National accounts (income, saving, assets, and liabilities): March 2023 Data Collection

1. Introduction National accounts (income, saving, assets, and liabilities) for New Zealand have been produced from the June 2016 quarter and are updated each quarter. The series in these accounts are in current (nominal) price, in both actual and seasonally adjusted terms. The National accounts (income, saving, assets, and liabilities): Sources and methods are thoroughly documented. The data used to compile our estimates of quarterly income, saving, assets, and liabilities are the best that we have available at that point in time. When compiling our quarterly estimates, we usually face trade-offs between timeliness and the quality, coverage, length of historical series, and conceptual alignment of available data sources. As a result, the methodologies vary depending on the data available and are underpinned by certain assumptions. These statistics are experimental and may be subject to greater change than other releases as we improve methodology or include more comprehensive data. Part of the rationale for releasing estimates on an experimental basis is to allow users an opportunity to comment on methods and details of published series. If you have any feedback or comments that you’d like to pass on, or for more information on changes, email [email protected]. 2.Data Collection and Methodology changes 2.1 Source data updates 2.1.1 Updates from Gross Domestic Product (GDP) series GDP estimates are reflected in national accounts (income, saving, assets, and liabilities) where the same series are used in both publications. In this release there are data updates flowing through from GDP to the following series: Final Consumption Expenditure - Changes to the central government sector after incorporating updated input data. - Changes to the local government sector after incorporating updated Quarterly Local Authority Survey (QLAS) data. - Changes to the household sector after incorporating updated input data Inventories – changes due to the process designed to minimise inconsistencies in timing and valuation. Gross fixed capital formation (GFKF) - changes due to incorporating updated input data and updated quarterly building statistics (QBAS) data. We have also included some updates to wholesale stocks. Data updates to GFKF can flow through to taxes on production and imports. Imports and exports of goods and services – changes due to updated international trade data. See Gross domestic product: March 2023 quarter – changes and data updates – DataInfo+ for further information. See International trade: March 2023 quarter for more information on the international trade data updates. 2.1.2 Updates from Balance of Payments (BOP) and International Investment Position (IIP) The Rest of World sector is subject to updates in all accounts each quarter due to BOP and IIP updates. These changes are due mainly to respondents updating their previously reported data, which affects the previously published quarter. All accounts can be updated for the Rest of World sector, and updates to the Rest of World sector may result in changes to resident sectors that are estimated from the counterparty dimension of BOP and IIP data. 2.1.3 Updates to land Quarterly estimates of non-produced non-financial assets (land) are derived by using annual land estimates from CoreLogic property values by property type, quarterly CoreLogic residential property estimates for recent quarters, and movements in the CoreLogic House Price Index (HPI) in latest quarters when residential property estimates are not yet available. The HPI estimates for the most recent two quarters are updated as CoreLogic collects more data on housing and land transactions. Thus, given the value of housing and land in New Zealand (over one trillion dollars) it is expected that updated HPI values may contribute to substantial changes in some sectors. This is particularly the case for the non-financial business enterprises sector (which contains most of the residential property operators) and the household sector. In quarters after the last annual balance sheet benchmarks, property values are used as a control total for each sector, then estimates for non-financial assets such as buildings and land improvements are deducted, to derive land estimates as a residual. Land estimates have also been revised in the March 2023 quarter release due to incorporating updated accumulation account annual benchmarks (refer to section 2.1.4). 2.1.4 Incorporation of annual accumulation account benchmarks Some balance sheet series have been updated due to incorporating annual benchmarks from annual accumulation accounts: National accounts (change in assets): 2008–2021. Accumulation accounts explain the movement from one balance sheet to the next in terms of transactions, revaluations, and other volume changes. These are estimated on a quarterly basis for non-financial assets and are used in projecting forward closing balance sheet values from the last balance sheet benchmark (as at March 2021). They also provide information for quarterly balance sheet estimates between benchmark quarters. Updating accumulation account benchmarks has caused large changes for two components of non-produced non-financial assets, in particular land, and goodwill and marketing assets. These affect quarters between March benchmarks, and all quarters after the last benchmark in March 2021. These changes also flow through to assets and liabilities of equity and investment shares. 2.1.5 Other source data updates Other source data updates caused minor changes to: gross operating surplus and gross mixed income for the non-financial and financial business enterprises sectors and entrepreneurial income for the household sector – updated data from the Business Financial Data collection, the Agricultural Production Survey (APS) and updated Financial Intermediation Services Indirectly Measured (FISIM) data. Compensation of employees for the household sector - updated data from the Business Financial Data collection and changes to seasonal adjustment outlier treatment. 2.2 Methodology changes 2.2.1 Seasonal adjustment outlier treatment Sharp changes in activity, such as those caused by the COVID-19 lockdown, pose challenges for our usual seasonal adjustment process. We have continued our use of additive outliers to treat unusual data points for the March 2023 quarter and retained the previous outliers applied from March 2020 quarter onwards. This has the effect of subduing the impact of unusual data points on the seasonal adjustment process. As a result, the seasonally adjusted results since the beginning of the COVID-19 pandemic have largely reflected the level of economic activity relative to the usual seasonality prior to the pandemic. We expect to undertake further review of the seasonal adjustment and additive outlier settings before future releases, particularly for the June 2023 quarter release when we will have a full year of data available following the end of COVID border restrictions. At this stage, there are a small number of data points from September 2022 onwards that are contributing to the seasonal adjustment. These points are quite influential in the decomposition into trend, seasonal, and irregular components. As additional data points are added in future quarters, we expect greater than usual changes to seasonal factors. This will result in further updates to the seasonally adjusted growth rates from prior to COVID-19 through to the latest quarters. Over time the estimation of trend and seasonality will stabilise as post-COVID patterns become more established. 2.2.2 FISIM incorporation update Interest estimates have been updated due to changes in the FISIM (Financial Intermediary Services Indirectly Measured) calculations and their application to the interest estimates. These improvements incorporate more timely use of S20 interest rate series from the Reserve Bank. Earlier quarter revisions are due to the incorporation of the B7 series as an input data source. These changes are seen going back through the time series and affecting recent quarters the most beyond the last benchmarked period, the year ended March 2021. 3 Changes to previously published statistics 3.1 Changes to Income and Outlay statistics 3.1.1 Changes to household saving Changes to household saving back in the June 2016 quarter was due to the revised FISIM adjustments affecting interest and the incorporation of the B7 Cost of deposits series – a new series available from the Reserve Bank. This new series offers timelier and more direct fit for purpose values. There were updated numbers of dividends receivable due to the inclusion of New Zealand superannuation funds. The following table shows the previously published and updated quarterly household saving from the June 2016–December 2022 quarters. Household saving in current prices, actual values (not seasonally adjusted), ($million) Quarter Published April 2023 Published July 2023 Jun-16 -414 -384 Sep-16 -578 -585 Dec-16 -1,183 -1,205 Mar-17 1,543 1,541 Jun-17 -1,115 -1,173 Sep-17 -591 -587 Dec-17 -671 -666 Mar-18 1,558 1,609 Jun-18 -213 -221 Sep-18 249 230 Dec-18 -981 -990 Mar-19 1,550 1,587 Jun-19 566 534 Sep-19 717 740 Dec-19 271 295 Mar-20 3,376 3,362 Jun-20 7,115 6,968 Sep-20 3,173 3,131 Dec-20 1,530 1,616 Mar-21 5,984 6,088 Jun-21 -122 -27 Sep-21 3,892 4,057 Dec-21 917 830 Mar-22 2,097 1,955 Jun-22 1,268 1,030 Sep-22 1,735 1,300 Dec-22 419 -149 3.2. Changes to Balance Sheet statistics The main updates are seen in land (refer to section 2.1.3), goodwill (refer to section 2.1.4), and equity and investment fund shares, and in turn change net worth across different sectors. More details on the changes by sector are as follows. Non-financial business enterprises Land as described above has been updated for the December 2022 quarter, up $689 million. This sector includes residential rental properties owned by households. The non-financial business enterprise sector is the balancing sector for financial derivatives. This is down $3.0 billion due to updates from sector 2 financial business enterprises, both on the assets and liabilities sides. Similarly, this sector is the balancing sector for accounts payable. This is down $1.2 billion in the December 2022 quarter, a combination of changes from various other sectors. Financial business enterprises Goodwill as described above has been updated and impacts mainly from the June 2021 quarter. Loans, both assets and liabilities, have been updated for the December 2022 quarter due to updated data for the Rest of World, which is used as an indicator for this sector. Financial derivates, both assets and liabilities, and insurance, pension, and standardised guarantee scheme assets, have been updated for the December 2022 quarter due to updates from the Managed Funds Survey (MFS). Households Land as described above has been updated and impacts on most quarters. Household equity and investment fund share assets have been updated for most quarters as this sector is the balancing sector for this instrument. Changes to other sectors’ equity and investment fund shares impact on the household sector, and in turn also change the net worth estimates. Rest of the world (RoW) The Rest of World sector is subject to updates in all accounts each quarter due to BOP and IIP updates. These changes are due mainly to respondents updating their previously reported data, which affects the most recent previously published quarter. There are updated values across several classes for assets and liabilities for the December 2022 quarter. These changes are mainly from survey respondents re-stating their previous reported estimates. There were no methodology related changes in the quarter. All accounts can be updated for the Rest of World sector, and updates to the Rest of World sector may result in changes to resident sectors that are estimated from counterparty dimension of BOP and IIP data. en-NZ