Description:
This indicator measures growth in the approximate gross value added (GVA) of the arts, culture and creative sector in real terms.
Substantial changes were made to this indicator in May 2023 to improve the measurement approach. These included changing the measurement of GVA growth from nominal to real terms, broadening the definition of the sector and revising the criteria for change used to gauge the performance of the indicator over time. More information on these changes can be found here.
Source of Data:
The source of the approximate GVA data is the Annual Business Survey, which is run by the Office for National Statistics.
Results from the Annual Business Survey are published on the Scottish Government website within the Scottish Annual Business statistics: Business and innovation statistics - gov.scot (www.gov.scot)
Definitions:
Approximate gross value added (GVA) is a measure of the income generated by businesses within their industries and sectors, less the cost of goods and services used to create the income. The main component of income is turnover, while purchases is the main component of the consumed goods and services (referred to as intermediate consumption). Stock levels, which may rise or fall, can also have an impact on GVA, as can the values of subsidies received or duty paid. Businesses' labour costs (for example, wages and salaries) are paid from the value of GVA, leaving an operating surplus which is a good approximation for profit. The cost of capital investment, financial charges and dividends to shareholders are met from the operating surplus.
The ABS publishes GVA at 'basic prices'. GVA at basic prices is the output at basic prices minus intermediate consumption at purchaser prices. The basic price is the amount receivable by the producer from the purchaser for a unit of a product, minus any tax payable plus any subsidy receivable on that product. This ABS measure of GVA is called 'approximate' because it does not fully allow for certain National Accounts concepts such as taxes, subsidies or income earned in kind.
The GVA estimates at ‘basic prices’ from the ABS are converted into real terms to take account of inflation. These are adjusted using a chain-linked volume measure based on industry prices indices from the national accounts GDP system, applied at level of industry division consistent with the Supply and Use Tables. The chainlinked volume measure produces an estimate which removes the component of the change in GVA between one year and the next which is solely due to inflation, giving a measure in real terms as if prices had not changed. Given this, each update to this indicator involves revisions to all previous years real GVA, as well as the inclusion of the latest year figures. Note, some GVA figures are omitted from the data due to disclosure issues.
The Arts, Culture and Creative sector is compiled by aggregating Scotland level data according to the Standard Industrial Classification (SIC) code of each individual business site (e.g. factory, shop etc). A SIC code is allocated to a business site according to its main activity. The sector definition is built up from a range of SIC 2007 codes including those that form the Creative Industries Growth Sector plus additional activities included after engagement with stakeholders from the sector. More information on the SIC codes used to classify the sector can be found in Annex B of the technical note addendum.
Criteria for Change:
- Any difference within +/- £100m in real GVA of the previous year’s figure suggests that the position is more likely to be maintaining than showing any change.
- An increase of more than 100m in real GVA suggests position is improving.
- A decrease of more than £100m in real GVA suggests position is worsening.