In the provisional results of the 2012 Annual Business Survey, released today, the Office for National Statistics has calculated that the total gross value added of UK businesses is £947.7bn, a year-on-year growth of 1.2 per cent.
The approximate Gross Value Added (aGVA) is calculated by taking the income generated by all non-financial businesses in the UK, less the cost of goods and services used to create this income.
Although the numbers date to 2012, they do give some positive indication that the economy is heading in the right direction.
Between 2011 and 2012, aGVA grew by £11.3bn, or 1.2 per cent. This is a continuation of the recovery seen between 2009 and 2011, taking aGVA to a level 4.2 per cent (£38.1bn) above that seen in 2008, at the start of the recession.
The report does show that costs are rising faster than turnover, however. Turnover grew by 3.1 per cent (£101.9bn), while the purchases of goods, materials and services increased at a higher rate of 3.4 per cent.
The service sector is leading growth, contributing the most to the increase. According to the report, the non-financial service sector now accounts for over half of aGVA in the UK, growing at 6.4 per cent, or £30.5bn, between 2011 and 2012.
In the distribution and production sectors, a fall in aGVA was recorded for the first time since 2009. This is, according to the ONS, due to purchase costs increasing at a higher rate than turnover.
The Annual Business Survey is one of the largest surveys, sampling around 62,000 businesses across the UK. The aGVA calculation is an important factor to calculate GDP: indeed, GVA plus taxes on products, minus subsidies, equals GDP.
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