National Accounts- Quarterlies December 2022 Data Collection

Gross domestic product: December 2022 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). 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 to compile our estimate of GDP 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/or conceptual alignment of available data sources to the component it is meant to represent. As a result, the methodologies that we use vary depending on the data available and are underpinned by certain assumptions. In normal periods of activity, these assumptions provide us with reasonable estimates of activity. In periods of abrupt disruption (such as the COVID-19 alert level 4 lockdowns) some of these relationships have weakened or no longer hold. Changes made due to COVID-19 We’ve continued to review and refine approaches applied in each of the quarters from March 2020 to December 2022 by confronting our usual quarterly indicators against other data sources to identify instances where our usual quarterly indicators were unable to represent the actual level of activity through the quarter. Where necessary, we have again used alternative indicators to ensure the effects of the COVID pandemic and related restrictions on activity are appropriately measured. This includes appropriately measuring activity during the easing of such restrictions. 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). Seasonal adjustment additive outlier treatment Sharp changes in activity pose challenges for our usual seasonal adjustment processes. Over recent periods, we have applied additive outlier treatment to our headline GDP estimates, as well as to those industries and components with major impacts from border closures or domestic COVID-19 restrictions. This has had 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. The irregular impacts of COVID-19 largely finished in the June 2022 quarter. However, in some cases, multiple quarters of unaffected activity may need to be seen before the seasonal adjustment algorithm can appropriately interpret new data. We have carried out testing on a range of hypothetical outcomes for future quarters and are stopping additive outlier treatment for each series where we are confident there is sufficient data for seasonal adjustment to perform better without additive outliers. This testing has shown that for the majority of affected series we should stop applying additive outliers in the September 2022 quarter, allowing data points from September 2022 onwards to contribute to the seasonal adjustment process. We have made this change for both GDP measures and for a number of the components which had additive outliers applied throughout the majority of the COVID-19 affected period. This change in additive outlier treatment has caused some changes to seasonally adjusted growth rates throughout the COVID affected period, resulting from allowing the September and December 2022 data points to influence the seasonal adjustment. The impact of this change to the two GDP measures is summarized in table 1 below. For some component series we have continued to apply additive outliers in the September and December 2022 quarters. 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 revisions 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. Table 1: Table of previously published and updated quarterly movements. The following table shows previously published and updated quarterly movements with different seasonal adjustment and additive outlier settings. Gross domestic product Gross domestic expenditure Previous seasonal adjustment settings New seasonal adjustment settings Previous seasonal adjustment settings New seasonal adjustment settings Quarter Previously published Updated Updated Previously published Updated Updated March 2019 0.6 0.6 0.6 0.7 0.7 0.6 June 2019 0.6 0.6 0.5 0.6 0.6 0.6 September 2019 0.9 0.9 0.8 1.1 1.1 0.8 December 2019 0.5 0.4 0.8 0.2 0.1 0.5 March 2020 -1.1 -1.1 -1.1 -0.9 -1.2 -1.3 June 2020 -10.1 -10.1 -10.3 -9.7 -9.6 -9.7 September 2020 14.1 14.1 13.9 14.9 14.7 14.3 December 2020 -0.6 -0.5 0.0 -0.8 -0.5 0.1 March 2021 2.1 2.1 2.0 1.6 1.7 1.5 June 2021 2.4 2.3 2.1 2.3 2.5 2.5 September 2021 -3.9 -3.9 -4.1 -4.1 -4.2 -4.5 December 2021 2.9 2.9 3.5 2.4 2.4 3.1 March 2022 -0.4 -0.3 -0.5 -0.3 -0.3 -0.6 June 2022 1.9 1.9 1.6 2.3 1.9 1.9 September 2022 2.0 1.9 1.7 2.0 2.4 1.9 Incorporating International trade data updates Updates to previously published statistics in International trade: December 2022 quarter | Stats NZ have not had a material impact on previously published headline GDP (GDP production). There has been a greater degree of impact to previously published expenditure GDP, and also to lower-level published series of both measures. Table 2: Table of International trade data updates. Affected component Mar-20 Jun-20 Sep-20 Dec-20 Mar-21 Jun-21 Sep-21 Dec-21 Mar-22 Jun-22 Sep-22 Goods exports (fob) -200 -90 -170 -120 -60 270 0 0 0 0 -40 Goods imports (vfd) 0 0 0 0 0 0 0 0 0 630 560 Services imports 0 0 15 6 10 80 60 20 70 300 700 FOB: free on board valuation VFD: Value for duty valuation Changes to Production GDP Our headline production measure of GDP has incorporated minor updates to unallocated taxes in the June 2022 and September 2022 quarters, via updates to import duties. There have also been updates to business travel debits adjustments, which affect most published industries, in the period from September 2020 onwards. Changes to Expenditure GDP The main impacts will be to components of the expenditure measure, GDP(E). In particular: There have been upwards revisions to imports consistent with those seen in the international trade and balance of payments releases, as summarised in table 2 above. Impacts date back to March 2020 quarter, with the largest being in June and September 2022 quarters. There have been upwards revisions to household consumption expenditure due to the upwards revision of travel debits. These include small changes from September 2020 onwards, and large changes to June 2022 and September 2022 quarters. There have been upwards revisions to plant, machinery, and equipment, and transport equipment gross fixed capital formation in the September 2022 quarter due to the international trade data updates. There have been updates to change in inventories. We have made a number of minor changes to manufacturing inventories as part of our usual process to reconcile timing and coverage between our production and expenditure measures. There have been revisions to exports which will match those seen in international trade and balance of payments releases as summarised in table 2 above. These affect the period from March 2020 quarter to June 2021 quarter. Corrections to quarterly gross domestic product Correction to retail trade and accommodation We have corrected an issue with how we were applying business travel debits adjustments to two subindustries of retail trade. This correction has resulted in minor data updates for the year ended March 2021. Corrections to unallocated taxes We have corrected an issue with the coverage of our fuel indicator used in the measurement of import duties. We have also made changes to the timing of capturing bulk fuel. These corrections have resulted in data updates from the September 2006 quarter onwards. Correction to Gross fixed capital formation – transport equipment We have corrected the way in which we are recording progressive part payments for defence force aircraft to align with the economic ownership principles of the system of national accounts. These corrections have resulted in data updates from the June 2020 quarter onwards. Updates due to improvements in applying alternative indicators We have made improvements to how we process HLFS data where it is being used in alternative indicators. This has contributed to updates in: Information, media, and telecommunications Healthcare and social assistance Arts and recreation Household consumption expenditure There have been minor updates due to other improvements in the processing of data to form our alternative indicators. This has contributed to updates in: Fishing, aquaculture, and agriculture, forestry and fishing support services Transport, postal and warehousing Professional, scientific, technical administrative and support services Gross fixed capital formation – intangibles Household consumption expenditure Changes due to updated indicator data Incorporating annual agricultural production statistics We incorporated data from Agricultural production statistics: Year to June 2022 (provisional) | Stats NZ. The data replaced earlier published data and modelled stock levels. Incorporating the data led to updates to agricultural activity in GDP, and to agricultural inventories in the expenditure measure of GDP. These changes caused updates from the June 2021 quarter onwards. Incorporating updated Linked Employer-Employee Data (LEED) The Linked Employer-Employee Data (LEED) has updated data from June 2021 quarter onwards. This has caused changes to electricity, gas, water, and waste services over the same time period. Incorporating updated QBAS data The Quarterly Building Activity Survey (QBAS) has updated data from March 2022 quarter onwards. This has caused changes to both construction and gross fixed capital formation over the same time period. Please see Please see Value of building work put in place: December 2022 quarter for more information. Changes due to updated indicator data We received updated respondent information and other source data, causing updates to: Agriculture – updated data from the Agricultural Production Survey (APS) Manufacturing – updated from the Economic survey of manufacturing data and other input data Electricity, gas, water and waste services – new and updated Linked Employer-Employee Data (LEED) Finance and insurance – updated FISIM and other input data Rental, hiring, and real estate services – updated REINZ and QVNZ data, updated FISIM data, updated CPI rental index Public administration and safety, local government – updated Quarterly Local Authority Statistics (QLAS) data Local government final consumption expenditure – updated QLAS data Gross fixed capital formation – Non-residential buildings, Residential buildings – updated REINZ and QVNZ data Household consumption expenditure – miscellaneous goods and services – updated FISIM data Household consumption expenditure – housing and household utilities – updated CPI rental index Imports and exports – updated FISIM data Unallocated taxes – flow-through from updates to household consumption expenditure Inventories – updated Business Financial Data (BFD) 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 is designed to minimise inconsistencies in timing and valuation. Implementing updated quarterly methodologies Changes to healthcare and central government final consumption expenditure Due to the restructuring within the healthcare sector, we have experienced challenges in obtaining a continuous estimate of central government healthcare, in both our production and expenditure measures. This quarter we have made significant changes to the approach used to derive September 2022 estimates for healthcare. It is possible this approach will be subject to further changes in future quarters. Change to Gross fixed capital formation – other construction We have made improvements to the price deflator used for construction of pipelines. This resulted in small data updates for the whole time series. Change to Gross fixed capital formation – plant, machinery and equipment We have made improvements to the price deflator used for batteries. This resulted in small data updates for the whole time series. Data updates table The following table shows previously published and updated quarterly movements for the June 2017 – September 2022 quarters’ GDP and expenditure on GDP (GDE). There were also some changes to earlier quarters, but these were less material. Previously published and updated quarterly movements Gross domestic product Gross domestic expenditure Percentage change from previous quarter Quarter Previously published Updated 16 March 2023 Previously published Updated 16 March 2023 June 2017 1.0 1.0 1.4 1.4 September 2017 0.9 0.8 1.2 1.0 December 2017 0.9 1.0 1.2 1.3 March 2018 0.8 0.8 0.8 0.8 June 2018 1.3 1.2 1.4 1.4 September 2018 0.2 0.1 0.1 -0.1 December 2018 1.3 1.5 1.4 1.7 March 2019 0.6 0.6 0.7 0.6 June 2019 0.6 0.5 0.6 0.6 September 2019 0.9 0.8 1.1 0.8 December 2019 0.5 0.8 0.2 0.5 March 2020 -1.1 -1.1 -0.9 -1.3 June 2020 -10.1 -10.3 -9.7 -9.7 September 2020 14.1 13.9 14.9 14.3 December 2020 -0.6 0.0 -0.8 0.1 March 2021 2.1 2.0 1.6 1.5 June 2021 2.4 2.1 2.3 2.5 September 2021 -3.9 -4.1 -4.1 -4.5 December 2021 2.9 3.5 2.4 3.1 March 2022 -0.4 -0.5 -0.3 -0.6 June 2022 1.9 1.6 2.3 1.9 September 2022 2.0 1.7 2.0 1.9 Source: Stats NZ en-NZ