Do government stats really show 12 months of recession?

On Tuesday the Office for National Statistics issued figures showing their preliminary estimate for growth in the third quarter of 2011 was 0.5 per cent – higher than expected.  But the ONS also said that growth over the last 12 months – October 2010 to September 2001 – was also a paltry 0.5 per cent.

But these figures are the total Gross Domestic Product (GDP) of the UK economy.  We’re living during a period when the British population is rising dramatically.  For example the ONS have projected that between the middle of 2010 and 2011 it will have gone up by 473,000, or 0.76 per cent.  That’s in line with ONS projections, published a couple of weeks ago, that the UK population will rise by about 0.8 per cent a year between now and 2035, and do so fairly steadily.

So there’s a strong likelihood that the UK population over the twelve months from September 2010 to October 2011 grew a lot faster than the UK economy – about one and a half times faster.  In other words, measured in output per head – GDP per head – that the economy shrank over the last 12 months.

A recession?  Perhaps not technically.  But many would argue that GDP per head is a much more meaningful measure of economic activity.

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