MNI INTERVIEW: Methodology May Boost UK Rebound-ONS GDP Head

Differences between the way the UK and other countries measure the contributions of public sector services to gross domestic product may mean it sees a slightly more pronounced bounce in headline output compared to elsewhere following a steeper contraction during the Covid emergency, a senior statistician told MNI.

UK statistics are quicker at capturing measures of output for education, which meant that the massive disruption to classroom teaching caused by the pandemic drained GDP more than in other countries which concentrate on inputs such as teachers' pay, Rob Kent-Smith, Head of GDP at the Office for National Statistics, said in an interview.

These methodological differences, which also apply to the health sector, drained the UK public sector's contribution to GDP relative to international peers, although the effect was relatively small, Kent-Smith noted. Excluding the public sector, third quarter 2020 GDP declined by 8.5% versus the fourth quarter of 2019, versus an 8.6% decline including government activity, he said.

The UK is able to capture output measures into its statistics more quickly thanks to better availability of data, but other European countries might be able to take it more into account in the coming months, he said.

REVISIONS

"It might well be that over time that you see some revisions to other countries GDP as more mature sets of data become available to them," Kent-Smith said.

The education industry contributes 5.7% of GDP, with state education accounting for around 3.9%. The ONS reported a decline of 24.7% of education output in Q2, when schools were shut, before it rebounded by 25.1% in Q3.

The lost hours of education during the pandemic will not be recovered for output, Kent-Smith noted.

"If we end up with an education service that looks pretty much like it did in February you would expect to see the level of education contribution to GDP to be at a similar level … of course, there is some lost output and unless something changes that will remain lost output," Kent-Smith.

The ONS will publish an international comparisons article on Feb. 1 looking at measures of health and education and the UK's tendency to spend more money on social consumption. It is working with the OECD on the issues.