Policy paper

Industrial Strategy economic indicators methodology note, January to March 2026

Published 9 April 2026

As part of the monitoring and evaluation framework set out in the Industrial Strategy, the government has committed to tracking 6 economic indicators:

• business investment
• gross value added (GVA)
• exports
• number of large ‘home-grown’ businesses
• labour market outcomes such as jobs
• productivity

This note explains the methodology behind these indicators.  

1. Notable revisions since the last quarterly update

A minor correction has been made to the investment announcement table following an error identified post-publication. Uniper’s £6.95 billion investment announcement has been removed, as this relates to their core European markets rather than solely the UK. As a result, investment commitments made into the 8 Industrial Strategy growth-driving sectors (IS-8) over October – December 2025 has been revised to ‘£72.33 billion’.

2. Estimating quarterly economic indicators for the IS-8

This section sets out an approach for the following economic indictors:

• business investment
• GVA
• employment
• productivity

2.1 Mapping the IS-8

The IS-8 cannot be precisely mapped and measured using official statistics. The Office for National Statistics (ONS) economic data is based on the Standard Industrial Classification (SIC) system, which does not always align with or capture the full detail of ‘frontier industries’ (subsectors – for example, AI) within the IS-8. As a result, coverage varies across sectors.

The SIC system is hierarchical, ranging from broad sections to detailed 5-digit subclasses. To improve accuracy, we map IS-8 sectors using 4-digit SIC codes wherever possible, as higher-level SIC categories are too broad. This approach allows us to extract more precise economic metrics for each sector.

Table 1 summarises how well each IS-8 sector is represented by the SIC framework. View SIC definitions for the IS-8.

Table 1: SIC-based definition coverage across the IS-8

Advanced Manufacturing	Clean Energy Industries	Creative Industries	Defence	Digital and Technologies	Life Sciences	Financial Services	Professional and Business Services
Proxy SIC-based definition	Not easily represented by SIC, with no coverage	Well defined by SIC	Not easily represented by SIC, with partial coverage	Proxy SIC-based definition	Not easily represented by SIC, with partial coverage	Well defined by SIC	Well defined by SIC

Clean Energy Industries cannot be proxied at all under the SIC system so is not captured in the business investment, GVA, employment, or productivity metrics. Defence and Life Sciences only have partial coverage. Thus, overall IS-8 estimates for the economic indicators will not fully reflect all 8 sectors. Estimates are at the IS-8 sector rather than the frontier industry level for all frontier industries outlined in the Industrial Strategy.

The IS-8 sectors are not mutually exclusive; businesses can belong to more than one IS-8 sector. Therefore, we use a unique list of SIC codes rather than summing the totals for each sector.

2.2 Data sources and methodology

We use a combination of official datasets and estimation techniques, depending on how well each sector aligns with the SIC system:

1. Direct use of official data

For sectors such as Financial Services and Professional and Business Services, which can be directly mapped at the 2-digit SIC level, figures are taken directly from official data.

2. Apportionment for other sectors

For other sectors, it is necessary to produce estimates for lower-level SIC breakdowns than are published in timelier official data.

We apply apportionment fractions to the latest 2-digit SIC data to estimate data for low-level SIC industries. This approach combines 2 objectives:

• timeliness – using the most up-to-date data available ensuring consistency with quarterly national accounts data
• granularity – ensuring data reflects detailed sector structures

These fractions are derived from the Inter-Departmental Business Register (IDBR) and Annual Business Survey (ABS), both of which provide granular SIC-level data. While the IDBR is timelier, it does not cover GVA or investment; for these measures, the ABS is used as it collects comprehensive sector-level financial information.

All apportioned values use the same price deflator as the 2-digit SIC level.

3. Data sources by metric

Table 2 summarises the main data sources for each economic metric.

Table 2: Data underpinning each economic metric

Metric	Industrial Strategy growth-driving sectors
Business investment	• ONS datasets on investment by industry (data is assembled from several published ONS spreadsheets on investment: Industry-level data taken from ONS Gross Fixed Capital Formation (GFCF) by Industry and Asset, Volume Index Capital Services (VICS), Supply and Use tables, Business investment by industry and asset • apportioned using the Annual Business Survey
GVA	• ONS GDP low-level aggregates • apportioned using the Annual Business Survey
Employment	• payrolled employees from HMRC’s Pay As You Earn (PAYE) Real Time Information (RTI) data. Monthly figures are averaged to produce quarterly data • apportioned using the Inter-Departmental Business Register (IDBR), breakdowns taken by Department for Business and Trade (DBT) from the IDBR dataset
Productivity (output per job)	• ONS GDP low-level aggregates divided by ONS productivity jobs figures • apportioned using the Inter-Departmental Business Register (IDBR), breakdowns taken by DBT from the IDBR dataset

We use 2023 prices for GVA, business investment, and output per worker, consistent with the national accounts.

These metrics will be updated in future quarters to incorporate historic actuals and revised sector mixes when more accurate or recent data is published by ONS. Each new quarterly update supersedes all previous figures, so users should always refer to the latest release.^{[footnote 1]}

Approach for exports

Official ONS and HMRC trade data is not readily available at the IS-8 sector level, so a bespoke IS-8 trade definition has been created. This can be found on the Industrial Strategy quarterly update January to March 2026.

Services exports are classified using the Extended Balance of Payments Classification system (EBOPS), and goods exports using Harmonised System (HS) codes. Individual IS-8 sectors can export both goods and services – for example, Digital and Technology exports both semi-conductors (goods) and cyber-security (service).

Estimates of trade in services and trade in goods are presented as separate values because they are not comparable on any basis so should not be added together. They use different data sources and different classification systems, and measure different concepts of trade.

The IS-8 sectors do not fully align with these classification systems (see table 3 and 4 for coverage). EBOPS uses broad categories making it difficult to isolate specific IS-8 components, while HS codes classify products, rather than industries or technologies, which limits coverage of emerging sectors.

For example, Clean Energy Industries exports are likely underestimated when using an HS-based approach compared to the ONS Low Carbon and Renewable Energy Economy survey (LCREE) as many clean energy products do not have dedicated HS codes and so sit within broader HS codes that also include non-clean energy products. These broader HS codes have been excluded from this analysis. However, ONS LCREE is subject to a significant time lag, so HS codes have been used for more timely monitoring. The HS codes used account for the 6 frontier industries identified in the Clean Energy sector plan rather than clean energy sector as a whole and are subject to change as further analysis is undertaken.

An HS-based approach for Defence differs from the UK Defence Export Statistics publication, which relies on an annual survey of defence orders won by known UK companies operating in the sector. The latest available data is for 2024, so it cannot be used to track Defence exports in the quarterly update.

An EBOPS-based approach for Creative Industries differs from the Department for Culture, Media, and Sports’ Trade in Services Economic Estimates publication, which is classified by the business involved in the trade and not the type of service provided. The latest available data is for 2023, so it cannot be used to track Creative Industries exports in the quarterly update.

The EBOPS and HS IS-8 mapping is subject to change as further analysis is undertaken.

Table 3: EBOPS-based definition coverage across the IS-8

Advanced Manufacturing	Clean Energy Industries	Creative Industries	Defence	Digital and Technologies	Life Sciences	Financial Services	Professional and Business Services
Not applicable	Not applicable	Proxy EBOPS-based definition	Not applicable	Proxy EBOPS-based definition	Not applicable	Well defined by EBOPS	Proxy EBOPS-based definition

Table 4: HS-based definition coverage across the IS-8

Advanced Manufacturing	Clean Energy Industries	Creative Industries	Defence	Digital and Technologies	Life Sciences	Financial Services	Professional and Business Services
Proxy HS-based definition	Not easily represented by HS, with partial coverage	Well defined by HS	Proxy HS-based definition	Proxy HS-based definition	Proxy HS-based definition	Not applicable	Not applicable

ONS Trade in Services is used to measure services exports. The data was extracted from UK Trade in Services: service type by partner country, non-seasonally adjusted. Services export data is collected via a survey and measures the value of transactions of UK businesses by industry. The data is calculated on the ‘change of ownership’ principle of trade, meaning trade is recorded when ownership of the service transfers between UK and non-UK entities.

HMRC Trade in Goods data is used to measure goods exports. The data was extracted from the Overseas Trade Data table. HMRC trade in goods data is based on a ‘cross-border’ or ‘physical movement’ principle where goods entering and leaving an economic territory are recorded as imports and exports respectively.

2.3 Approach for new large ‘home-grown’ businesses

For a business to be included as part of the metric, it must satisfy all the following criteria:

• the company must be founded in the UK. It originated in the UK and is not a subsidiary or branch of a foreign firm.
• it is headquartered in the UK, meaning it is incorporated in the UK and registered with Companies House
• there is no foreign parent company – it is not majority owned or controlled by a foreign entity
• the company has a significant economic footprint in the UK. This means a significant proportion of its workforce, operations, or supply chain is based in the UK
• the company must have a valuation benchmark of over £10 billion

To ascertain a valuation benchmark of £10 billion, market capitalisation and post-money valuations will be used. These measures will capture both listed and private companies in the UK. Data is collected from Companies House and the Stock Market to calculate company valuations.

Based on the definition and current analysis as of 16 March 2026, there are currently 25 businesses in scope. This number represents a baseline of existing businesses, rather than exclusively new large firms. The number is subject to revision as further analysis is undertaken. 

3. Major new investments made in IS-8 sectors

The quarterly update summarises the major investments in the IS-8 and their related job numbers. These are listed in the accompanying announcements spreadsheet. We have recorded investment projects where they create real assets for the UK economy (for example, a factory) rather than financial transactions or transfers (for example, share purchases), where government has been involved in the process or where they stem from policy decisions made as part of the Industrial Strategy.

The figures represent the nominal value over the lifetime of each investment and reflects the position at the point of announcement, rather than when the investment occurs or jobs are created. Therefore, they do not represent completed investment to date. The data is not subsequently updated or tracked in the table, so the actual amount invested may change after the original announcement.

The figures include programme‑level private sector investment announcements that are not attributable to a single company. For these announcements or where announcements are updates from commitments made in previous quarters, we record only the net increase and exclude the previously committed value.

Investment commitments are drawn from sourced public announcements. As it is a snapshot in time, they may therefore be subject to revisions, corrections, removals, or additions.

4. Major new export announcements in IS-8 sectors

The quarterly update summarises major export announcements relating to the IS-8 over the last quarter and their related jobs numbers, as listed in the accompanying announcements spreadsheet. 

These figures reflect the nominal value of trade deals, export deals, contracts, sales, or other agreements that have resulted from support provided by government. This is separate from DBT’s reporting on export wins, which only refers to support provided by DBT only and is compiled via internal reporting rather than sourced public announcements.

As with investment announcements, figures are drawn from public sources, reflect the position at the point of announcement and are not subsequently updated or tracked, so the amount of money that materialises in the economy may change after the original announcement.

Where announcements are updates from commitments made in previous quarters, we record only the net increase and exclude the previously committed value. 

5. Public finance support for UK businesses to scale and export

The overall figure of public finance support for UK businesses to scale and export includes investments and support that have been publicly announced within the last quarter by Public Finance Institutions such as UK Export Finance, the British Business Bank, and the National Wealth Fund.

This figure should be treated as a lower bound, as these institutions do not represent all of government’s financial support delivered via financial transactions to IS-8 companies during this period.

The value (£ million) refers to the financial contribution from the relevant Public Finance Institution. This support takes a range of forms, such as a direct equity investment, commitment by a Public Finance Institution into a third-party fund as a limited partner, a financial guarantee, or a combination of these as blended finance.

Some of the public finance announcements included may overlap with those reported in the investment or exports announcement summary, for example where a Public Finance institution has provided export support.

A selection of this support and investment is included in the update under Examples of public finance support.

1. Users can also see Martin and Taylor (2025) “Labour productivity estimates for detailed industries in the UK, 2009 to 2023”, which discusses creating estimates for low-level industries and uses similar methods to the methods used for the Industrial Strategy economic indicators. ↩