Uk Growth: 2008 – 2016
November 17, 2017
In the eight years 2008-2016 the UK economy only grew by about 10 pc and currently is slowing further. This 10pc is about £173bn in constant price terms. The growth driver has been the service sector and within that sector over the same period four subsectors have in aggregate grown by around £180bn as gross value added (GVA).
Administration and Support Services – GVA growth £50bn
Professional Scientific and Support Services – GVA growth £51bn
Information and Communication Serivces – GVA growth £36bn
Retail and Wholesale – GVA growth £44bn
Other sectors have grown – for example the Manufacturing Sector grew by. £20bn. Indeed the non financial private sector which accounts for about 60pc of the economy grew by around £290bn or CAGR of 3.5pc. This suggests that the problem of slow growth is concentrated in the other 40pc. Has the economic policy of austerity restricted the growth of the public sector to the overall detriment of the economy as a whole for example ?
The problems of the financial sector have been widely discussed and the sector faces further challenges with Brexit. Austerity is likely to continue under the present Government and so future UK economic growth is likely to rely on the service sector especially the hot spots.
The four subsectors listed above probably form a cluster with a network of commercial and other linkages between the relevant firms mutually contributing to the overall strength of the cluster. Within the cluster the CAGR has been an impressive 9pc.
The Government is committed to producing an industrial strategy and these figures suggest that a key plank of the strategy should be accelerating the spread of the tools and techniques that have helped drive the high growth service sectors to other parts of the economy.
Author: Iain Cameron.