Transcript Bank of England Inflation Report February 2007

Inflation Report
February 2007
Output and supply
Chart 3.1 Measures of aggregate output growth(a)
(a) Market sector output is a Bank estimate. It excludes output that does not have a market-determined price, such as government-provided education. The 2006 Q4 estimate is
constructed using information in the preliminary GDP release. Whole-economy output is the ONS measure of gross value added at basic prices.
Chart 3.2 Indicators of private service sector output
Sources: CIPS/RBS and ONS.
(a) Bank estimate of private services. This excludes distribution, to be comparable to CIPS/RBS data, and represents 44% of aggregate gross value added in 2003.
(b) A reading above 50 indicates rising private service sector activity compared with the previous period. Average of the past four quarters.
Chart 3.3 Official estimates of population and workforce(a)
Source: Labour Force Survey.
(a) Three-month moving average measures. Estimates for all aged 16 and over. Population data are interpolated using mid-year estimates and from mid-2005 are based on projections by
GAD/ONS.
(b) Workforce defined as those already working and those actively looking for work.
Chart 3.4 Employment and participation rates(a)
Source: Labour Force Survey.
(a) Three-month moving average measures. Percentages of working-age population.
(b) The percentage of the working-age population in the workforce.
Chart 3.5 Estimated annual net migration to the United Kingdom
Sources: Data from 1855–1924 in International Migrations, Vol. 1, 1929, edited by Wilcox, W F (with introduction by Ferenzci, I), New York, National Bureau of Economic Research;
data from 1925–64 in Board of Trade Journal, © Crown Copyright 2007. Both cited in Mitchell, B R (1988), British Historical Statistics, Cambridge University Press, pages 77–80.
Data prior to 1964 show UK net flows from non-European countries to UK ports. There are some gaps in coverage. Data from 1964 onwards are ONS estimates.
Chart 3.6 Estimated population and headcount
Sources: Civil Aviation Authority — Airports Statistics and ONS.
(a) Quarterly net flows from the CAA/ONS data are added to the 1991 ONS census population estimate and adjusted for births and deaths. The data do not capture flows through the
Channel Tunnel.
(b) Based on interpolated mid-year population estimates.
Chart 3.7 Agents’ survey: main reasons for use of migrant
labour(a)
(a) Based on responses from surveys by the Bank’s regional Agents in November 2005 and 2006, weighted by respondents’ number of employees. There were 160 responses in 2006 and
159 in 2005.
Chart 3.8 Private sector capital services(a)
(a) See Oulton, N and Srinivasan, S (2003), ‘Capital stocks, capital services, and depreciation: an integrated framework’, Bank of England Working Paper no. 192, for a discussion of
how these data are constructed.
Chart 3.9 Market sector output per worker(a)
(a) Market sector output, as defined in Chart 3.1, divided by private sector employment. The employment data have been calculated by subtracting ONS general government
employment from total LFS employment. The estimate for 2006 Q4 is constructed using information in the preliminary GDP release and the assumption that private sector
employment in 2006 Q4 grew at the same rate as total employment in the three months to November.
(b) Average annual growth since 1997.
Chart 3.10 Measures of capacity utilisation(a)
Sources: Bank of England, BCC and CBI.
(a) Three measures are produced by weighting together surveys from the Bank’s regional Agents (manufacturing, services), the BCC (manufacturing, services), and the CBI
(manufacturing, financial services, business/consumer services, distributive trades), using nominal shares in output. The chart shows the range between minimum and maximum
readings in each quarter.
Chart 3.11 Measures of labour market tightness
Sources: Labour Force Survey and Bank calculations.
(a) Percentage of the working-age population. Three-month moving average measure. This measure weights together the different types of non-employed by a proxy of their
likelihood of finding work based on transition rates into employment derived from the Labour Force Survey (LFS). Weights are backward-looking four-quarter moving averages of the
quarterly transition rates of each group into employment. These weights have recently been updated.
(b) Percentage of the economically active population. Three-month moving average measure.
Chart 3.12 Contributions to annual employment growth(a)
Source: Labour Force Survey.
(a) Quarterly data. Latest figure is for the three months to November 2006.
Tables
Table 3.A Measures of manufacturing activity
Averages
since 1997
ONS(a)
CIPS/RBS(b)
Output
New orders
2005
Averages
2006
Q2
Q3
Q4
2007
Jan.
0.1
-0.5
0.9
0.7
0.0
n.a.
52.5
52.1
52.2
51.5
56.8
56.2
55.9
53.9
53.6
53.8
53.6
54.1
4
4
12
13
8
12
11
12
13
18
31
n.a.
CBI(c)
BCC(d)
Sources: BCC, CBI, CIPS/RBS and ONS.
(a) Percentage change on a quarter earlier.
(b) A reading above 50 indicates increasing output/orders, and below 50 suggests falling output/orders. Averages of monthly indices.
(c) Percentage balances of respondents expecting ‘higher’ relative to ‘lower’ output in the next three months. Averages of monthly indices.
(d) Percentage balances of respondents reporting domestic sales to be ‘up’ relative to ‘down’ over the past three months.
Aggregate measures
of activity
Chart A Measures of aggregate output growth(a)
(a) Whole-economy output is gross value added at basic prices. Bank estimates of market sector output and demand for resources. The 2006 Q4 estimates are constructed using
information in the preliminary GDP release.