National Accounts- Quarterlies data collection March 2022

Gross domestic product: March 2022 quarter – changes and revisions 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) ). The use of alternative indicators used to capture the impacts of COVID-19 is also summarised in the Overview of sources and methods for quarterly gross domestic product: Updates and COVID-19 adjustments. 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 There are some series that required alternative indicators due to COVID-19 disruptions in the March 2022 quarter. We’ve continued to review and refine approaches applied in each of the quarters from March 2020 to December 2021 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 appropriate, we have used alternative data sources in place of the usual quarterly indicator. We have reviewed all components in the March 2022 quarter and, where necessary, have again used alternative indicators to ensure the effects of the COVID pandemic and related restrictions on activity are appropriately measured. March 2022 quarter gross domestic product and COVID-19[[https://www.stats.govt.nz/methods/december-2021-quarter-gross-domestic-product-and-covid-19]] has details of the alternative data sources and changes in methods applied. It includes latest updates on Key events in the March 2022 quarter Data and methodology considerations Revisions to GDP(P) and GDP(E) components Corrections to quarterly gross domestic product 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) during COVID-19 in New Zealand. Seasonal adjustment additive outlier treatment Sharp changes in activity, such as those caused by the lockdown, pose challenges for our usual seasonal adjustment processes. We have continued our use of additive outliers to treat unusual data points for the March 2022 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. We have added in additive outliers for the following series in the December 2020 and March 2021 quarters: Constant price gross domestic product Constant and current price expenditure on gross domestic product Real gross national income, Real gross disposable income, and Real gross net disposable income We made these changes to avoid any unwanted effects on the seasonal pattern. These changes mean that these series now have additive outliers for all quarters since the beginning of COVID (March 2020). This means that the seasonally adjusted estimates of these series are modelled principally from the usual seasonality that existed prior to COVID. We will likely retain this approach until a time when relative normality has returned to the economy. Please see Seasonal adjustment and additive outliers during COVID-19 for more information. Corrections to quarterly gross domestic product Business price indexes revisions to the December 2021 quarter As reported in the Business price indexes: March 2022 quarter release, an error in the processing of the Business price indexes December 2021 quarter data was corrected during the compilation of the March 2022 quarter’s data. This has caused small revisions across various production components and to various constant price expenditure components. Balance of Payments revisions in the December 2021 Quarter A revision in the Balance of Payments in the December 2021 has been incorporated into Gross Domestic Product estimates. This has caused a downwards revision in imports and an upwards revision to gross fixed capital formation in the December 2021 quarter. See Balance of payments and international investment position: March 2022 quarter for more information. Correction to seasonally adjusted central government series An error in processing during the December 2021 quarter meant that seasonal adjustment was not applied correctly to Central Government Final Consumption Expenditure (CGFCE). This has been corrected and has caused small revisions to the following series (both constant and current price unless otherwise stated): Seasonally adjusted CGFCE Seasonally adjusted General Government Final Consumption Expenditure Seasonally adjusted Final Consumption Expenditure (current price only) Government Final Consumption Expenditure implicit price deflator. Correction to Overseas Trade Indexes After the release of the Overseas Trade Indexes (OTIs) we have identified errors related to the implementation of a new set of Harmonised System (HS) codes. Corrected OTI series will be republished as soon as possible. These errors have been largely accounted for in this GDP release, leading to revisions in December 2021 in Imports and Exports. There are a few aspects under further review and we do expect small revisions to the categorisation of imports and exports in the June 2022 quarter GDP release, when the corrected OTIs are able to be fully incorporated. Correction to household consumption expenditure on communications A late update to input data for household consumption expenditure on communications was not included in the December 2021 quarter. This data has now been incorporated, leading to revisions in the September and December 2021 quarters. Correction to current price household consumption expenditure on housing Adjustments made to household consumption expenditure to account for government expenditure on MIQ facilities did not flow through correctly to current price domestic household consumption expenditure (spending in New Zealand). This has now been corrected, causing revisions from June 2020 quarter onwards. Correction and revisions to updated Household Labour Force Survey (HLFS) and Business Employment data (BED) composite indicator The HLFS-BED composite indicator is a quarterly estimate of activity, calculated by multiplying the number of filled jobs from the BED, by the proportion of usual hours that were actually worked from the HLFS. This is used as an alternative indicator to measure the quarterly change in labour input (total hours worked) for an industry. It was discovered that there was an error in processing of HLFS-BED data. Correcting this, as well as revisions to HLFS and BED data, has contributed to revisions in: Information, media and telecommunications Public administration and safety, central government Health care and social assistance Household Consumption Expenditure Arts, recreation and other services Incorporating updated Business Financial Data (BFD) Revisions due to updated Business Financial Data (BFD) Updated financial data from the Business financial data: March 2022 quarter | Stats NZ collection (BFD) has led to some revisions where we have been using the BFD data collection as alternative indicators from our normal methodology. This contributed to revisions in: Construction Revisions due to improvements in applying alternative indicators from Business Financial Data (BFD) There have been minor revisions to components which use the BFD collection that are not due to the BFD revising, but instead due to other improvements in the processing of BFD data to form our alternative indicators. This has contributed to revisions in: Fishing Accommodation Transport, postal and warehousing Information, media and telecommunications Professional, scientific, technical administrative and support services Gross fixed capital formation – intangibles Revisions due to updated indicator data We received updated respondent information and other source data, causing revisions to: Agriculture – revised data from the Agricultural Production Survey (APS) Electricity, gas, water and waste services – new and updated Linked Employer-Employee Data. Wholesale Trade – Updated BFD Data. Information, media, and telecommunications – updated administrative data from Inland Revenue Department. Finance and insurance – updated FISIM data. Rental, hiring, and real estate services – updated REINZ and QVNZ data, updated FISIM data. Public administration and safety, local government – updated QLAS data Central government administration, defence, and public safety – updated EMS and other input 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 – communications - updated administrative data from Inland Revenue Department. Imports and exports – Updated FISIM data Revisions to inventories Revisions 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 Improvement to gross fixed capital formation – exploration activity We have implemented a slight method change to exploration activity within intangibles in GFKF. This method change has resulted in small revisions from June 2019 quarter onwards. Revisions to travel debits in production-side industries As highlighted in March 2022 quarter gross domestic product and COVID-19, minor travel debits adjustments are added in to multiple production industries to account for reduced business travel due to COVID. This process has caused minor revisions to many production-side industries, most readily seen in the December 2021 quarter. Revisions due to chain linking We use data for March years to calculate chain-volume measures. Previously published quarterly chain-volume measures have been revised because we now have year ended March 2022 results. The revisions affect multiple chain-linked components of both production and expenditure measures of GDP and are particularly noticeable within imports and exports. Revisions table The following table shows previously published and revised quarterly movements for the March 2017–December 2021 quarters’ GDP and expenditure on GDP (GDE). Previously published and revised quarterly movements Gross domestic product Gross domestic expenditure Percentage change from previous quarter Quarter Previously published Revised 16 June 2022 Previously published Revised 16 June 2022 March 2017 1.0 1.0 1.3 1.3 June 2017 1.1 1.1 1.3 1.3 September 2017 0.9 0.9 1.0 1.1 December 2017 0.8 0.8 1.3 1.2 March 2018 0.7 0.8 1.0 1.0 June 2018 1.1 1.1 1.2 1.2 September 2018 0.4 0.3 0.2 0.3 December 2018 1.3 1.3 1.6 1.5 March 2019 0.4 0.6 0.5 0.6 June 2019 0.6 0.5 0.7 0.7 September 2019 1.0 0.8 1.1 1.2 December 2019 0.4 0.3 0.4 0.2 March 2020 -1.5 -1.2 -1.1 -1.0 June 2020 -10.3 -10.3 -9.2 -9.2 September 2020 13.9 13.7 14.0 14.0 December 2020 -0.3 -0.4 -0.8 -1.0 March 2021 1.3 1.7 1.3 1.5 June 2021 2.5 2.4 2.4 2.4 September 2021 -3.6 -3.8 -4.4 -4.3 December 2021 3.0 3.0 2.6 2.5 Source: Stats NZ en-NZ