The Regional National Insurance Contributions (NICs) holiday for new businesses has got off to a slow start. It was due to run from September 2010 and the objective was to “move towards a new and more balanced model of economic growth by promoting the formation of new businesses in areas that are most reliant on public sector employment.” It was estimated that, over three years, “around 400,000 employers will claim the relief with regard to around 800,000 employees” (HMRC impact assessment).
According to figures to 21 November 2011 only 3,345 employers are claiming for 2010-2011 covering 12,411 jobs (10,170 successful employer applications in total) – see Parliamentary Deposited Papers DEP2011-2087.
Maps of private and public sector employment are available here from ONS (national statistics) but the impact of commuting and other factors mean that analysis is not straightforward. For a subregional analysis covering of some of the issues, see this article .
Labour Productivity – Q3 2011
- UK labour productivity increased by 0.2 per cent in the third quarter of 2011 on an output per hour basis, while market sector productivity fell by 0.1 per cent.
- Productivity of the production industries rose by 1.2 per cent, within which manufacturing productivity rose by 1.4 per cent to a record level.
- Productivity of the service sector increased by 0.3 per cent in the third quarter.
- UK unit labour costs increased by 0.5 per cent. Within the manufacturing sector, unit wage costs fell by 0.4 per cent.
Quarterly National Accounts Q3 2011
- UK gross domestic product (GDP) in volume terms increased by 0.6 per cent in the third quarter of 2011
- Output of the production industries rose by 0.2 per cent, within which manufacturing rose by 0.1 per cent
- Output of the service industries increased by 0.7 per cent, while output of the construction industries increased by 0.3 per cent
- Household final consumption expenditure was unchanged in volume terms in the latest quarter
- Real household disposable income rose by 0.3 per cent in 2011 quarter three
- The UK’s current account deficit was £15.2 billion in the third quarter of 2011, the highest on record.
- The trade deficit widened to £9.9 billion in the third quarter of 2011, up from £7.2 billion the previous quarter.
- The income surplus was £0.3 billion, the smallest surplus since the fourth quarter of 2000.
- The financial account recorded net inward investment of £22.0 billion during the third quarter of 2011.
- The international investment position recorded UK net liabilities of £245.5 billion at the end of the third quarter 2011.
- Economic statistics for October and November suggest a continuation of the subdued economic conditions that have prevailed in recent months. Manufacturing output fell in October, and construction activity remained weak. Labour market indicators were also weak, with a further rise in unemployment in the latest three months, accompanied by continuing modest earnings growth.
- Bright spots were relatively narrowly confined – for instance the strong growth in exports in October, albeit from a low September base, and the continuing buoyancy of on-line retail sales in November. And consumer price inflation eased for the second month running to an annual rate of 4.8 per cent in November.
- The latest GDP estimates for the third quarter of 2011 also show patchy growth. Even in the services sector, which provided the mainstay of aggregate economic growth, strength was not broadly based, being confined to a small number of sub-sectors. In terms of expenditure
components, the main drivers of sustainable growth – household consumption, business investment and overseas trade – were all noticeably weak.
- The volume of expenditure on goods and services (seasonally adjusted) was flat in Q3 2011, following 3 quarters of negative growth.
- Housing expenditure (which includes fuels and rental charges) showed the largest positive contribution to growth in volume terms.
- Miscellaneous goods and services (which include financial services and insurance) showed the largest negative contributions to volume growth.
- In current prices, seasonally adjusted household expenditure increased by 0.8 per cent.
- The household expenditure implied deflator (a measure of price pressures faced by households) increased by 0.7 per cent
Detailed estimates of national product, income and expenditure, UK sector accounts and UK balance of payments
First Retail Sales growth for 7 months but little cheer in December
- The CBI has published its latest monthly Distributive Trades Survey, which covers the first two weeks in December.
- 41% of companies said sales rose on a year ago in Decembe, 32% reported a fall, giving a balance of +9%.
- This was better than expected and the first year-on-year sales growth since May (+18%).
- However, volumes of sales were poor for the time of year with a balance of -16% well below the long-run average.
Paper from the TUC arguing that, in the UK, the neo-liberal hatred of employment protection legislation is not justified by the evidence.