Inflation Report May 2013 Output and supply

Chart 3.1 GDP and sectoral output (a) (a)Chained-volume measures. GDP is at market prices. Indices of sectoral output are at basic prices. The figures in parentheses show 2009 weights in gross value added.

Chart 3.2 Level of whole-economy employment compared with previous recessions (a) Source: ONS (including the Labour Force Survey). (a)Recessions are defined as at least two consecutive quarters of falling output (at constant market prices) estimated using the latest data. (b)The diamond shows an estimate for 2013 Q1 based on data for the three months to February.

Chart 3.3 Private sector output and employment Sources: ONS (including the Labour Force Survey) and Bank calculations. (a)LFS private sector employment. Calculated as the difference between LFS whole-economy employment and total public sector employment excluding publicly owned English further education corporations and sixth-form college corporations from the ONS’s public sector employment release, adjusted to be on a calendar-quarter basis. Data start in 2000 Q2. (b)Market sector gross value added. Chained-volume measure at market prices.

Chart 3.4 Flows into and out of employment (a) Source: ONS (including the Labour Force Survey). (a)Two-quarter moving averages. (b) Recessions are defined as at least two consecutive quarters of falling output (at constant market prices) estimated using the latest data. The recessions are assumed to end once output began to rise.

Chart 3.5 Company liquidations in England and Wales and GDP Sources: The Insolvency Service and ONS. (a)Recessions are defined as in Chart 3.4. (b)Changes to legislation, data sources and methods of compilation mean the statistics should not be treated as a continuous and consistent time series. Since the Enterprise Act 2002, a number of administrations have subsequently converted to creditors’ voluntary liquidations. These liquidations are excluded from both the headline figures published by The Insolvency Service and the chart. (c)Chained-volume measure at market prices.

Chart 3.6 Survey indicators of capacity utilisation (a) Sources: Bank of England, BCC, CBI, CBI/PwC and ONS. (a)Three measures are produced by weighting together surveys from the Bank’s Agents (manufacturing and services), the BCC (non-services and services) and the CBI (manufacturing, financial services, business/consumer services and distributive trades) using nominal shares in value added. The BCC data are non seasonally adjusted.

Chart 3.7 Employment and unemployment rates (a) Source: ONS (including the Labour Force Survey). (a)Rolling three-month measures. (b)Recessions are defined as in Chart 3.4. (c)Percentage of the 16–64 population. (d)Percentage of the economically active population.

Tables

Table 3.A Survey indicators of manufacturing and services output growth Sources: BCC, CBI, CBI/PwC, Markit Economics, ONS and Bank calculations. (a) Markit/CIPS data are for April. (b) Net percentage balances of respondents reporting an increase in domestic sales in the non-services and services sectors, weighted together using nominal shares in value added. Data are non seasonally adjusted. (c) Net percentage balances of respondents reporting an increase in the volume of output in the manufacturing sector, in the volume of business in the financial services and business/consumer services sectors, and in the volume of sales in the distributive trades sector, weighted together using nominal shares in value added. (d) Indices of changes in output (manufacturing) and business activity (services), weighted together using nominal shares in value added. (e) Chained-volume measure at market prices. (f) The figure for Q2 shows Bank staff’s central projection for the preliminary estimate of GDP growth. The range shown in parentheses is based on staff estimates of the root mean squared errors of forecasts for quarterly GDP growth made since As the staff projection is for the preliminary estimate of GDP, it can differ from that used to construct the GDP fan in Chart 5.1, because the latter is based on the MPC’s best collective judgement of the final estimate of GDP.

Table 3.B Selected indicators of labour market slack Sources: ONS (including the Labour Force Survey) and Bank calculations. (a)Unless otherwise stated. (b) The figure for 2013 Q1 shows data for the three months to February. (c) Defined as those people who have been unemployed for more than twelve months divided by the economically active population. (d) Percentage of the 16–64 population. This measure weights together different types of non-employed by the 1998–2007 averages of quarterly transition rates of each group into employment derived from the LFS. (e)Number of vacancies (excluding agriculture, forestry and fishing) divided by LFS unemployment. Average is since 2001 Q2. (f)Number of people reporting to the LFS that they are working part-time because they could not find a full-time job, as a percentage of LFS total employment.

The participation rate and labour supply

Chart A Participation rate compared with previous recessions (a) Source: ONS (including the Labour Force Survey). (a)Percentage of the 16+ population. Three-month rolling measure. Recessions are defined as in Chart 3.2. (b) The diamond shows an estimate for 2013 Q1 based on data for the three months to February.

Chart B Selected participation and retirement rates by age Source: ONS (including the Labour Force Survey). (a)Those aged 16–64 who are retired as a percentage of the 16–64 population. (b) Those aged 65+ who are economically active as a percentage of the 65+ population.