GDP, North East: April to June 2019

• Regions of the UK
• Methodology used to produce these estimates
• GDP in the North East
• GDP in the North West
• GDP in Yorkshire and The Humber
• GDP in the East Midlands
• GDP in the West Midlands
• GDP in the East of England
• GDP in London
• GDP in the South West
• GDP in the South East
• GDP in Wales
• GDP in Scotland, published by the Scottish Government
• GDP in Northern Ireland, published by the Northern Ireland Statistics and Research Agency

Gross domestic product (GDP) in the North East fell by 0.8% in Quarter 2 (Apr to June) 2019, following growth of 0.7% in Quarter 1 (Jan to Mar) 2019. Compared with the same quarter of the previous year, GDP grew by 0.3%.

In Quarter 2 (Apr to June) 2019, half of the sectors fell. The services sector had the largest negative growth, at 2.9%, while production grew by 5.4%.

Over the last two years, the North East has shown moderate growth in the production sector. The services sector had been steadily increasing since Quarter 2 2018, but it fell in Quarter 2 2019. Construction fell up until Quarter 2 2018, but this sector saw a recovery in 2018 and continues to show growth.

In Quarter 2 (Apr to June) 2019, the arts, entertainment and recreation and human health and social work activities industries fell by 56.0% and 7.4% respectively and made the largest negative contributions to growth in the North East, at negative 0.87 percentage points and negative 0.79 percentage points respectively. The manufacturing industry experienced growth of 6.7% and made the largest positive contribution in the region, at 0.98 percentage points. Within the North East, services sectors contributed negatively to growth in gross domestic product (GDP) in Quarter 2 2019, with a contribution of negative 2.14 percentage points. Output in the production sector positively contributed, at 1.03 percentage points.

GDP

Gross domestic product (GDP) measures the value of goods and services produced in the UK. It estimates the size of and growth in the economy.

Production

Production is the process of combining various materials or other inputs in order to generate a product for consumption. It includes output in the manufacturing (the largest component of production), mining and quarrying, energy supply, and water supply and waste management industries.

Services

Services are activities that people or businesses provide for a consumer or other businesses. The main components of the service industries are: wholesale and retail; hotels and restaurants; transport, storage and communication; business services and finance; and government and other services.

The main data for these estimates are turnover data from approximately 1.9 million Value Added Tax (VAT) returns. Information from the Inter-Departmental Business Register (IDBR) on workplace employment allows us to apportion the VAT turnover for each business based on its employment share within a region. The quality assurance of administrative data (QAAD) report for VAT turnover data is available.

Other volume measure data are used where appropriate or where VAT data have insufficient coverage. A full list of other data sources is included in the methodology article.

A detailed analysis of these new data was published in the Economic Review on 21 October 2019.

Additional analysis has allowed us to now publish a longer back series. This includes data from Quarter 2 (Apr to June) 2012. This publication includes a consistent time series of growth rates and indices back to 2012; these data are consistent with the Blue Book 2019-consistent regional accounts estimates published in December 2019. We use a statistical algorithm to automatically align our datasets, to ensure consistency.

We welcome feedback and comments on this publication, including on presentation and further development of other data sources.

These data are designated as Experimental Statistics. These are statistics that are in the testing phase. We will continue to develop these statistics and seek users’ views on their uses and needs for these data.

While the data sources and methods used in both our regional and national estimates of gross domestic product (GDP) are broadly similar, there are some clear differences. For example, in the extent to which Value Added Tax (VAT) data are used in the compliation of these estimates.

These estimates aim to produce the best estimates at a subnational level. However, the sum of the UK regions may not equal the national total, reflecting that there are some differences in data sources and methods. We have constrained our regional GDP estimates in such a way that minimises the changes to the region by industry quarterly growth rates using automated statistical methods. While the overall impact of this constraining on the regional estimates is small, we will continue to examine the impact of this method and consider options to determine which one is best suited to these data in advance of applying to be assessed as National Statistics.

Following the announcement by the UK Statistics Authority (UKSA) in March 2019, Construction Output Price Indices (OPIs), UK; Construction output in Great Britain; and construction new orders were re-designated as National Statistics. It was noted, however, that the subnational and subsector breakdowns were excluded from consideration because of concerns around the path of the subnational estimates of construction output. We have worked closely with the Construction Statistics Steering Group and Consultative Committee on Construction Industry Statistics (CCCIS) on improving these estimates. While these users have acknowledged the improvements in the modelling of these estimates, there is ongoing development work to improve these lower-level estimates as we ultimately look to regain National Statistic status in due course. Any developments in this area will in turn lead to improved accuracy in the regional GDP estimates.