National Accounts (Income and Expenditure): Year ended March 2015

Period-specific information This release contains revisions arising from new and updated information, and implements the updated international standards. It incorporates the National Accounts (Industry Benchmarks): Year ended March 2013 statistics and new and improved information. Estimates for 2014 and 2015 are provisional Figures for the March 2014 and 2015 years are provisional, and incomplete for the business sectors of the economy. We will incorporate more up-to-date information in future releases. The new information will also affect distributions between the business and household sectors and flow into household saving. National Accounts (Income and Expenditure): Year ended March 2016 will provide provisional estimates for the March 2016 year and revised estimates for the March 2014 and 2015 years. Revisions to the national accounts next year will result from up-to-date information becoming available, including updated data from the Annual Enterprise Survey: 2014 financial year (provisional) and initial inclusion of detailed results from the 2015 Annual Enterprise Survey. Statistics for the years up to 2013 are consistent with National Accounts (Industry Benchmarks): Year ended March 2013. Improvement in the provision of data The Excel tables are presented in an improved format to make it easier for customers to analyse the data. The data can now be downloaded in CSV format, which includes status flags to indicate the data values that have been revised since the last release. Revisions This year’s annual national accounts reflect revisions to previously published data for some series. Some of these revisions will flow through to the quarterly GDP statistics release on 17 December, alongside further revisions to quarterly GDP methods for agriculture. Revisions are being made to data back to 2003, to reflect: the incorporation of more up-to-date data (primarily 2013 Census and 2013 Household Expenditure Survey) improvements to national accounting methods in response to internal quality review. The reasons for the revisions, and an evaluation of their impact, are explained in the Preview of 2015 national accounts improvements that was published on 3 November. The revisions discussed in this paper are in keeping with Statistics NZ’s general policy of revisions in macro-economic statistics. It is standard practice to update the accounts with periodically updated data like the census and the Household Expenditure Survey. Significant economic changes, including the global financial crisis and Canterbury earthquakes, occurred during the period being revised. Rapid economic change increases the need to maintain key areas of economic measurement to ensure the overall economic story remains robust. The revisions in this year’s national accounts follow last year’s revisions, which were due adopting new international standards for macro-economic statistics. Last year’s revisions are discussed in Preview of 2014 national accounts improvements. Revisions to National Accounts (Industry Benchmarks) The revisions to National Accounts (Industry Benchmarks) result from balancing the production and expenditure estimates of gross domestic product (GDP) within a supply-and-use framework. For balancing we mainly incorporated the up-to-date information from the 2012 and 2013 annual economic surveys, but also included updated and new information from other data sources. Annual national accounts sources and methods has more information. Revisions to balance of payments Balance of Payments and International Investment Position: Year ended 31 March 2015 included revisions to overseas investment income, which are included in this release. Revisions of note came from updated Inland Revenue data from the latest tax returns for companies, individuals, and other relevant units: Improvements and corrections affecting 2003 to 2011 This release incorporates improvements and corrections that affect annual industry components for several years outside the usual revision period. Preview of 2015 national accounts improvements includes analysis and interpretive information on the updates to the years 2003 to 2011. Revisions to national saving in 2014 from new and improved information Revisions to national saving in 2014 are due to the availability of more accurate data for provisional estimates: partial incorporation of the Annual Enterprise Survey 2014 updated tax data. Revisions to national saving from 2007 to 2013 We have made small revisions to national saving from 2007 to 2013. The main factors to these updates are associated with revisions to investment. These revisions include updated investment values for which saving is used and the resulting updates to depreciation expenses. National saving revisions summary Year ended March National saving in current price, $(million) Published Jan Published Nov 2015 2007 4,381 4,492 2008 7,648 7,749 2009 788 954 2010 5,707 5,358 2011 5,452 5,262 2012 6,636 6,655 2013 7,125 6,872 2014 14,163 13,769 Revisions to household savings Revisions to household saving in 2014 are due to the availability of more accurate data for provisional estimates. Revisions to 2007 to 2013 have resulted from: Incorporating the new supply-use benchmarks from balancing Correcting data for housing services We corrected data from 2007 onwards to consistently account for quality changes in residential accommodation rental services. This group includes accommodation services of owner-occupied dwellings. Before the correction, the value of residential accommodation services was understated. New data for measuring household consumption becoming available from two key sources: Household Economic Survey (HES) 2013 Census. The new data provided updated information about the mix of goods and services consumed by households from 2003. Every third year, annual HES data is based on data collected from a more extensive survey, while the years between are modelled from other indicators. In addition, the national accounts measures of household consumption model some components from census data. We incorporated data from the 2013 Census and updated the methodology for using the census benchmarks. Updating our method for measuring gambling services We developed an improved method for measuring gambling within recreational services. Measuring gambling has known difficulties, as long-standing evidence shows that households under-report net spending (expenditure on bets net of winnings). The old method resulted in too large an adjustment to account for the under-reporting. The updated method makes better use of administrative data available from the Department of Internal Affairs. An understatement of items like gambling can also imply that other items of expenditure are overstated. The method also accounts for related overstatements. Updating our method for measuring entrepreneurial income We improved our method for measuring the activity of non-corporate businesses, such as sole traders and partnerships. The industry most affected by this was agriculture, reflecting the ownership structure of farms. The new method improves the allocation of farm business units between the private corporate and private non-corporate business sectors. The corporate structures of businesses influence how income flows to the household sector. Within the national accounts framework all profits of private non-corporate businesses are recorded as household income. --- --- --- Published Jan Published Nov 2015 2003 -4,964 -4,814 2004 -3,547 -3,376 2005 -3,354 -3,121 2006 -5,636 -5,178 2007 -3,539 -3,864 2008 -1,512 -382 2009 -1,383 -2,218 2010 991 1,427 2011 3,200 2,552 2012 1,766 3,003 2013 2,889 2,602 2014 2,796 2,389 Improvements to gross fixed capital formation Provisional estimates for gross fixed capital formation have been improved in this release as a result of improved methodology. Provisional AES data for 2014 has now been incorporated into our provisional methods for residential buildings; non-residential buildings; other construction; and plant, machinery, and equipment. This methodology improvement is particularly notable for ‘other construction’ due to our reliance on AES data for measuring this type of activity. We have also improved our measure of own-account software by introducing a labour cost index. This should aid in reducing the revisions arising from incorporating census data in the future. Gross fixed capital formation-revisions summary Year ended March Gross fixed capital formation in current price, $(million) Other construction in current price, $(million) Published Jan 2015 Published Nov 2014 Published Jan 2015 Published Nov 2015 2010 39,278 39,037 7,020 7,020 2011 40,087 39,992 5,890 5,862 2012 42,216 42,326 6,750 6,600 2013 45,910 45,010 7,845 7,195 2014 50,928 48,508 8,585 7,000 Status flags to indicate which specific values we have revised are available in Infoshare, and in the CSV files included in this release. en-NZ