National Accounts- Quarterlies December 2023 Data Collection

Gross domestic product: December 2023 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 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 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. The quarterly GDP income measure (GDPI) is now official and will be published each quarter in Gross domestic product release, alongside existing official production and expenditure measures of GDP. Quarterly GDPI has been published on the Stats NZ experimental page since March 2021 quarter, as part of National accounts (income, saving, assets, and liabilities). See National accounts (income, saving, assets, and liabilities): Sources and methods (fourth edition) for the data sources and methods used in estimating GDPI as well as income by institutional sector and saving, assets, and liabilities measures. 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 2023. Where necessary, we continue to use alternative indicators to ensure the effects of the COVID pandemic and related restrictions on activity are appropriately measured. 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) and 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 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 subdues the impact of unusual data points on the seasonal adjustment process. The irregular impacts of COVID-19 largely finished in the June 2022 quarter and for most affected series we have stopped applying additive outlier treatment from the September 2022 quarter onwards. As activity returns to more stable patterns there will be a period of uncertainty around seasonal adjustment factors, especially for series heavily affected by COVID restrictions. For a small number of component series, we continue to apply additive outliers in all quarters during and post-COVID. These series include: imports of travel services, and exports of services, travel services and transport services (in current and constant prices). Travel credits and travel debits (Household consumption expenditure) For these series there are level shifts apparent that may require more complex modelling in the seasonal adjustment process or more data points available to have confidence in changing additive outlier settings for recent quarters. For the impacted imports and exports series, we continue to retain identical additive outlier treatment between equivalent Gross Domestic Product and Balance of Payments series. We plan to review seasonal adjustment settings during and around the COVID-19 period in the near future, as it is possible that some settings chosen during the pandemic are no longer optimal as we move towards a different economic environment. This review is likely to result in changes to treatment, and hence revisions, for some series – especially those most affected by the pandemic. When finalised, any changes will be clearly signalled in advance of publication. Corrections to quarterly gross domestic product Correction to Manufacturing A correction has been made to the process for compiling estimates for the manufacturing activity, which impacts from the June 2021 quarter onwards. Correction to unallocated taxes There was a processing error in the compilation of unallocated taxes in the September 2023 quarter release that has been corrected, resulting in changes to the June and September quarter estimates. Changes due to updated indicator data Incorporating updated International Trade data The International Trade data has been updated in the June and September 2023 quarters, with updates to education services exports. International Trade: December 2023 quarter has more information. Updates to the overseas merchandise trade (OMT) Updated prices for intermediate goods, parts, and accessories of capital good in the overseas merchandise trade data has led to updates in imports from the March 2023 quarter onwards. Overseas merchandise trade: December 2023 has more information. Incorporating annual agricultural production statistics We incorporated data from Agricultural production statistics: Year to June 2023 (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 March 2022 quarter onwards. Incorporating updated Value of building work put in place data The Value of building work put in place (also known as Quarterly Building Activity Survey (QBAS)) has updated data from the March 2023 quarter onwards. This has caused changes to both construction and gross fixed capital formation over the same period. Value of building work put in place: December 2023 quarter has more information. Incorporating updated Linked Employer-Employee Data (LEED) The Linked Employer-Employee Data (LEED) has updated data from September 2022 quarter onwards. This has caused changes to electricity, gas, water, and waste services over the same period. Linked employer-employee data: December 2022 quarter – NZ.Stat tables has more information. Incorporating updated Business Financial Data (BFD) The Business Financial Data (BFD) has updated data from September 2023 quarter. This has caused changes to arts and recreation over the same period. Business financial data: December 2023 quarter has more information. Incorporating updated Local Authority Statistics Data (QLAS) The Local Authority Statistics data has been updated in the December 2023 quarter, causing updates to public administration and safety; and local government final consumption expenditure. Local authority statistics: December 2023 quarter has more information. Updates to the wholesale trade survey (WTS) Updated wholesale trade survey data has led to updates in gross fixed capital formation for September 2023 quarter. Business financial data: December 2023 quarter has more information. Updates to travel debits in production-side industries Minor travel debits adjustments are added into multiple production-side industries to account for lower international travel due to COVID-19. Updates to the data used in this process has caused minor changes to many production-side industries. Quarterly Employment Survey (QES) changes Low-level QES data is used as quarterly indicators for 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 December 2023 quarter are: Information, media, and telecommunications Arts and Recreation Household consumption expenditure (HCE) Labour Market Statistics: December 2023 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 & Fishing – new and updated Linked Employer-Employee Data (LEED) Manufacturing – new and updated Ministry of Business, Innovation and Employment (MBIE) data, BFD data Electricity, gas, water and waste services – new and updated MBIE data Wholesale Trade - new and updated MBIE data Transport, post and warehousing - new and updated MBIE data Information, media, and telecommunications – updated administrative data from Inland Revenue Department Finance and Insurance – updated financial intermediation services indirectly measured (FISIM) data Rental, hiring, and real estate services – updated Quotable Value (QV) data, updated FISIM data Public administration and safety, local government – updated Quarterly Local Authority Survey (QLAS) data Arts and Recreation – updated Business Financial Data (BFD) Household consumption expenditure – updated travel credits data Local government final consumption expenditure – updated QLAS data Gross fixed capital formation – Updated QBAS data, wholesale trade data (WTS), QV data, New Zealand Defence Force data, and other updated respondent data Imports and exports – updated International Trade and Overseas Merchandise Trade data Unallocated taxes – flow-through from updates to household consumption expenditure 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. Updates in applying alternative indicators There have been minor updates to components which have used alternative indicators through COVID 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 from the March 2020 quarter 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: Business services Updates in GDP income measure The updates to Business Financial Data (BFD), Quarterly Building Activity Survey (QBAS), final consumption expenditure, gross fixed capital formation, inventories, imports and exports of goods and services will flow through to GDPI series. Implementing updated quarterly methodologies Updates and improvements to GDP production Changes to quarterly insurance volumes We have made improvements to the way we deflate general insurance premium data in the financial and insurance services industry under the production measure of GDP. These changes resulted in updated quarterly movements throughout the series, but since the indicators are reconciled to annual benchmarks there are no changes to year-ended-March annual levels or movements. Updates and improvements to GDP expenditure Changes to seasonal adjustment of GDP expenditure aggregates We have made improvements to the process of seasonal adjustment and how it interacts with coherence adjustments to inventories levels. For quarters prior to September 2006 these adjustments were applied after seasonal adjustment. We have changed this to align with the approach from September 2006 onwards of applying coherence adjustments prior to seasonal adjustment. This reduces the heteroskedasticity of our timeseries which substantially improves the functioning of seasonal adjustment diagnostics over the last few years. Whilst the improvement in the quality of seasonal adjustment is obvious from September 2006 onwards and in particular the last few years, the benefits of updating the earlier part of the timeseries are less clear. At this stage we have suppressed updates to seasonally adjusted GDP expenditure aggregates prior to September 2006. This approach will be considered as part of the wider review of our seasonal adjustment approaches this year. Updates and improvements to GDP income Changes to quarterly indicator for compensation of employees We have made method improvements to compensation of employees for superannuation funds; non-residential property operation; electricity generation and on-selling; and air and space transport to maintain the data quality. They were previously using BFD salaries and wages as indicator, but now use interpolation with no indicator for all the institutional sectors of Superannuation funds and for the non-profit business enterprises sector of Non-residential property operation. For electricity generation and on-selling and air and space transport, we have made method improvements from June 2011-March 2016 quarters to align better with managed collection data from June 2016 quarters onwards. Data updates table The following table shows previously published and updated quarterly movements for the September 2016 – December 2023 quarters’ GDP and expenditure on GDP (GDE). There were also some changes to earlier quarters, but these were less material. All movements below 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 21 March 2024 Previously published Updated 21 March 2024 September 2016 0.9 1.0 0.8 0.7 December 2016 0.3 0.3 0.2 0.3 March 2017 1.0 1.0 1.3 1.3 June 2017 0.9 0.9 1.3 1.3 September 2017 0.8 0.7 1.0 0.9 December 2017 1.0 1.0 1.3 1.4 March 2018 0.8 0.8 0.9 0.9 June 2018 1.1 1.1 1.3 1.3 September 2018 0.2 0.2 -0.1 -0.2 December 2018 1.5 1.5 1.5 1.7 March 2019 0.7 0.7 1.0 0.9 June 2019 0.3 0.3 0.4 0.3 September 2019 0.9 0.8 0.9 0.8 December 2019 0.7 0.8 0.3 0.6 March 2020 -1.2 -1.2 -0.8 -1.0 June 2020 -10.1 -10.2 -9.5 -9.6 September 2020 14.1 14.1 13.7 13.6 December 2020 0.0 0.2 0.0 0.4 March 2021 1.8 1.8 2.1 1.9 June 2021 1.3 1.2 1.8 1.7 September 2021 -3.8 -3.9 -4.3 -4.4 December 2021 3.4 3.6 3.0 3.6 March 2022 0.0 -0.1 -0.1 -0.4 June 2022 1.1 1.0 1.5 1.2 September 2022 1.8 1.8 2.1 2.1 December 2022 -0.6 -0.4 -1.0 -0.4 March 2023 -0.2 -0.3 -0.6 -0.5 June 2023 0.5 0.5 0.9 0.5 September 2023 -0.3 -0.3 -0.7 -0.4 Source: Stats NZ en-NZ