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Economic Estimates: Digital Sector Annual Gross Value Added (2019 to 2023) - Revisions Report

Published 6 March 2025

1. Introduction

This release of the economic estimates series, Economic Estimates: Digital Sector Annual Gross Value Added (2019 to 2023), contains major revisions to 2019 to 2022 Gross Value Added (GVA) estimates. These revisions are due to:

• Planned updates to underlying Office for National Statistics (ONS) National Accounts data and to the base year of chained volume measure (CVM) GVA data in Blue Book 2024.
• Updates to our deflator methodology.

This report provides an explanation for, and quantifies the size of, revisions made in this release. In Section 2, we provide background information on changes to underlying data and methodology updates in this release. In Section 3, we explore the impact of these changes on annual GVA estimates.

2. Explanation of Revisions

2.1 Planned updates

ONS regularly performs updates and revisions as part of its production cycle. Revisions are scheduled changes performed by the ONS to incorporate better or more complete source data, to capture routine recalculations, or to include improvements to methods or systems. This release incorporates two planned ONS updates: the National Accounts revisions and the Blue Book 2024 base year update.

This report explains revisions to GVA expressed as both:

• Current price (CP) GVA (i.e. ‘nominal GVA’), which gives the best ‘instantaneous’ measure of the value to the economy, but is not adjusted for inflation.
• Chained volume measures (CVM) GVA (i.e. ‘real terms GVA’), where the effect of inflation is accounted for.

Revisions will be explained through comparison of the following datasets:

• Previous release: Digital Sector Annual GVA 2022 (provisional) published on 15 February 2024 by the Department for Culture, Media and Sport (DCMS) which uses industry deflators when calculating CVM GVA.
• This release: Digital Sector Annual Gross Value Added (2019 to 2023) published on 6 March 2025 by the Department for Science, Innovation and Technology (DSIT) which uses implied deflators when calculating CVM GVA.
• Hybrid approach: Data presented only in this report which uses the same underlying data as ‘this release’ but uses industry deflators from the ‘previous release’ when calculating CVM GVA.

2.1.1 National Accounts revisions

The National Accounts cover a wide array of data on diverse areas such as production, trade, earnings, spending, investment and balance sheets. This includes CP GVA data used in this release. The National Accounts utilise an integrated system that links many economic activities, so a change or revision in one area may have an impact elsewhere.

Where revisions are made to one part of the National Accounts, corresponding revisions may be made throughout the system. More specific information on the ONS revisions process is available in the National Accounts revisions policy.

National Accounts revisions incorporate the GDP revisions process. Major revisions to GDP data are generally complete following publication of the second Blue Book annual GDP figure for a given year. However, revisions may still occur in subsequent publications. Information on revisions incorporated in Blue Book 2024 is available on the ONS website. GDP is a measure of GVA, inclusive of taxes and subsidies on products. ONS GDP revisions therefore affect GVA estimates used in this release. Section 3.1 provides quantification of the effect of National Accounts revisions on underlying CP GVA data.

2.1.2 Blue Book 2024 base year update

The ONS Blue Book is an annual publication which provides comprehensive and detailed National Accounts statistics. Further information on the release can be found on the ONS website.

The Blue Book contains estimates of GDP and GVA produced via chain-linking, as described here. This means that estimates reflect the structure of the current UK economy. In the ONS methodology, the “last base year” is the last year that has gone through the balancing process, part of the revisions process described in Section 2.1.1, where all values after that year are expressed in that year’s prices. The last base year is typically moved forward by one year as part of the process of annual chain-linking. This results in revisions to CVM GVA data.

The effects of the COVID-19 pandemic led to very large movements in industry-level estimates of GVA, with economic structures during this period unlikely to reflect a typical economic structure. Therefore, in the Blue Book 2022 and 2023, the last base year remained at 2019 to avoid the (non-typical) pandemic economic structures impacting estimates for post-pandemic periods. In line with international guidance, the base year was kept under review – as covered by ONS.

In the Blue Book 2024, ONS have moved the last base year on to 2022. As the base year has been moved forward over a longer time period than is typical for this data series, the revisions to volume estimates due to changing base years may be larger than usual.

As DSIT’s methodology for estimating Digital Sector Annual GVA is based on the ONS methodology, we have also moved the base year in this release to 2022. Since the COVID-19 pandemic, previous releases of this series have used a base year of 2019. This change in base year explains why larger than usual revisions to DSIT CVM GVA data in this release are expected. The hybrid approach presented in Section 3.2 provides a quantification of the effect of this base year update.

2.2 Our deflator methodology update

In line with the Code of Practice for Statistics, DSIT are committed to maintaining methods which are in line with national good practice. Updating our deflator methodology fulfils this commitment by bringing Digital Sector Annual GVA estimates more closely aligned with National Accounts data.

Deflators are used to convert CP estimates, including inflation, to constant price estimates, which are adjusted for inflation. Constant price estimates are then used in the calculation of CVMs. As described in our technical report, we have replaced our usage of ONS industry deflators with implied deflators derived from ONS Supply and Use Tables and GDP low-level aggregates. These implied deflators incorporate price adjustments carried out during the revisions process, bringing them more in line with National Accounts data than the output only industry deflators used previously. For comparison between this release and the National Accounts see Section 3.3. ONS have been consulted on this methodology update.

Deflators are used to remove the effects of inflation during calculation of CVM. As these deflators have changed in this release, this methodology update explains why changes to GVA CVM data are expected in this release. For quantification of these changes see Section 3.2.

3. Quantification of Revisions

This section quantifies the effect of the planned updates (see Section 2.1 about the National Accounts revision process and the Blue Book 2024 base year update), and our deflator methodology update (see Section 2.2) on this release. This section also compares this release with National Accounts data. Comparisons are only made for the years 2019 to 2022 as these are the only years where data is available across all datasets to be compared.

As described in Section 2.1, Digital Sector Annual GVA 2022 (provisional) data published on 15 February 2024 is described here as the ‘previous release’. Previous release estimates do not incorporate any of the updates described in Section 2 and can be used as a reference to compare against.

CP GVA presented in ‘this release’, Digital Sector Annual Gross Value Added (2019 to 2023), incorporates the planned updates (National Accounts revisions) described in Section 2.1.1. CP data from this release is compared against CP data from the previous release in Section 3.1.

CVM GVA presented in this release incorporates both planned updates (National Accounts revision process and the Blue Book 2024 base year update) described in Section 2.1 and our deflator methodology update described in Section 2.2. CVM data from this release is compared against CVM data from the previous release in Section 3.2.

As described in Section 2.1, in this report we also present a hybrid approach which uses the same underlying data as ‘this release’ but uses industry deflators when calculating CVM GVA. This hybrid approach incorporates both planned updates (National Accounts revision process and the Blue Book 2024 base year update) described in Section 2.1, but does not include our deflator methodology update. The hybrid approach is compared against this release and the previous release in Section 3.2.

3.1 Current price GVA data

Given that base years and deflators do not apply to CP GVA data, this section quantifies only the effect of National Accounts revisions on the Digital Sector Annual GVA estimates.

By comparing this release with the previous release, Figure 1 shows the difference between CP GVA data with and without National Accounts revisions. This comparison shows that the National Accounts revisions have had a larger impact on more recent Annual GVA estimates than older estimates.

Figure 1: Percentage difference (%) in Digital Sector and associated subsectors current price GVA between estimates in this release and the previous release.

Year	2019	2020	2021	2022
Digital Sector	0.0	-0.1	0.6	-3.2
UK	0.0	0.0	0.1	3.3
Manufacturing of electronics and computers	0.0	0.2	6.2	-7.9
Wholesale of computers and electronics	0.0	0.0	-3.4	-20.6
Publishing (excluding translation and interpretation activities)	0.0	0.4	1.3	-12.5
Software publishing	0.0	0.4	0.4	61.1
Film, TV, video, radio and music	0.0	-1.0	-0.1	4.4
Telecommunications	0.0	0.1	2.0	1.2
Computer programming, consultancy and related activities	0.0	0.0	-0.5	-6.3
Information service activities	0.0	0.4	3.4	3.6
Repair of computers and communication equipment	0.0	0.2	-0.9	-6.2

It is important to note that 2022 GVA data was provisional in the previous release, as it used preliminary output CP GVA data which was yet to go through the National Accounts revisions process described in Section 2.1.1. Larger revisions to 2022 values are therefore expected as there are often larger revisions in early rounds of the National Accounts revisions process than in subsequent revisions.

3.2 Chained volume measure GVA data

CVM calculations use CP GVA data as an input. Absolute values for CVMs are prone to regular updates because revisions to more recent data propagate backwards across statistics calculated for previous years. This includes updates due to National Accounts revisions.

In this section, we will quantify the impact of the planned updates (National Accounts revision process and the Blue Book 2024 base year update) and our deflator methodology update. We do this by comparing three estimates:

• Previous release CVM data which do not incorporate any of the updates described in Section 2.
• This release CVM data which incorporates both planned updates described in Section 2.1 and our deflator methodology update described in Section 2.2.
• Hybrid approach CVM data which incorporates both planned updates described in Section 2.1 but does not include our deflator methodology update.

Changes to growth are more meaningful for CVMs as they are designed to quantify changes in the volume over time. We have therefore compared 2019 to 2022 growth in Figure 3, as these are the only years where data is available across all datasets to be compared. Figure 2 details the subsector names used in Figure 3.

Figure  2: Digital subsector names and associated subsectors numbers as shown in Figure 3.

Subsector #	Subsector Name
1	Manufacturing of electronics and computers
2	Wholesale of computers and electronics
3	Publishing (excluding translation and interpretation activities)
4	Software publishing
5	Film, TV, video, radio and music
6	Telecommunications
7	Computer programming, consultancy and related activities
8	Information service activities
9	Repair of computers and communication equipment

Figure 3: Growth in CVM GVA for the Digital Sector and subsectors from 2019 to 2022 with this release compared against the previous release and the hybrid approach.

Comparing previous release data with hybrid approach data shown in Figure 3 reveals that the planned updates have a different impact on 2019 to 2022 growth depending on subsector. Similarly, comparing data from this release and the hybrid approach in Figure 3 reveals a different impact of our deflator methodology update on 2019 to 2022 growth depending on subsector. These results show a substantial combined effect of both planned updates and our deflator methodology update on 2019 to 2022 growth in GVA. Estimates in this release should therefore not be compared with pre-2019 figures, which will be updated in the next release.

3.3 ONS National Accounts

Our deflator methodology update used in this release and described in Section 2.2 brings the methodology used for this series closer to that used in the production of the National Accounts. As such, Digital Sector Annual GVA estimates in this release are now closer to the National Accounts than those presented in the previous release.

National Accounts data is held at the 2-digit SIC code level. Direct comparison between National Accounts Annual GVA data and Digital Sector Annual GVA data can therefore only be made where a Digital subsector is composed entirely of one 2-digit SIC code, or where Digital subsectors can be summed to produce a 2-digit SIC code. Where this is the case, we have compared the 2019 to 2022 growth of CVM annual GVA in Figure 4.

As shown in Figure 4, Annual GVA 2019 to 2022 growth in this release now matches National Accounts data shown in Blue Book 2024, where the previous release and hybrid approach do not.

Figure 4: Comparison of Digital subsector Annual GVA growth from 2019 to 2022 (%) between the previous release, hybrid approach, this release and National Accounts data.

Digital subsector	4-digit SIC codes in definition	Whole 2-digit SIC in National Accounts?	Previous release (No updates)	Hybrid approach (Planned updates but no deflator methodology update)	This release (Planned updates and our deflator methodology update)	National Accounts (as presented in Blue Book 2024)
Manufacturing of electronics and computers	SIC 26.11, 26.12, 26.20, 26.30, 26.40, 26.80	No	1.8	-5.8	2.6	N/A
Wholesale of computers and electronics	SIC 46.51, 46.52	No	1.3	-21.9	-21.6	N/A
Publishing (excluding translation and interpretation activities) and Software publishing	SIC 58.11, 58.12, 58.13, 58.14, 58.19 and SIC 58.21, 58.29	Yes (SIC 58)	8.3 [Note 1]	-2.0 [Note 1]	-0.5 [Note 1]	-0.5
Film, TV, video, radio and music	SIC 59.11, 59.12, 59.13, 59.14, 59.20, 60.10, 60.20	Yes (SIC 59, 60)	-0.9	-1.0	2.9	2.8 [Note 1]
Telecommunications	SIC 61.10, 61.20, 61.30, 61.90	Yes (SIC 61)	-2.4	25.7	49.1	49.1
Computer programming, consultancy and related activities	SIC 62.01, 62.02, 62.03, 62.09	Yes (SIC 62)	22.3	9.3	9.2	9.2
Information service activities	SIC 63.11, 63.12, 63.91, 63.99	Yes (SIC 63)	12.8	15.4	21.6	21.6
Repair of computers and communication equipment	SIC 95.11, 95.12	No	10.0	3.6	-2.0	N/A

Note 1: This value has been calculated by summing chained volume measures (CVM) GVA, before calculating growth rates. Due to the non-additivity in CVM, aggregates are not expected to properly sum to their totals.

4. Summary

As detailed in this report, planned updates and our deflator methodology update have resulted in substantial changes to the Digital Sector Annual GVA estimates in this release. These updates bring our estimates more in line with the current structure of the economy and more closely align our estimates with those published in the National Accounts.