. This was 6.7 per cent of the total. GVA for the ICT sector

grew by 104.0 per cent between 1992 and 2002 compared with whole

economy growth of only 69.6 per cent over the same period.

Creative sector

In 2002, the creative sector - which includes film, arts, publishing,

advertising and software production - accounted for GVA of£80.9

billion out of a total of£926.3 billion (8.7 per cent of the total).

GVA for the creative sector grew by 93.2 per cent between 1992 and

2002 compared with the growth of GVA for the whole economy of only

69.6 per cent over the same period.

Food sector

Cultural changes in food consumption over the past decade, with

people eating out more regularly and enjoying a much broader range of

dishes, have had an impact on the UK economy. Growth in the

agriculture and food processing industries is failing to keep pace

with that of the whole economy, while the hotels, catering and pubs

industry was among the top ten industries for growth between 1992 and

2002.

Household spending on all food sector products stood at£160.3

billion in 2002, up 61.5 per cent between 1992 and 2002. By

comparison, spending on catering products consumed outside the home

grew by 85.0 per cent. In 2002, the contribution of the food sector

to whole economy GVA accounted for£74.0 billion out of a total of

£926.3 billion (8.0 per cent of the total). GVA for the food sector

grew by only 27.3 per cent between 1995 and 2002 compared with the

growth of GVA for the whole economy of 44.9 per cent ove r the same

period.

Oil and gas sector

In 2002, the contribution of the oil and gas sector to whole economy

GVA at current basic prices accounted for£27.7 billion out of a

total of£926.3 billion (3.0 per cent of the total). GVA for the oil

and gas sector grew by 61.5 per cent between 1992 and 2002, compared

with the growth of GVA for the whole economy of 69.6 per cent over

the same period. The profile of profits and GVA for this industry

correlates well with the price of crude oil.

Outputs from this sector impact on the production of most goods and

services. Clearly, they are inputs for fuel and heating production

but what today's analyses show is their vital role in producing

plastics, paints, cleaning products, clothing, furniture,

pharmaceuticals, synthetic rubber, electricity generation and many

more products essential to the economy.

Contribution of top five businesses to each industry, 2002 This

analysis shows for each industry the top five businesses' total

output and GVA at current basic prices as a percentage of the

industry's total output and GVA at current basic prices.

In the UK, a few very large businesses dominate industries like gas,

sugar, cement, tobacco, air transport and banking and finance.

Fastest growing industries

The ten fastest growing industry groups over the period 1992 to 2002,

weighted in terms of percentage and value change in monetary terms,

are as follows:

1 Computer and related services

2 Other business services

3 Insurance and pension funds

4 Recreational and sporting activities

5 Letting of dwellings

6 Owning and dealing in real estate

7 Oil and gas extraction

8 Hotels, catering, pubs etc

9 Market research, management consultancy etc

10 Legal activities

BACKGROUND NOTES

1. United Kingdom Input-Output Analyses, 2004 Edition. ISSN

1741-7155. Available as a web-only publication on

www.statistics.gov.uk/inputoutput

2. The United Kingdom Input-Output

Analyses is one of three ONS annual National Accounts publications

published on 20 August 2004. All three products are consistent with

the data published on 30 June 2004 in the Quarterly National Accounts

release and the electronic data released on 23 July 2004. The three

products are:

* United Kingdom National Accounts - The Blue Book (available in hard

copy & electronic form)

* United Kingdom Balance of Payments - The Pink Book (available in

hard copy & electronic form)

* United Kingdom Input-Output Analyses, 2004 Edition (available in

electronic form only)

3. GVA is a measure of the output of the economy. GDP differs from

GVA in that GDP includes taxes on products and excludes subsidies on

products. 4. Details of the policy governing the release of new data

are available from the ONS press office.

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