Wednesday, 27 July 2011
UK growth and the impact of that extra bank holiday
The leaves on the line or wrong type of snow excuse for yesterday's growth figures was the Royal wedding.
The extra day's bank holiday reduced what should have been a 61-day working period to 60 days; and this, apparently, seriously impacted our productivity.
But GDP isn't strictly a measure of productivity - it's a measure of combined economic activity; such as, activity stimulated by the estimated 2.3m extra visitors coming to London for the wedding. The rail/air/bus fares paid by said tourists. The food purchased and beer drank...
In fact, some forecasters claimed longevity to the tourism boost brought by the wedding, raking in an extra £2bn over time.
How many people buy bunting in the average 13-week quarter? Folding trestle tables and cheap vodka? Moreover, what of the boost to the insurance industry, with councils asking residents to club together for public liability insurance before streets could be closed for a party?!
Now, if there is an economic downside to the workforce taking an extra day off work to get lashed on vodka punch, that surely will be reflected in next quarter's figures, when the impact of customers returning wonky goods manufactured on 2nd May 2011 - the day factories re-opened after a long weekend of partying - is factored in!