Policy paper

Industrial Strategy economic indicators methodology note, October to December 2025

Published 14 January 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.

Notable revisions since the last quarterly update

The Office for National Statistics (ONS) made methodological improvements to many economic statistics in Blue Book 2025, leading to upwards revisions to business investment, GVA, and productivity metrics.

View full details of these improvements to the Blue Book.

Estimating quarterly economic indicators for the IS-8

This section outlines the approach for business investment, GVA, employment, and productivity.

Mapping the Industrial Strategy growth-driving sectors (IS-8)

The IS-8 cannot be precisely mapped and measured using official statistics. The 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, artificial intelligence) 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.

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 (released 22 December 2025), Volume Index Capital Services (VICS) (released 7 November 2025) Supply and Use tables (released 31 October 2025), Business investment by industry and asset (released 22 December 2025) • apportioned using the Annual Business Survey
GVA	• ONS GDP low-level aggregates (released 22 December 2025) • apportioned using the Annual Business Survey
Employment	• payrolled employees from HMRC’s Pay As You Earn (PAYE) Real Time Information (RTI) data (released 16 December 2025). 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 (released 22 December 2025) divided by ONS productivity jobs figures (released 13 November 2025) • 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 HM Revenue and Customs (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 in the accompanying exports definition list

Services exports are classified using the Extended Balance of Payments Classification (EBOPS) system, 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 use 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 (tables 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 HS code inputs do not cover the entire sector. However, the latest ONS LCREE exports data is for 2023 so cannot be used to track Clean Energy exports in the quarterly update.

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 2023, 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

Services and goods definitions for the IS-8 can be found in the accompanying exports definition list.

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 Q2 2025 released by the ONS in October 2025 for the period of Q1 2024 to Q2 2025.

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 from January 2024 to September 2025 for all exports; this was the November 2025 release. 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.

Approach for new large ‘home-grown’ businesses

For a business to be included as part of the metric, it must satisfy all of 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, as of 16 December 2025, there are currently 27 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. 

Major new investments made in IS-8 sectors

The quarterly update summarises the major investments in the IS-8 between October and December 2025 and their related job numbers. These are listed in the accompanying investment totals spreadsheet. We have recorded investment projects 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 reflect 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.

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

Major new export announcements in IS-8 sectors

The quarterly update summarises major export announcements relating to the IS-8 between October and December 2025 and their related jobs numbers, as listed in the accompanying export totals spreadsheet.

These figures reflect the nominal value of trade deals, export deals, contracts, sales, or other agreements that have resulted from support provided by UK 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 public announcements.

As with investment announcements, figures reflect the position at the point of announcement and are not subsequently updated or tracked. 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. 

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. ↩