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Transcript of ONS Economic Forum Email:[email protected] Twitter:@ONS # ONSeconomy
ONS Economic Forum
Email: [email protected]: @ONS
#ONSeconomyWebsite: http://www.ons.gov.uk/ons/about-ons/get-involved/events/events/economic-forum/index.html
10 July 20141
ONS Economic Forum - Agenda
09.45 Introduction
10.00 NSQR of NA & BoP
10.30 What’s new
10.45 What’s next
11.15 Coffee break
11.45 Recent trends in self-employment
12.30 Close
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Introduction
John Pullinger, National Statistician
ONS Economic Forum
10 July 2014
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National Statistics Quality Review No 2
National Accounts and the Balance of Payments
Kate BarkerLead ReviewerJuly 10 2014
ONS Economic Forum
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Rationale and Terms of Reference
• Commissioned by ONS (not UKSA)• Time elapsed since last review of this type• Terms of reference: - user needs and priorities - basic compilation following Pickford - risks in coverage and collection - existing quality assurance at ONS• Not a review of recent data trends
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People and Process
• Statistical lead – Art Ridgeway, ex Stats Can• ONS: Adrian Chesson, Priya Mistry• ONS discussions/UKSA consultation• User consultations – city, academics,
journalists• Messages positive and negative – but also lack
of knowledge about ONS and methods
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Previous National Accounts Reviews
• Key: Pickford 88/89; Allsopp 03/04; Caplan 03• Pickford – merger of economic statistics, survey
improvements• Allsopp – improvements to regional data, further
survey recommendations• Caplan - integrated supply/use framework,
common deflators• Some recommendations adopted then reversed• Positive developments on service sector coverage
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National Accounts Estimates
• Urgent reinstatement of Purchases Survey or alternative data source
• With SUT at PYP develop double deflation• Adjust more than services industries to bring
output measure into line• Consider ways to reduce workload of
quarterly estimates and annual benchmarking
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Other statistical issues
• Work with BoE on Flow of Funds• Support new unit focused on deflation • Improve deflators for GFCF• Improve the IDBR• Improve access to administrative data• Importance of systems constraints
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Quality Assurance and Communication
• Users complimentary about response to inquiries/press releases
• Economic Forum and preparation for ESA10• Need to be transparent if QA not adequate• Stronger sign-off procedures for outputs• Consider all users not just key ones• The website.......
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Summary
• Work of National Accounts inevitably complex and needs to be continuous focus on methods
• Processes not always well-explained to users• Workload pressures with ESA10 and other
new demands• Overall the National Accounts of a good
standard• Important that improvements not reversed
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What’s new
Peter Patterson, Deputy Chief Economic Adviser
ONS Economic Forum
10 July 2014
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Output, employment and hours
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Contributions to growth in output
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Contributions to expenditure growth (1)
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1981-1985 1991-1996
Contributions to expenditure growth (2): 2009-2014
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Hours and potential hours
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Labour market capacity indicators
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Net capital stocks
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2012 = £1.4 trillion , CVM (2010 reference year)
Capital intensity by industry sector
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Capital stocks per employed person
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Capital stock and productivity
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Growth in capital stock & productivity
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Households’ debt-income ratio
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Households’ net interest payments
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What’s next
Peter Patterson, Deputy Chief Economic AdviserGraeme Walker, Head of National Accounts
ONS Economic Forum
10 July 2014
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What’s next
• Johnson review of price statistics (autumn)
• Re-weighting of LFS estimates using 2011 Census data (October) – historic data in September
• Blue Book 2014
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Improvements to National Accounts in September 2014
Graeme Walker Head of National Accounts
ONS Economic Forum: 10 July 2014
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Outline
• What improvements are being made?• Impact on GDP
• Current price levels• Real GDP growths
• Other impacts• Public Sector Finances• Sector and Financial Accounts• Balance of Payments
• International experience
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Improvements
• New international frameworks (ESA 2010, BPM6, MGDD)
• Improvements to methods• New data (not relevant for period
up to 2009)
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New International Frameworks
• R&D• Weapons• Decommissioning costs• Pensions• BPM6 changes• 10 June articles
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Improvements to methods
• Review of Non-Profit Institution serving Households units (NPISH)
• Financial Intermediaries Services Indirectly Measured (FISIM)
• Illegal Activities • New Cars • Own-account construction• Exhaustiveness adjustments• Gross Fixed Capital Formation• Inventories• 29 May articles
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Impact on GDP levels (97 to 09)
• Average revision +3.6% (£43 bn)• ESA 2010 +2.0% (£24 bn)• Methods improvement +1.6% (£19 bn)
• Biggest impacts (average)• R&D +£17 bn• NPISH review +£9 bn• Illegal activities +£9 bn• Weapons +£3 bn• Pensions +£3 bn
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Revisions to GDP levels
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Revisions to GDP levels
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Real GDP annual growths
• Average growth 97-09 still +2.2%• 97-07 still +3.2%• 08-09 stronger than in BB13 but very similar to BB12
• Some changes to path• 99, 01 and 09 are stronger• 00, 04 and 07 are weaker
• Final analysis of downturn requires quarterly path (to be published early September)
• Length of downturn looks to be the same• Depth of downturn looks to be a bit shallower but similar
to BB12
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Revisions to Real GDP growths
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Annual Real GDP growth rates in various Blue Books
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Public Sector Finances
• PSND increased by around £30bn in recent years• all due to the reclassification of network rail to central
government• PSF only change at this stage due to timing of advice from
Eurostat• PSNB generally increased by £2bn - £4bn in recent
years• mainly due to network rail and change in treatment of Local
Authority pension schemes• Pension scheme impact on GDP already described; network
rail is PSF only• Change to treatment of receipts from 3G/4G mobile
phone licence auctions alter the PSNB profile • increase of £22bn in 2000 offset over subsequent years• PSF only change due to timing of advice from Eurostat
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Public Sector Finances
• Change to treatment of the Royal Mail Pension Plan transfer also alters the profile of PSNB• increase of £36bn in 2012 offset over subsequent years• current/capital transfers with no impact on GDP
• Weapons/R&D capitalisation switches• spending from current budget to net investment without
changing PSNB (GDP impact already described)
• Changes announced in December/February with detailed article published in June• PSF bulletin now includes detailed estimates of ESA10
impact on deficit and debt
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Comparison of PSND measures
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Comparison of PSNB measures
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Sector and Financial Accounts
• 9 July article• NPISH – uplifts both NPISH and household final
consumption expenditure (as HHs consume NPISH goods and services)
• Changes to the reference rates, removal of interbank FISIM and adjustments to FISIM imports will impact all sectors, especially HH
• Illegal activities will increase HH expenditure, intermediate consumption and mixed income
• Car list prices will reduce HH expenditure by less than £1 billion per year
• Exhaustiveness adjustments impact HH expenditure both positively (fuel) and negatively (gambling and digital TV)
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Sector and Financial Accounts (part 2)
• Own account construction increases PNFC and HH fixed capital formation
• R & D impact on gross fixed capital formation will be seen across the sectors
• Weapons systems capitalisation impact will be seen in the government sector
• Pensions – new service charge methods and including funded defined benefit schemes for local government and NPISH increases their expenditure and output
• Detailed impact and changes which only impact on 2010 and later to follow on 12 August
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Balance of Payments (BoP)
• Biggest change - measurement basis of direct investment profits for monetary financial instructions changes from an all inclusive (AI) to a current operating performance basis (COP)
• Other changes include: • Revised treatment of non monetary gold
• Introduction of remote gambling
• Revised treatment of goods sent abroad for processing
• Overall impact of BoP changes: • Before financial crisis – improvement in current
account balance
• During the financial crisis – deterioration in current account balance 45
International experience
• Worldwide implementation of SNA 2008 completed for US, Canada and Australia
• Impacts described by ONS for UK GDP are of the same magnitude and direction as those seen across EU member states and worldwide
• ONS has already provided more detailed information than most countries
• Most impacts expressed in nominal terms
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International Comparisons (Part 2)
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Publication Schedule
• 9 July– Summary of impact on Sector and Financial Accounts (SFA) and Balance of Payments, International Comparisons, Layout of Blue Book, Pink Book and UKEA publications
• 23 July - Impact on GDP components of ESA 2010 and non ESA 2010 changes for 1997 – 2009
• 12 August (prov) – Detailed impact on SFA and Balance of Payments
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Publication Schedule (part 2)
• Mid/End August - 2010 – 2012 real and nominal GDP annual changes
• Early September – Reminder of all impacts plus quarterly path of real GDP 1997 - 2012
• 30 September – Publication of Quarterly National Accounts and Balance of Payments on ESA 2010/BPM6 basis
• 31 October – Publication of Blue Book and Pink Book 2014
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ONS Economic Forum
Email: [email protected]: @ONS
#ONSeconomyWebsite: http://www.ons.gov.uk/ons/about-ons/get-involved/events/events/economic-forum/index.html
10 July 201451
Trends in self-employment
Nick Palmer, Labour Market Statistics
ONS Economic Forum
10 July 2014
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Economic Forum 10 July 2014: self-employment
Contents
1.Summary of the recent growth in self-employment – based on headline statistics as published
2.Address some questions and perceptions - using supplementary data from the Labour Force
Survey
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Economic Forum 10 July 2014: self-employment
Questions related to recent growth in self-employment :
• Post-recession effects or longer-term structural effects ?
• Is it in jobs that drive economic growth ?
• How much of it is part-time/limited hours, (and so low income) ?
• Are people just taking up self-employment in the absence of other opportunities,
• or is this a new generation of young entrepreneurs ?
• To what extent is it more people taking up self-employment and to what extent is it people staying self-employed longer (inflows vs outflows) ?
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Economic Forum 10 July 2014: self-employment
3,200
3,400
3,600
3,800
4,000
4,200
4,400
4,600
24,500
24,700
24,900
25,100
25,300
25,500
25,700
25,900
Feb-
Apr
200
8
Apr
-Jun
200
8
Jun-
Aug
200
8
Aug
-Oct
200
8
Oct
-Dec
200
8
Dec
-Feb
200
9
Feb-
Apr
200
9
Apr
-Jun
200
9
Jun-
Aug
200
9
Aug
-Oct
200
9
Oct
-Dec
200
9
Dec
-Feb
201
0
Feb-
Apr
201
0
Apr
-Jun
201
0
Jun-
Aug
201
0
Aug
-Oct
201
0
Oct
-Dec
201
0
Dec
-Feb
201
1
Feb-
Apr
201
1
Apr
-Jun
201
1
Jun-
Aug
201
1
Aug
-Oct
201
1
Oct
-Dec
201
1
Dec
-Feb
201
2
Feb-
Apr
201
2
Apr
-Jun
201
2
Jun-
Aug
201
2
Aug
-Oct
201
2
Oct
-Dec
201
2
Dec
-Feb
201
3
Feb-
Apr
201
3
Apr
-Jun
201
3
Jun-
Aug
201
3
Aug
-Oct
201
3
Oct
-Dec
201
3
Dec
-Feb
201
4
Feb-
Apr
201
4
Employment: employees compared with self-employed (000s)
Employees Self employed
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Economic Forum 10 July 2014: self-employment
-1,000
-800
-600
-400
-200
0
200
400
600
800
1,000
2008
Q2
2008
Q3
2008
Q4
2009
Q1
2009
Q2
2009
Q3
2009
Q4
2010
Q1
2010
Q2
2010
Q3
2010
Q4
2011
Q1
2011
Q2
2011
Q3
2011
Q4
2012
Q1
2012
Q2
2012
Q3
2012
Q4
2013
Q1
2013
Q2
2013
Q3
2013
Q4
2014
Q1
Employees and self-employed: changes since Q1 2008 (thousands)
Self-employed
Employees etc
Total employment
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Economic Forum 10 July 2014: self-employment
0 200 400 600 800 1,000
Construction
Professional, scientific & technical activities
Other services
Wholesale, retail & repair of motor vehicles
Administrative & support services
Human health & social work activities
Transport & storage
Agriculture, forestry, fishing, mining, …
Education
Manufacturing
Information & communication
Accommodation and food services
Financial & insurance activities
Real estate activities
Public admin & defence; social security
Self-employed by industry (LFS), thousands
Jan-Mar 2014
Jan-Mar 2013
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Economic Forum 10 July 2014: self-employment
-50 -25 0 25 50 75 100
Construction
Professional, scientific & technical activities
Other services
Agriculture, forestry, fishing, mining, energy & water
Education
Wholesale, retail & repair of motor vehicles
Administrative & support services
Financial & insurance activities
Transport & storage
Real estate activities
Human health & social work activities
Public admin & defence; social security
Manufacturing
Accommodation and food services
Information & communication
Self-employed by industry (LFS), thousands
Change Q1 2013 to Q1 2014
Change Q1 2008 to Q1 2013
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Economic Forum 10 July 2014: self-employment
0 200 400 600 800 1,000 1,200
Professionals
Craft and related trades workers
Managers
Service and sales workers
Technicians and associate professionals
Elementary occupations
Plant and machine operators, and assemblers
Skilled agricultural, forestry and fishery workers
Clerical support workers
Self-employed by main occupation group (thousands)
2014Q1
2013Q1
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Economic Forum 10 July 2014: self-employment
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Economic Forum 10 July 2014: self-employment
0%
5%
10%
15%
20%
25%
30%
35%
40%
45%
16-24 25-34 35-49 50-64 65+
Employees and Self-employed: age distributions (%), Jan-Mar 2014
Employees Self-Employed
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Economic Forum 10 July 2014: self-employment
0%
5%
10%
15%
20%
25%
30%
35%
40%
45%
16-24 25-34 35-49 50-64 65+
Self-employed: age distributions (%), Jan-Mar 2008 and Jan-Mar 2014
2008 2014
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Economic Forum 10 July 2014: self-employment
0%
5%
10%
15%
20%
25%
30%
35%
40%
45%
16-24 25-34 35-49 50-64 65+
Employees: age distributions (%), Jan-Mar 2008 and Jan-Mar 2014
2008 2014
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Economic Forum 10 July 2014: self-employment
0
5
10
15
20
25
30
Less than 3 months
3 months but less than 6
6 months but less than 12
1 year but less than 2
2 years but less than 5
5 years but less than 10
10 years but less than 20
20 years or more
Employees and Self-employed by length of time with current employer/self-employed, % distribution, Jan-Mar 2014
Employees Self-employed
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Economic Forum 10 July 2014: self-employment
0
200
400
600
800
1,000
1,200
Less than 3 months
3 months but less than 6
6 months but less than 12
1 year but less than 2
2 years but less than 5
5 years but less than 10
10 years but less than 20
20 years or more
Self-employed by length of time self-employed, thousands
Jan-Mar 2012 Jan-Mar 2013 Jan-Mar 2014
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Economic Forum 10 July 2014: self-employment
0%
10%
20%
30%
40%
50%
60%
Less than 6 Hours 6 up to 15 hours 16 up to 30 hours 31 up to 45 hours Over 45 hours
Usual weekly hours: % distribution, self-employed compared with employees, Jan-Mar 2014
Employees Self-employed
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Economic Forum 10 July 2014: self-employment
0
200
400
600
800
1,000
1,200
1,400
1,600
1,800
Jan-Mar 2007 Jan-Mar 2008 Jan-Mar 2009 Jan-Mar 2010 Jan-Mar 2011 Jan-Mar 2012 Jan-Mar 2013 Jan-Mar 2014
Usual weekly hours: self-employed
31 up to 45 hours
Over 45 hours
16 up to 30 hours
6 up to 15 hours
Less than 6 Hours
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Economic Forum 10 July 2014: self-employment
0
500
1,000
1,500
2,000
2,500
3,000
3,500
4,000
4,500
5,000
2007Q1 2007Q4 2008Q3 2009Q2 2010Q1 2010Q4 2011Q3 2012Q2 2013Q1 2013Q4
Self-employed by whether has employees or not,Q1 2007 to Q1 2014 (thousands)
Total self-employed
Self-employed persons without employees (own-account workers)
Self-employed persons with employees (employers)
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Economic Forum 10 July 2014: self-employment
Summary/Conclusions
Recent strong growth in self-employment:
• reflects a mixture of post-recession effects and longer-term structural changes
•broadly based in terms of industries/occupations and working patterns
•partly reflects ageing workforce generally • and older profile when compared with employees
•mostly among the longer established / little evidence of increase in “stop-gaps”
•dominated by long-term self-employed – implying lower outflows
•“entrepreneurship“/business growth: continues to be just a small factor
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Self-employment income
• Mixed income = National Accounts measure of the income of unincorporated enterprises owned by members of households – part of GDP(I).
• Work by the owner or members of their family cannot be distinguished from the owner's profits as entrepreneur.
• Mixed income for the household sector is calculated as profits + rental income – holding gains.
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Mixed income - compilation
Profits and rental• Rental = income earned through ownership of
buildings • Annual data source is HMRC data based on self-
assessment form – data for 2012/13 will be in BB14• Series extended for later periods using growth in
labour market indicators - LFS self employment, average weekly earnings (AWE)
Holding gains• Gains and losses accrued to owners of assets and
liabilities purely as a result of holding them over time.• Data supplied as part of estimation of gross capital
formation 71
Output of the self-employed
• ONS Interdepartmental Business Register (IDBR) used as sampling frame for the Annual Business Survey
• Register includes all UK businesses registered for either value added tax (VAT) or pay as you earn (PAYE)
• But missing units include self-employed, businesses not registered for VAT/PAYE, businesses without employees, etc.
• To overcome this issue, IDBR under-coverage adjustments are made as part of annual Supply and Use balancing process
• An adjustment factor is applied to estimates of market sector output and intermediate consumption at the UK SIC (2007) class level
• Adjustment factors vary by industry; based on periodic analysis using additional data from HMRC – last formally updated for Blue Book 2006
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Experimental estimates of productivity of self-employed
• No direct information is collected on the output of employees or the self-employed
• Income approach is used to apportion output, utilising development work from the sectional unit labour costs system. Income weights are defined as (COE+GOS)/GDP(Y) for employees, and one minus this (= mixed income/GDP(Y)) for the self-employed
• These income weights are consistent with those implied in the national accounts, and are applied to indices of GVA to derive synthetic GVA indices for employees and the self-employed separately
• System utilises new hours estimates developed to meet ESA requirements, with split between employees and the self-employed
• Estimates are non-seasonally adjusted, and presented as four-quarter moving averages, based on 2010=100
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Economic Forum 10 July 2014: self-employment
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Productivity of Employees and Self-Employed4 Quarter Moving Average
Economic Forum 10 July 2014: self-employment
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Productivity of Employees and Self-Employed4 Quarter Moving Average
Economic Forum 10 July 2014: self-employment
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Productivity of Employees and Self-Employed - Construction4 Quarter Moving Average
Email: [email protected]: @ONS
#ONSeconomy
Website: ons.gov.uk/ons/about-ons/get-involved/events/events/economic-forum/index.html
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