National Accounts- Quarterlies September 2024 Data Collection

Gross domestic product: September 2024 quarter – changes and data updates Introduction Gross domestic product (GDP) sources and methods are thoroughly documented (see: Quarterly gross domestic product: Sources and methods (second edition), with a further update in Quarterly gross domestic product: Sources and methods (fifth edition). See National accounts (income, saving, assets, and liabilities): Sources and methods (fourth edition) for the data sources and methods used in estimating GDPI). Overview of sources and methods for quarterly gross domestic product: Updates and COVID-19 adjustments provides a summary of the sources and methods and also includes information about where we have used alternative indicators to better capture the impacts of COVID-19 on economic activity. The quarterly indicators used when compiling our estimate of GDP are the best that we have available at that time. We usually face trade-offs between timeliness and the quality of available data sources. As higher quality data becomes available this is incorporated into our estimate of GDP as data updates. As a result, the methods we use vary depending on the data available and are underpinned by certain assumptions. In normal periods of activity, these assumptions provide reasonable estimates of activity. In periods of abrupt disruption, such as the COVID-19 alert level 4 lockdowns, some of these relationships weakened or no longer applied. During the COVID pandemic we used alternative indicators in some parts of our GDP compilation to ensure the effects of the pandemic and related restrictions on activity are appropriately measured. We have largely reverted to our usual quarterly indicators, but a small number of component series still use alternative indicators where returning to our usual method will lead to poorer quality estimates. Overview of sources and methods for quarterly gross domestic product: Updates and COVID-19 adjustments is an updated guide to the concepts and methods we are using to compile gross domestic product (GDP). It also includes information on where alternative indicators remain in use. Seasonal adjustment additive outlier treatment Sharp changes in activity pose challenges for our usual seasonal adjustment processes. Over the last few years, we applied additive outlier treatment to our headline GDP estimates and to industries and components heavily affected by border closures or domestic COVID-19 restrictions. This subdues the impact of unusual data points on the seasonal adjustment process. We carried out a review of all the seasonally adjusted series we publish to ensure our settings are optimal for the current economic environment. As a result of this review, changes were made to many series and incorporated in the September 2024 quarter release and are being presented for the first time. Now that the COVID-19 impacts are greatly diminished in our recent time series we have updated our approach to the seasonal adjustment of COVID-affected periods and introduced the new Stats NZ standard for the application of additive outliers. This methodology aligns with other Stats NZ releases, such as the Retail Trade Survey and Business Financial Data, which have also incorporated this standard. We have introduced a synthetic bridging approach for series that were heavily impacted by COVID-19 lockdown periods. As part of the review, we also updated the choice between a direct or indirect approach to seasonal adjustment for some of our aggregate series to improve the quality of these seasonal adjusted series. These changes were communicated to customers in advance, see Improvements to gross domestic product September 2024 quarter | Stats NZ for more information. These updates have caused revisions to many published seasonally adjusted time-series including the headline GDP production measure. They update our measurement of how seasonally adjusted economic activity is distributed within a year, meaning that growth rates have increased in some quarters and decreased in other quarters relative to what we have previously published. Incorporating new annual data The main driver of updates to GDP data for 2022 onwards is the incorporation, for the first time, of balanced annual data for the year ended March 2023. Each year, we make regular updates to the most recent data in the annual national accounts. These updates generally reflect more accurate data becoming available from the underlying data sources, such as the low-level financial data that becomes available with the Annual Enterprise Survey update. The annual national accounts are released in November each year and present a comprehensive view of the economy that draws together data from more detailed but less timely sources. The availability of more detailed data allows us to understand the level of activity that has occurred over the period and reflect these in our volume estimates of quarterly and annual economic growth. National accounts (industry production and investment): Year ended March 2023 | Stats NZ provides the annual benchmarks for GDP(P) up to the year ended March 2023. National accounts (income and expenditure): Year ended March 2024 | Stats NZ provides the benchmarks for GDP(E) up to the year ended March 2023 and for gross fixed capital formation up to the year ended March 2024. Prior to annual balanced data being available, average annual growth rates are calculated from our quarterly indicators. As our quarterly indicators are mainly single indicator and output based, the incorporation of annual value-added data for selected industries can lead to updates in average annual growth rates. This is because in many cases we are now accounting for changes in intermediate consumption in those industries for the first time, as well as incorporating more detailed and better-quality data measuring output. We reconcile the quarterly measures of growth to the annual values in a process called benchmarking. This process largely preserves the pattern of quarter-on-quarter movements drawn from the quarterly indicator series but scales the series to match the level of the annual benchmark. Improvements to gross domestic product September 2024 quarter | Stats NZ has more details on incorporating the latest balanced annual national accounts data. 2024 preview of national accounts improvements | Stats NZ has more information on the range of updates to annual national accounts statistics. Not all industries are reconciled to the annual national accounts data – some make use of other annual data sources. See Quarterly gross domestic product: Sources and methods (fifth edition) and Overview of sources and methods for quarterly gross domestic product: Updates and COVID-19 adjustments for an overview of the quarterly and annual methodologies used for GDP(P) and GDP(E). New updated data weights The availability of updated annual data allows us to update the weights used to aggregate lower-level components to higher-level estimates of activity (chain linking). This ensures our estimates of economic activity reflect structural changes in the economy over time. As a result, previously published growth rates compiled from lower-level series may change when updated weights are applied. For components of GDP(P) our latest annual data and weights are for the year ended March 2023. These weights apply from the June 2023 quarter onwards. For components of GDP(E) our latest annual data and weights are for the year ended March 2024. These weights apply from the June 2024 quarter onwards. Changes to weights reflect changes in relative prices, as measured by implicit price deflators (IPDs). For a small number of sub-industries, COVID-19 impacts have made reliable measurement of IPDs impossible. In these cases, we retained pre-COVID weights for chain-linking. Corrections to quarterly gross domestic product Corrections to household consumption expenditure Adjustments were applied to the education price index to update a historic minor CPI processing correction. This caused revisions to household consumption expenditure from the September 2021 quarter and onwards. An adjustment was also applied to reflect the decrease in consumer spending on prescriptions due to prescription charges being covered by the government from the September 2023 quarter to the June 2024 quarter. Changes due to updated indicator data Incorporating updated international trade data International trade data has been updated for the June 2024 quarter, with revisions to exports and imports. Overseas merchandise trade: September 2024 has more information. Incorporating updated value of building work put in place data Value of building work put in place (also known as Quarterly Building Activity Survey (QBAS)) has updated data from the December 2023 quarter onwards. This has caused changes to both construction and gross fixed capital formation over the same time period. Value of building work put in place: September 2024 quarter has more information. Incorporating updated linked employer-employee data (LEED) Linked employer-employee data (LEED) has been updated from the September 2023 quarter onwards. This has caused changes to electricity, gas, water, and waste services over the same period. Linked employer-employee data: September 2023 quarter has more information. Incorporating updated local authority statistics data (QLAS) Local authority statistics data has been updated in the September 2024 quarter, causing updates to local government final consumption expenditure. Local authority statistics: September 2024 quarter has more information. Quarterly Employment Survey (QES) changes Low-level QES data is used as quarterly indicators of several production-side sub-industries and expenditure components. The quarterly movements for some QES series have shown increased volatility due to sample rotation, and further analysis has led to the use of movements that exclude the impact of sample change. The industries that required adjustment in the September 2024 quarter are: household consumption expenditure (HCE) Labour market statistics: September 2024 quarter has more information. Other changes due to updated respondent information and other source data We received updated respondent information and other source data, causing updates to: agriculture, forestry, and fishing – updated livestock slaughter data and roundwood removal data manufacturing – updated business financial data (BFD) electricity, gas, water, and waste services – new and updated linked employer-employee data (LEED), and updated electricity generation data wholesale – updated business financial data finance and insurance – updated financial intermediation services indirectly measured (FISIM) data and RBNZ data rental, hiring, and real estate services – updated QV, and rent CPI business services – redundancy adjustments public administration and safety – redundancy adjustments healthcare and social assistance – redundancy adjustments household consumption expenditure – updated electricity consumption data central government final consumption expenditure – flow-through from update to healthcare redundancy adjustment local government final consumption expenditure – updated QLAS data gross fixed capital formation – updated QBAS data imports and exports – updated international trade data unallocated taxes – flow-through from updates to insurance services, gross fixed capital formation, household consumption expenditure and central government final consumption expenditure inventories – new and updated BFD data and agriculture stocks data. Updates to inventories Updates were also made during the process of reconciling change in inventories with other movements in production and expenditure series. This process minimises inconsistencies in timing and valuation and typically only affects recent quarters. In the September 2024 quarter we have also made some changes to historical inventories adjustments applied to quarters in the 1993 year and earlier. This follows improvements we made in the December 2023 quarter GDP release to the seasonal adjustment process and its interaction with coherence adjustments to inventories levels. At that time, we suppressed updates to seasonally adjusted GDP expenditure aggregates prior to September 2006 and communicated that in our Datainfo+ content for that release: Gross domestic product: December 2023 quarter - changes and data updates - Datainfo+ We have now reviewed the inventory adjustments and coherence of the production and expenditure measures of GDP for that period and are able to remove the suppression that has been in place. These updates improve transparency, enabling technical customers to closely replicate official seasonally adjusted GDP expenditure aggregates when they seasonally adjust the actual series themselves. Updates in applying alternative indicators There have been minor updates to components that used alternative indicators through COVID- and Cyclone Gabrielle-affected periods. In many cases the alternative indicator is based on data from the business financial data (BFD) collection or a composite indicator from Household Labour Force Survey (HLFS) and business employment data (BED). This has resulted in minor updates for many components and affects quarters from March 2020 onwards. These are not due to the source data revising, but instead due to updates in the processing of the source data to form our alternative indicators. This has contributed to updates in: agriculture, forestry, and fishing mining construction retail trade and accommodation transport, postal, and warehousing information media and telecommunications professional, scientific, technical, administrative, and support services public administration, safety, and defence education and training health care and social assistance arts, recreation, and other services household consumption expenditure gross fixed capital formation. Updates in GDP income measure Updates to business financial data (BFD), Quarterly Building Activity Survey (QBAS), final consumption expenditure, gross fixed capital formation, inventories, and imports and exports of goods and services will flow through to GDPI series. Data updates table The table below shows previously published and updated quarterly movements for GDP and expenditure on GDP (GDE) from the March 2019 to the June 2024 quarters. While there were some changes to earlier quarters, these were less significant. All movements shown are in constant prices. Previously published and updated quarterly movements Gross domestic product Gross domestic expenditure Percentage change from previous quarter Quarter Previously published Updated 19 December 2024 Previously published Updated 19 December 2024 March 2019 0.7 0.9 0.9 1.2 June 2019 0.4 0.0 0.4 0.0 September 2019 0.8 0.8 0.7 0.8 December 2019 0.8 1.0 0.6 0.7 March 2020 -1.3 -1.1 -1.2 -0.8 June 2020 -10.0 -10.4 -9.6 -10.0 September 2020 14.0 14.1 13.8 14.0 December 2020 0.1 0.4 0.4 0.5 March 2021 1.8 2.1 1.8 2.1 June 2021 1.4 0.9 1.6 0.9 September 2021 -4.0 -4.2 -4.2 -4.2 December 2021 3.5 4.1 3.6 3.9 March 2022 -0.2 0.0 -0.4 0.2 June 2022 1.3 1.1 1.3 1.2 September 2022 1.7 2.0 2.0 2.3 December 2022 -0.6 0.0 -0.6 0.1 March 2023 -0.5 -0.1 -0.6 -0.3 June 2023 0.8 0.7 1.2 0.8 September 2023 -0.4 0.0 -0.6 -0.1 December 2023 0.0 0.3 0.3 0.1 March 2024 0.1 0.3 0.3 0.5 June 2024 -0.2 -1.1 0.0 -0.8 The change to the June 2024 quarter growth rates is largely the result of: incorporating updated information on the structure of the economy which changes the weights used for aggregating component-level movements up to the whole-of-economy level an increase to weights for dairy manufacturing has resulted in upward revisions to December growth rate in 2023, and downward revisions to June quarter growth rates in 2023 and 2024 contributing to the downward revision to growth rates in the June 2024 quarter are updated weights in the retail trade and accommodation, transport and household consumption expenditure including updated source data for construction (QBAS), rental, hiring, and real estate services (QV), and local government final consumption expenditure (QLAS) updating the treatment of redundancy payments in non-market parts of health care and central government administration to maintain the quality of volume measures of economic activity reviewing and updating the seasonal adjustment additive outlier settings through COVID. Note that while the June 2024 quarter growth rates have revised downward, activity across the three previous quarters has revised upward reflecting an update to how activity is spread across the year. Incorporating new annual information has boosted our estimates of GDP from 2022 onwards and, despite the downward revision to the June 2024 quarter growth rate, the level of activity in the June 2024 quarter is higher than was previously published in the June 2024 quarter. en-NZ