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Wondered What
GDP Means?
An introduction to diagrams of the UK economy
using Arup’s 7see model
13 Fitzroy Street
London W1T 4BQ
arup.com
driversofchange.com Simon Roberts
Author: Simon Roberts
Design: Elisa Magnini Contents
Picture editors: Felicitas zu Dohna, Daniel Imade
For the photos listed on page 35, either their authors have given permission
only to include their work here and not to share it under a Creative Commons
license, or the individual license differs from the one used in the overall
publication. If you are interested in using their photos, please contact these
authors directly.
p. 14
other All the energy Sankey lines are in energy units. The
other service
service key at the bottom details a different unit name for
industry industry
electricity but it is equivalent in size so that the
energy loss as heat at “electricity from combustion”
is evident.
products products
inputs inputs
KEY energy (500 PJ/y) energy (200 TWh/y) KEY people (10 million)
extraction
crude The Sankey lines introduced earlier of jobs, energy and
oil refining petroleum products economic volume flows all relate to the same set of fixed
transport
utilities capital. Therefore they are combined here into one diagram.
Products and jobs start as inputs on the left and progress
crude oil other
(net) investment via production at fixed capital to finished forms on the right.
intermediate consumption For the three larger industries, inputs for production into
goods
their left-hand boxes are imports, energy and jobs, and into
tax their right-hand boxes are their intermediate consumption of
other other industries’ products, which include raw materials.
electricity
coal (net) from
combustion distribution
Introduced here are extensions of the Sankey lines at “final
coal
& retail supply” further to the right as lines of “final demand”. One
nuclear & manu- manu-
facturing facturing final destination for products is by households. Their own
renewables
tax purchase is called “household consumption”. Households
gas also benefit from “NPISH” (non-profit institutions serving
final final households) and “government” services, so these are
construc- construc- supply demand household also components of final demand. Another destination
tion tion consumption for products is as exports, which are shown on the right
other
gas (net) crossing the system boundary of the economy.
service service goods
KEY energy (500 PJ/y) economic volume flows at economic volume flows at purchasers’ prices (£100b[1990]/y)
basic prices (£100b[1990]/y)
16 17
IMPORTS EXPORTS
UK trading border
petroleum
products
agriculture Jobs, energy and
(net)
agriculture
economic volume
crude
extraction flows
oil refining petroleum products
transport
utilities
crude oil other Which industry is the largest
(net) investment
employer?
dwellings
What proportion of the final
supply of services is tax on
agriculture
products?
goods
services
If consumers (households)
buy fewer goods, how is
employment affected?
products
inputs finished products
KEY energy (500 PJ/y) economic volume flows at economic volume flows at purchasers’ prices (£100b[1990]/y)
basic prices (£100b[1990]/y)
18 19
Transport
transport
energy mobility
22 23
PASSENGER
rail tonne-km/y
military air
domestic
tonne-km/y
marine
international
marine
transport
energy mobility
24 25
Population and jobs
labour force construction This 7see Sankey diagram relates “dwellings” on the left
population (economically active) employed jobs
through “population” in the middle to “jobs” and other
construc- activities on the right. Excerpts of the first Sankey diagram
service industry tion
in this booklet, of jobs, energy and economic volume flows,
dwellings households show several points of linkage of quantities between the two
service diagrams. In contrast to the other three Sankey diagrams
industryy
in this booklet, all the quantities here are stocks or status
measures; none are flows with a direction or have per-year
types of units.
unemployed
If starting at “population” in the Sankey diagram,
p. 16 progressing to the right first meets division by age. The
next division is by whether “economically active” or not
household
consumption for the “labour force”. There is then a change of unit from
economically inactive “employment” in light green for “labour force (economically
men over 65
women over 60 active)”, as sourced from household survey data, to “jobs”
in dark green, as reported by industries, the employers. The
under 65 retired industry groupings at the top right correspond to those in
sick the first Sankey diagram.
looking after
p. 17 Progressing from “population” to the left, population can
family or home
be grouped into “households”. This applies to “household
student
consumption” on the far right of the first Sankey diagram.
residence consuming unit population employment or status The rural proportion is included in some parts of the
diagram because rural areas in the UK are sometimes
disadvantaged for affordable housing, access to services
and economic opportunities.
28 29
other industries
manu- Population and jobs
manufacturing facturing
p. 17
30 31
UK-owned shares in
a foreign company
(UK assets)
foreign-owned shares in
a UK-located company Balance of payments
(UK liabilities)
balance of
payments
& goods example); monetary transactions in red crossing the solid
gas (net)
line to reach them also leave the economy. Transactions at
services
the bottom of these boxes correspond to their purchase or
services
sale (change of liability), while transactions on their sides
are income (dividends or interest) to their owners.
34 35
Balance of payments
36 37
(assets
included
within utilities
industries)
investment
intermediate consumption
p. 17
UK trading
tax
x
Insights
agriculture
PASSENGER
transport extraction There are many benefits to using the Sankey format
car & taxi vehicle-km/y for country-wide data. Widths of lines show what is
(assets
included important. Lines linking boxes enable dependencies
within utilities to be traced back upstream to inputs. System
industries) coach
bus & coa ch
h passenger-km/y
passen
passenger
ger-km
-km//y richness is emphasised by the array of colours
p. 23
representing different entities.
intermediate
intermed
dia
a GDP appears in Extracts from the set of 7see Sankey diagrams
two forms: output introduced in this booklet are shown opposite.
labour force and expenditure
(economically active) em • Investment is the part of “final demand” essential
for maintenance and growth of all fixed capital.
dist
manu- • GDP appears in two forms: output and expenditure.
final final
facturing supply demandd
• Energy is represented in two ways. As a small
economic volume flow it is production from the
goods extraction and utilities industries. The other way is
GDP & imports
construc-
construction
t ti in actual energy units.
tion
This booklet takes neither position but simply sets out to explain
what GDP means. Behind the single metric is a firmly established
methodology of data collection. Whether you are interested in
economics or not, the definitions in this methodology provide a
useful language to access a rich data resource and discuss its
implications. This booklet complements the GDP components with
energy, jobs, travel and balance of payments.
ISBN 978-0-9562121-8-4
13 Fitzroy Street
London W1T 4BQ
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