Sub-Regional Productivity - October 2011

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Sub-Regional Productivity, October 2011 Author Name(s): Richard Prothero, Regional Economic Analysis

Abstract This article provides experimental statistics covering sub-regional productivity measures

Introduction In January 2009, the National Statistician produced an article examining the measurement of regional economic performance. The article discussed the limitations of GVA per head as a measurement of the economic performance of a region and the income of its residents. The article instead proposed that to understand regional economic performance a suite of indicators should be used. These include the productivity measures GVA per filled job and GVA per hour. The themes of the National Statistician's article also apply to the analysis of sub-regional economic performance. At the sub-regional level it is therefore recommended that GVA per head is not used as a proxy for measuring sub-regional economic performance but rather that a suite of indicators should be used including measures of productivity. In practice, however, while the Office for National Statistics (ONS) does publish an annual series of regional productivity measures, it has to date not published sub-regional productivity data. This article fills this gap by producing experimental sub-regional productivity data; namely GVA per filled job and GVA per hour worked. Notes 1. National Statistician’s article: measuring regional economic performance (Jan 2009). http://www.ons.gov.uk/ons/rel/elmr/economic-and-labour-market-review/no--1--january-2009/ measuring-regional-economic-performance.pdf

Methodology Regional productivity data is published by ONS in the ‘Productivity Measures by Region’ table which is updated annually in the Labour Productivity Statistical Bulletin (Q3). This regional table includes two productivity measures; GVA per filled job and GVA per hour worked.

Office for National Statistics | 1

10 October 2011

The sub-regional productivity data has been compiled to be consistent with the data in this regional table. This requires ensuring that the sub-regional measures of GVA, jobs and hours are all consistent with the regional totals. This has been carried out as follows:-

GVA Regional GVA data is published by ONS as either smoothed (Headline) GVA or unsmoothed GVA. Regional productivity calculations use the unsmoothed workplace based GVA at current basic prices series (Table 1.7 in the regional GVA document included in the useful links – see Note 3). Therefore, to calculate sub-regional productivity, GVA at NUTS 2 and NUTS 3 geographies has been calculated to be constrained to this unsmoothed NUTS 1 GVA data series. This means that the sub-regional GVA data being used in these sub-regional productivity calculations differs slightly from the GVA data series currently published by ONS for NUTS 2 and NUTS 3 sub-regions. This is because the published sub-regional GVA data are all constrained to the Headline NUTS 1 GVA series, whereas the data being used in these productivity calculations is constrained to the unsmoothed NUTS 1 GVA seri