Capital services (VICS)
The stream of services that are drawn from a stock of capital, as opposed to the capital stock itself. It is arguably the stream of capital services that contribute to productivity growth, rather than the stock of capital itself.
Group of seven countries, made up of the US, Canada, Japan, Germany, France, Italy and the UK.
Gross value added (GVA)
The additional value generated by any unit engaged in production, over and above the value of the inputs to that production. It can also be defined as the difference between total output and intermediate consumption for any given sector or industry. It is measured at basic prices, excluding taxes less subsidies on products.
A measure of the average level of prices, quantities or other quantifiable characteristics relative to their level for a defined
or location. It is usually expressed as relative to 100 (for example, 105 would be an increase of 5 per cent) where 100 is the value for the reference period or location.
This is the internationally standardised method for classifying the extensive range of industrial sectors in an economy. At the highest level, the economy can be divided into the market sector and the public sector. It can then be broken down into nine sections, and each section can be broken down into further sectors and subsectors.
In the employed sector, this is largely made up of wages and salaries, but there are some other components that are added to wages and salaries to make up ‘Compensation of Employees’. These other components include other forms of remuneration such as national insurance or pension contributions. For the self-employed sector, it is not possible to attribute income specifically to labour or to capital, so the returns to labour and capital are grouped into one term called ‘Mixed Income’. However, for some productivity measures, notably unit wage costs, it is necessary to derive an estimate for the returns to self-employed labour. This is done by assuming that the proportions of either hours worked or returns to labour are the same in the self-employed sector as they are in the employed sector.
In terms of input to productivity measures, this is the flow of productive labour.
Labour Market Statistics (LMS)
A measure of many different aspects of the labour market that provide an insight into the economy. They are also very much about people, including: their participation in the labour force; the types of work they do; earnings and benefits they receive; their educational qualifications; and their working patterns.
LFS (Labour Force Survey)
An ONS survey of households in
that provides information about people’s employment status and conditions. It asks individuals about their current and previous jobs including which industries they work in, which jobs they hold within the industry and how many hours they work. It also enquires about related topics such as training, qualifications, income and disability.
Local Unit (LU) employees
The industrial classification of the local unit of an enterprise is used to classify employee jobs, rather than the ‘reporting unit’ industrial classification. This is particularly relevant when an enterprise has numerous local units in more than one industrial function and in more than one geographical region. For example, a supermarket may provide pharmaceutical services, insurance and various other services besides selling supermarket-related goods and services, predominantly food and other domestic or household goods.
Part of the economy that is ‘traded’ in or through some form of a market, and therefore, not the public sector.
This is also termed ‘total factor productivity’. This is an alternative, more complex, method of estimating productivity growth. A wider range of factors of production are taken into account, rather than just labour, with the growth that is not attributed to growth in capital or labour (or other factors of production
intermediate inputs) being productivity growth.
The ratio between what is obtained (output) and what is put in to obtain that output (input). It provides an indicator of the efficiency, competitiveness and underlying ‘potential growth’ of an economy. At its simplest and most frequently used, labour productivity refers to the amount of output per unit of labour used, whether that labour is defined as workers, hours worked or jobs. A more complex measure of productivity is multifactor, or total factor, productivity, which attributes increases in output to a range of inputs, such as labour and capital, and potentially other forms of input, with the remaining increase in output being attributed to ‘productivity’.
This is the productivity jobs series, that is, adjusted from local unit (LU) to reporting unit (RU) level and industrial classification, multiplied by hours worked for that industry from the Labour Force Survey.
Quality adjusted labour input (QALI)
Since labour, or workers, is not homogenous, this methodology enables labour input to be adjusted to take account of qualifications, age (proxy for experience), gender and industrial sector. However, this methodology, or series, is only used in the estimation of multifactor productivity, in which output growth is attributed to factors of production leaving productivity residual, and not the Office for National Statistics (ONS) standard labour input productivity estimates.
Reporting unit (RU) employees
Indicates that the industrial classification of the reporting unit of an enterprise is used to classify employee jobs, rather than the local unit industrial classification. RU-based jobs in aggregate is the sum of RU employees plus HM Forces plus Government Supported Trainees plus self-employed. For the employee jobs component, an enterprise with local units in a number of sectors will take the industrial classification of the reporting unit.
This is the part of the economy that is involved in providing or delivering services, rather than making or producing physical goods or outputs. It is made up of a very wide range of services, including wholesale and retail services, hotels and catering, transport and communications, financial and business services, recreational services, public services which includes education, health, social services and defence. It is distinct from the other sectors of the economy – agriculture, fishing and forestry, mining, construction and manufacturing.
Unit Wage Costs
Indicates the cost in labour terms of producing a unit of output. This is another way of assessing productivity.