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Output and expenditure in the last three UK recessions
Abstract
This article describes the main features of the last three UK recessions using the output and expenditure measures of Gross Domestic Product (GDP) to reflect supply and demand activity in the economy. The most recent recession saw a similar peak to trough fall in GDP as the early 1980s recession. Both these recessions, which coincided with a period of downturn in the global economy, were more severe than the early 1990s recession where the peak to trough fall in output was relatively modest. The services sector made a larger contribution to the latest recession than before, perhaps reflecting the growing share of the sector in total UK output and its strong growth in the years leading up to the downturn. Falling output of business and financial services were a particular feature of the most recent recession. Looking at the expenditure side, gross fixed capital formation, and in particular business investment, was a greater contributor to the fall in GDP in the most recent recession than in the early 1980s and early 1990s recessions.
... As one of the measurements in economic development, GRDP is a useful indicator to learn about the productivities of the local economy, especially to measure the output and economic growth (Chamberlin, 2010). Jurun & Pivac (2011) have conducted a comparative study regarding GRDP in Croatia. ...
... The research about investment mainly found in the economic literature review in various countries by several researchers. Such as Chamberlin (2010), and Awan, Khan, & Zaman (2011). Chamberlin (2010) in his article stated that when a recession took place in England, the nett of export had a positive contribution to the economic growth. ...
... Such as Chamberlin (2010), and Awan, Khan, & Zaman (2011). Chamberlin (2010) in his article stated that when a recession took place in England, the nett of export had a positive contribution to the economic growth. Even by the end of the economic recession, such contribution has become more significant. ...
The aim of this study is to analyze the influence of employment, investment and the number of tourists towards GRDP in Yogyakarta. The data used in this research is a time series data for the period of 1999-2013. This research employed multiple regression and dynamic regression, namely partial adjustment model. The multiple regression estimation shows that employment has negative effect to GRDP, meanwhile the investment and the number of tourists have a positive relation towards dependent variable. Moreover, based on partial adjustment model, adjustment process also influences the output accumulation in Yogyakarta. Therefore, to develop the local economy, the government may invite more tourists as well as increase investment in Yogyakarta.
... On this basis, the recent downturn in the economy has been more severe than the previous. For the early 1990s recession (1990 Q3 to 1992 Q2), the peak to trough fall in GDP was 2.5% but during the 2008 Q2 to 2009 Q3 recessionary period, it was 6.4% (Chamberlin 2010). Fig. 1 shows the quarterly change in GDP for a period incorporating both these recessions. ...
... There was also a movement towards more supply and fix subcontracting, partly because of the growth of management contracting. After the housing and property development booms of the 1980s, the tighter monetary policy that followed it led the UK economy into recession in 1990 (Chamberlin 2010). As conditions changed from boom to recession, companies were forced to move quickly to reduce debt, make cost savings, offload staff and restructure in order to rebuild and D r a f t v e r s i o n f o r A u t h o r o n l y balance their businesses in an attempt to achieve comparative advantage. ...
... The longer and deeper is the impact on a company, the greater the need for more radical action. From 1990 it took forty four months for GDP to return to its pre-recession level (Chamberlin 2010). The weakness of the prolonged recovery from the 2008 (and ensuing) Cost control actions were reported as important in all the studies. ...
Firms in the construction industry have always had to deal with the challenges of the economic cycle and develop strategies to deal with the resulting fluctuations in their business environment. In the context of the 2008–2011 double-dip recession in the UK, the results of a survey targeting the top one hundred construction companies in the UK are reported here. This research is particularly intended to assess whether the strategies of large companies in the construction sector, when faced with the issues associated with the variation in the economic cycle, have changed since the previous business cycle (i.e. the 1986–1990 boom followed by the 1990–1991 recession). The survey reveals the challenges that companies have faced, reports on company behaviour and on the policies adopted. While there are many similarities between policies adopted during the recessionary periods of the two cycles, the research found notable changes in attitudes towards diversification, human resource management and price bidding.
... Researches on investment were done by some economists in many countries (Baek dan Koo, 2009;Clowes, 2010;Cheong, and Wu, 2013;Cheung, 2014). Chamberlin (2010) in his article says that when the recession lasted in UK net exports contributed beneficially to the economic growth. At the end of the economic recession the contribution got more significant. ...
... This in turn has reduced the economic growth. These findings prove the link between globalization and the economy of the states as proposed by Brooks (1998), Chamberlin (2010, and Cheong and Wu (2013). Investment i nfluence on economic growth Table 5 shows that the value of t-test and the probability of investment is 0.526195 and 0,6052, respectively. ...
This study analyzes the impact of some factors, especially the implementation of autonomy and monetary crisis on economic growth in Yogyakarta Special Province. The independent variables entered into the model are investment, labor force and government spending, as well as two dummy variables, namely the financial crisis and the 1990-2013 regional autonomy implementations. This study uses multiple linear regression analysis with Ordinary Least Square (OLS). This study finds that investment and regional autonomy do not affect the economic growth in Yogyakarta, while labor force and monetary crisis negatively affect economic growth. The study also finds that government spending has a positive influence on economic growth.
... GRDP is the aggregate of gross value added of all resident producer units in the region. It is an important indicator that can be used to measure the size of the economy of the region (Chamberlin, 2010). Hence, the variables that impact the GRDP will be similar to those that influence the GDP. ...
The allocation of funds in the local budget is a matter of concern for the governments and economic scholars. The study examines the influence of local budget expenditures on the GRDP per capita of 63 provinces and municipalities in Vietnam from 2018 to 2022. Regression analysis of panel data reveals that capital expenditure has a positive correlation with local GRDP per capita, whereas current expenditure has a negative correlation with GRDP per capita. Furthermore, the analysis indicates that the percentage of individuals aged 15 and above who are employed and the percentage of urban citizens have an equivalent influence as the GRDP per capita. Conversely, the average age and local Gini coefficient have contrasting effects on GRDP per capita. The author suggests several policy alternatives to assist localities in boosting their GRDP per capita based on the findings of the study model.
... Fiscal and monetary policies have been used on numerous occasions in an attempt to stabilise construction cycles [12], which result from the disproportionate share of corporate insolvency and individual bankruptcy in relation to the wider economy in the UK [13]. In addition, the construction industry is among the greatest contributors to GDP in the UK, attributing to the purpose of prioritisation regarding policy [14]. Adaptability and reaction to change is essential for survival and to avoid insolvency. ...
COVID-19 presented a catastrophic event, creating a unique environment and resulting in lasting repercussions globally. The construction industry has been one of the worst affected sectors relating to the public health pandemic. Challenges such as workplace closures and site cessations led to untold uncertainty, developing into contractual grievances and supply-chain disruption, amongst others. The focus of this study is to determine the response strategies of UK construction companies in the face of the COVID-19 global pandemic and the subsequent recession the UK fell into as a direct result. A literature review of previous recession responses was examined and four areas for further consideration were identified, which included contracting, risk management, cost control and finance. The study compared the previous response strategies to identify whether lessons had been learned from prior experience, or if new strategies had emerged due to the different economic and political circumstances. A qualitative methodology was adopted to provide the required depth of analysis for the research. Thirty-two participants from different size construction organisations were interviewed, which provided evidence of strategies across the four categories analysed. The results indicated that in the early stages, uncertainty around all aspects of the pandemic caused organisations to anticipate the worst financial consequences, as the scale or scope of government intervention was initially unknown. As a result, companies reacted by downsizing, halting expansion, introducing competitive pricing to ensure there were projects in the pipeline and diversification to ensure stability and survival of the company. Organisations used the pandemic as an opportunity to restructure and invested in new technology to remain competitive. Client relationships and supply-chain partnerships were deemed to be of upmost importance in resolving contracting challenges that the pandemic brought about.
... On the expenditure side, particularly the gross fixed capital investment and business investment contributed more to the fall in GDP which suggested that confidence in the corporate sector was adversely affected due to the credit crunch. The household sector was not seriously affected until 2010 due to less severe impact on employment and sharp reduction in interest rate (Chamberlin, 2010). The employment rates remained higher compared to the previous recessions. ...
Given a recession that has affected the entire world economy and its constituent parts, both the way the recession impacts on different national economies and the ability of national economies to mitigate the recession are likely to be different. This paper concentrates on the latter not on the former per se. We examine what mitigating capability different national innovation systems have in relation to dealing with and responding to the current world financial and economic crises. The research question we would like to examine using descriptive comparative data is how far the relative strength or weakness of the NSI is capable of mitigating the adverse impact of the recession. We assume that that the nature and degree of impact of the recession across countries are likely to be different. In this paper we would like to take only the NSI factor in trying to account how such differences due to the individual characteristics of NSIs across different countries mitigate recessionary impact on given economies. We examine selected developed economies – Germany, Japan, and the United Kingdom to explore mitigating capabilities of different NSIs.
The extent of youth unemployment in the UK in the years following the 2008 economic crisis, as well as the backdrop of longer-term concern regarding the rise of precarious work (Beck 2000, Standing 2011) prompted discussions of a ‘lost generation’ of young people set to feel the economic scars from embarking on their careers at a time of economic turmoil. The 2008-2009 recession was also (dubiously) labelled a ‘mancession’ and the first ‘middle class recession’. Despite this, comparatively few sociology studies have adopted a quantitative approach to compare the class and gender dimensions of inequality in young people’s employment trajectories prior to and following the 2008-2009 recession. This research makes an original contribution to the field by using longitudinal sequence analysis methods to contrast the employment trajectories of two cohorts of 16 to 24 year olds in the UK: a pre-recession and a recession cohort. In doing so, it establishes the extent to which the patterns of class and gender inequality amongst young people, not only in unemployment, but also in the movement in and out of ‘precarious work’, differed prior to and following the 2008-2009 recession. It finds that precarious employment was not as widespread as ‘end of work’ theorists suggested but that the recession brought an increased minority of young people who experienced employment difficulty. Furthermore, it argues that the recession did not advantage or disadvantage class or gender groups in a uniform way. Rather, changing trends in the recession highlighted a number of complex and shifting patterns of inequality amongst young people of different genders and from differing class backgrounds.
The 1981 Budget is principally remembered for the decision to raise taxes in the depths of the worst UK recession for a generation. By tightening fiscal policy in a slump, Margaret Thatcher’s government flew in the face of the post-war Keynesian orthodoxy, famously incurring the wrath of the economics establishment. But, while the major public debates were over fiscal policy, an often neglected driver of the 1981 Budget was the need to restore monetary policy credibility. Like its Labour predecessor, the Conservative government had placed the fight against inflation at the heart of economic policy. Unlike its predecessor, it hoped to win the battle without resorting to an incomes policy. In March 1980, in line with Milton Friedman’s dictum that ‘inflation is always and everywhere a monetary phenomenon’, Sir Geoffrey Howe launched the Medium-Term Financial Strategy, laying out a four-year series of declining target ranges for the broad money supply (£M3), and explaining that ‘control of the money supply will over a period of years reduce the rate of inflation’. In March 1981, with M3 growth significantly above target and inflation still higher than when they had taken office, ministers recognised that the monetary leg of the MTFS was flawed. This chapter explains why it was flawed. Sir Adam Ridley suggests elsewhere in this volume that budget making is like organising a naval convoy. Here I extend the analogy to policy making in general. Successful monetary policy implementation requires that all three members of the ‘macroeconomic executive’ - the government, the Treasury and the Bank of England - be travelling in the same direction, if not always at precisely the same speed. In 1980-81 the government, the Treasury and the Bank were heading in broadly the same direction on fiscal policy.
Professional services firms (PSFs) have been the subject of much attention in the literature in recent years, ranging across a number of distinct but related disciplines including economics, sociology, organization and management studies. Analysis has tended to concentrate on law and accounting firms in particular, and although there is a growing academic interest in construction/built environment professional services firms (CPSFs), these have received much less scrutiny. However, many of the changes taking place among PSFs in particular, growth in firm size, moves towards external ownership and greater service/geographical diversification are also taking place among the larger CPSFs. The CPSF sector is not especially well documented and there is little understanding of the motives for, and implications of, these changes in the firms, their clients and wider society. CPSFs are reviewed in the context of the more general PSF literature and a set of questions is posed for future research on CPSFs. These questions include the need to understand the implications of firm type on performance, the form of ownership that might confer the greatest financial benefits for different stakeholder groups, and the wider societal consequences of continuing growth in size and diversification of CPSFs.
This paper examines trends in household consumption and saving behaviour in each of the last three recessions in the UK. The 'Great Recession' has been different from those that occurred in the 1980s and 1990s. It has been both deeper and longer, but also the composition of the cutbacks in consumption expenditures differs, with a greater reliance on cuts to non durable expenditure than was seen in previous recessions, and the distributional pattern across individuals differs. The young have cut back expenditure more than the old, as have mortgage holders compared to renters. By contrast, the impact of the recession has been similar across education groups. We present evidence that suggests that two aspects of fiscal policy in the UK in 2008 and 2009- the temporary reduction in the rate of VAT and a car scrappage scheme- had some success in encouraging households to increase durable purchases.
It is not known how many cats and dogs are admitted to welfare organisations annually. This study produced the first estimates of the size of this population. A questionnaire was mailed out to welfare organisations during 2010, followed by a postal/email reminder and requests to non-responders for a telephone interview. The questionnaire covered areas including, the current number of cats and dogs being housed, how much of the year organisations were operating at full capacity as well as the number of cats and dogs admitted, rehomed and euthanased between January and December 2009. Responses were obtained from 54.8 per cent of organisations. Sixty-six per cent of cat welfare organisations and 48 per cent of dog welfare organisations reported that they operated at full capacity for 12 months of the year. The number of cats and dogs entering UK welfare organisations during 2009 was estimated as 131,070 and 129,743, respectively. This highlights the scale of the work performed by welfare organisations in caring for and rehoming unwanted cats and dogs annually and emphasises the urgent need to address concerns over the considerable number of these animals. This study has also produced useful baseline data, which will be essential for monitoring population changes over time.
This article uses an input-output (IO) modelling approach to investigate the impact of the global recession on the expenditures of inbound and overnight domestic visitors and the wider effect on the UK economy. The results suggest that the economic crisis has had a negative direct impact on tourism in the UK of around £42 million, although this was the relatively small difference between a large increase in domestic holiday tourism and falls in business and visiting family, friends and relatives spending. In turn, this led to a negative indirect impact of £45 million, representing a £21 million net fall across the production chain and a £24 million net fall in the compensation of employees. Overall, the economy has suffered a total net loss of £87 million.
This article analyses and compares the movements in key labour market outcomes during the last three recessions and in the first six months of each recovery. These include: employment and jobs by industry and region, hours and wages, and unemployment and inactivity.
The household saving ratio summarises the income and expenditure positions of the household sector. This article considers developments in the ratio during the current recession, discussing the drivers in income and consumption and their interaction in the context of developments in the labour market, government policy and wider economic conditions.
This article investigates the impact of the significant rise and fall in UK house prices over the last decade on the balance sheets and behaviour of households – specifically relating to consumption, saving, indebtedness and wealth. Data is taken from the quarterly UK Economic Accounts which records income, spending and saving flows as well as the household sector’s holdings of financial assets and liabilities. This article is intended to follow up on the ‘Recent developments in the UK housing market’ article published in last month’s Economic and Labour Market Review.
This article uses publicly available statistics to describe recent key developments in the UK housing market. These include trends in UK house prices, indicators of affordability, availability of housing finance and the impact of demographic changes on housing needs. A future ELMR article will attempt to explain what impact these housing market developments have had on the balance sheets and behaviour of the household sector. Economic & Labour Market Review (2009) 3, 29–38; doi:10.1057/elmr.2009.141