Tuesday, Jun 30, 2020

Crazy measures of productivity

London School Economics: Manufacturing matters for the UK economy

Not strictly about house prices but I put here because incredibly, on the output per hour worked, the most "productive" sector in the UK economy, and its an amazing 3x the next most productive, is real estate activity. The most productive part of the UK economy is selling properties amidst ourselves.

Posted by stillthinking @ 01:17 AM (1154 views)
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8 Comments

1. taffee said...

When tories came in 2010 they talked of rebalancing the economy then went the other way in practice accelerating service sector to 80%

They could start by building or buying companies that provide ppe to nhs

NHS now gets £126billion a year but bed decreased from 299k in 1988 to 148k 2020....work that one out!

Tuesday, June 30, 2020 05:22AM Report Comment
 

2. mombers said...

@1 I call bullsh1t on the real estate productivity. How much does the pie grow if an agent gets £10k+ for selling a London home vs £3k for a Scunthorpe one? Same amount of work, it's just a £7k rentier extraction. Same for a £500k mortgage vs a £100k one for similar homes. The extra income has to come from somewhere, and it's definitely not from creating more value, so it's essentially at everyone else's expense.

Tuesday, June 30, 2020 11:08AM Report Comment
 

3. libertas said...

Home construction is a form of manufacturing. Houses are one of the few assets that can be rented out, handed down to future generations largely tax free. Stop mocking housing. That it is the last man standing in a falling economy shows how valuable it is, this is the only asset anybody will borrow for 25yrs to purchase.

Government's don't build value they need to get out of the way. Reduce taxes and regulations and negotiate good trade deals that are fair on UK producers. Start mining the Welsh and Northumbrian valleys again for coal rather than import the stuff from Australia.

Only when you can understand the value of mining coal in Wales, will you recognise what we need to to do get our ass back into gear:

Public Service Broadcasting - People Will Always Need Coal
https://www.youtube.com/watch?v=5JwoMf2f9FQ

You have been brainwashed into relinquishing wealth. The wealth God placed there for humans to exploit, that could develop us towards reaching to the stars.

Wednesday, July 1, 2020 01:27AM Report Comment
 

4. jack c said...

@ libertas - blimey you've changed your tune over the years!

"Start mining the Welsh and Northumbrian valleys again for coal rather than import the stuff from Australia" - I can get you a start at Banks Group by the end of this month and you'll be working on the coal face. Banks supply the boots but you will need to bring your own Cap Lamp & Charger plus a shovel.

Wednesday, July 1, 2020 02:06PM Report Comment
 

5. mombers said...

@3 home construction is obviously a form of manufacturing. But does the sale of a new build in London contribute to making the pot bigger any more than an identical newbuild sale in Scunthorpe? Clearly not, it's the same bricks / mortar / glass / construction crew. The extra hundreds of thousands of pounds that get trousered by various parties in the more desirable location are not new wealth created by building a home.

Wednesday, July 1, 2020 06:13PM Report Comment
 

6. nickb said...

I imagine the sales of new houses and those of existing dwellings are not separated out in that figure. Sales of existing assets are supposed to be netted out of GDP, including real estate. This would still leave the land price element on new dwellings washing into either construction or real estate figures.

Thursday, July 2, 2020 08:45AM Report Comment
 

7. stillthinking said...

Its not high because of building which is at 170,000 homes per year. Its high because of sales of existing property at 1.2 million per year, the real estate activity is estate agents switching property deeds around. GDP should -only- involve sectors that actually produce new stuff and does not so it seems once again a useless government statistic. Same thing for the fishing industry, always maligned as an irrelevance because as far as the banking sector is concerned more cash changes hands for dog walkers or whatever. Its worrying that the LSE just have this as an axiom that they can then base other (entirely bllx) conclusions off of.

Sunday, July 5, 2020 09:29AM Report Comment
 

8. nickb said...

@7 gdp has trades in existing assets removed. the figure is for "productivity", I don't think it comes from a sectoral breakdown of GDP.

Tuesday, July 7, 2020 02:33PM Report Comment
 

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