National Accounts - Quarterlies September 2020

Gross domestic product: September 2020 quarter – changes and revisions Introduction Gross domestic product (GDP) sources and methods are well 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) ). Changes made due to COVID-19 COVID-19 presented a lot of challenges to GDP compilers around the globe. We have used a range supplementary data to carefully evaluate our estimates and, where necessary, have used alternative data sources to produce more precise and accurate measurement of GDP this quarter. The industries and expenditure components where such changes have been made to existing data sources and methods this quarter were highlighted in September 2020 quarter gross domestic product and COVID-19. All changes indicated in that paper have been implemented in this release, apart from the following adjustment to our approach for measuring the consumption expenditure of non-profit organisations serving households: • The normal method is interpolation without an indicator. For March and June 2020 quarters, we used employee counts for non-profit organisations serving households, by industry, as weights. These were then multiplied by quarterly movements in these industries observed on the production side. For the September 2020 quarter we have reverted to our usual method. In addition to the industries and expenditure components discussed in the paper, changes were also made to the following gross fixed capital formation components: • The research and development component of intangibles usually uses interpolation without a quarterly indicator. For the June 2020 quarter, movements in Business Data Collection sales data was used. For the September 2020 quarter we have used our usual method. • The local government component of other construction uses interpolation without a quarterly indicator. In March 2020 quarter an adjustment was made to account for the days in alert level 4 lockdown. In June 2020 quarter and September 2020 quarter, Business Data Collection sales data has been used. • Parts of the private and central government components of other construction use interpolation without a quarterly indicator. In June 2020 quarter and September 2020 quarter, Business Data Collection sales data has been used. • Land improvements usually is interpolation without a quarterly indicator. In June 2020 and September 2020 quarters we used low level movements from other construction to represent this component. Seasonal adjustment treatment Sharp changes in activity, such as those caused by the lockdown, pose challenges for our usual seasonal adjustment processes. We have reviewed all series and have applied outliering of the latest data point where required. This has the effect of subduing the impact of unusual data points on the seasonal adjustment process. Revisions The September 2020 quarter release of gross domestic product, incorporates a range of updates impacting on our estimates of quarterly and annual economic growth. The updates were the result of: • incorporating data from the annual national accounts • incorporating new updated data weights • incorporating 2018 Census data • incorporating 2019 Household Expenditure Survey (HES) results • implementing updated quarterly methodologies • revision of Producer Price Index (PPI) • revisions due to updated indicator data These updates reflect a regular programme of maintaining and enhancing our measurement of quarterly and annual economic growth. Such updates are implemented into Gross domestic product each September quarter. Incorporating data from the annual national accounts Each year, we make regular updates to the most recent data in the annual national accounts. These updates generally reflect more accurate data becoming available from the underlying data sources, such as the low-level financial data that becomes available with the annual enterprise survey update. The annual national accounts are released in November each year and present a comprehensive view of the economy that draws together data from more detailed but less timely sources. The availability of more detailed data allows us to understand the level of activity that has occurred over the period and reflect these in our volume estimates of quarterly and annual economic growth. The release of National accounts (industry production and investment): Year ended March 2019 provides the annual benchmarks for GDP(P) up to the year ended March 2019. The release of National accounts (income and expenditure): Year ended March 2020 provides the benchmarks for GDP(E) up to the year ended March 2020. We reconcile the quarterly measures of growth to the annual values in a process called benchmarking. This process largely preserves the pattern of quarter-on-quarter movements drawn from the quarterly indicator series but scales the series to match the level of the annual benchmark. Further information on the range of revisions to annual national accounts statistics can be found in 2020 national accounts improvements preview. New updated data weights The availability of updated annual data allows us to update the weights that we use to aggregate lower-level components to higher-level estimates of activity. This ensures that our estimates of economic activity reflect structural changes in the economy over time. Previously published growth rates compiled from lower-level series can therefore change as a result of incorporating updated weights. For components of GDP(P) our latest annual data and weights are for the year ended March 2019. These weights apply from the June 2019 quarter onwards. For components of GDP(E) our latest annual data and weights are for the year ended March 2020. These weights apply from the June 2020 quarter onwards. Further information can be found in Improvements to gross domestic product. 2018 Census data Newly available data from the 2018 Census of Population and Dwellings has been incorporated. The new census figures showed a higher value of rental services. This caused significant upward revisions in industry production of rental and owner-occupied properties, with revisions back to 2013 and 2007, and consumption of these rental services by households, with revisions going back to 2014. 2019 Household Expenditure Survey (HES) results New figures taken from the 2019 Household Expenditure Survey resulted in downward revisions to residential maintenance expenditure. Newly available figures from the 2018 Census and housing maintenance costs sourced from the 2019 HES revised the economic production of residential rental services from 2007 and housing services in household consumption expenditure from 2014. Further information can be found in Improvements to gross domestic product. Implementing updated quarterly methodologies We have updated the quarterly methodology for a number of series in GDP(P) to use data from the business financial collection (previously published on our experimental webpage as the business data collection (BDC)). The method changes apply from the March 2007 year onwards in most cases and impacts on the following sub-industries: rental, hiring, and real estate services rental and hiring services business services advertising, market research, and management services (from June 2011 onwards) computer system design and related services arts, recreation, and other services gambling activities. Further information can be found in Improvements to gross domestic product. Revision of Producer Price Index (PPI) The September 2020 quarter release of Business Price Indexes revised a number of PPI industry indexes back to the June 2020 quarter following the discovery of some errors. These will have impacted on our quarterly volume estimates and growth rates for some industries. See Business Price Indexes for further information. Revisions due to updated indicator data We received updated respondent information and other source data, causing minor revisions to: mining – updated data from the Ministry of Business, Innovation & Employment and updated Employment Monthly Survey (EMS) data manufacturing – revised data from Quarterly Manufacturing Survey (QMS) data. electricity, gas, water and waste services – new and updated Linked Employer-Employee Data. wholesale trade – revised PPI 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. central government administration, defence, and public safety – updated EMS and other input data. Revisions table The following table shows previously published and revised quarterly movements for the March 2012–June 2020 quarters’ GDP and expenditure on GDP (GDE). There were also some revisions to earlier quarters, but these were generally less material. Previously published and revised quarterly movements Gross domestic product Gross domestic expenditure Percentage change from previous quarter Quarter Previously published Revised 17 Dec 2020 Previously published Revised 17 Dec 2020 March 2012 0.9 0.6 0.1 0.1 June 2012 0.3 0.3 0.7 0.7 September 2012 0.1 0.2 0.5 0.5 December 2012 1.4 1.6 1 1.1 March 2013 0 -0.3 0.6 0.6 June 2013 0.9 1.2 -0.2 -0.2 September 2013 0.7 0.6 0.8 0.9 December 2013 0.2 0.3 0.5 0.6 March 2014 1.4 1.5 1.1 1.1 June 2014 0.5 0.6 0.5 0.6 September 2014 1.2 1.3 1.2 1.3 December 2014 1.5 1.6 1.3 1.3 March 2015 0.3 0.3 0.6 0.6 June 2015 0.8 0.7 0.9 0.9 September 2015 1 1 1.5 1.6 December 2015 1 1.1 1 1 March 2016 1.2 1.2 1.1 1.1 June 2016 1 0.9 1 1 September 2016 0.9 0.9 0.7 0.7 December 2016 0.3 0.4 0.6 0.5 March 2017 0.8 1.1 0.9 1 June 2017 1.1 1.1 1.4 1.5 September 2017 0.7 0.9 1.1 1.2 December 2017 0.7 0.9 0.9 1.2 March 2018 0.7 0.7 0.5 0.9 June 2018 1 1.1 0.9 1.4 September 2018 0.5 0.2 0.4 0.6 December 2018 1 1.1 0.9 1 March 2019 0.4 0.4 0.6 0.9 June 2019 0.1 0.4 0.2 0.3 September 2019 0.7 0.7 0.6 0.7 December 2019 0.5 0.1 0.3 0.2 March 2020 -1.4 -1.2 -1.3 -0.9 June 2020 -12.2 -11 -9.8 -9.5 Source: Stats NZ The following table shows previously published and revised quarterly movements for the March 2010–June 2020 quarters’ GDP per capita and RGNDI per capita. There were also some revisions to earlier quarters, but these were generally less material. Previously published and revised quarterly movements GDP per capita RGNDI per capita Percentage change from previous quarter Quarter Previously published Revised 17 Dec 2020 Previously published Revised 17 Dec 2020 March 2010 -0.1 0 5.1 5.4 June 2010 0.6 0.5 -0.9 -1.1 September 2010 -0.5 -0.4 0.1 0.1 December 2010 -0.7 -0.8 -0.6 -0.7 March 2011 0.7 0.9 0.8 1.1 June 2011 0.6 0.4 1.6 1.3 September 2011 0.9 1 0.4 0.5 December 2011 0.2 0.4 0.2 0.2 March 2012 0.7 0.4 0.3 0 June 2012 0.2 0.2 -0.7 -0.7 September 2012 0 0.1 0.5 0.7 December 2012 1.2 1.4 1.2 1.3 March 2013 -0.2 -0.6 -0.2 -0.5 June 2013 0.7 1 2 2.3 September 2013 0.5 0.3 1.8 1.6 December 2013 -0.1 -0.1 1.4 1.3 March 2014 1 1 1.1 1.2 June 2014 0.1 0.1 -0.4 -0.4 September 2014 0.9 0.8 0.5 0.5 December 2014 1 1 -0.6 -0.6 March 2015 -0.2 -0.2 0.5 0.4 June 2015 0.4 0.2 0.8 0.6 September 2015 0.5 0.6 0.6 0.6 December 2015 0.4 0.5 -0.7 -0.7 March 2016 0.6 0.5 2.4 2.3 June 2016 0.5 0.3 0.1 0 September 2016 0.5 0.4 0.2 0.1 December 2016 -0.2 -0.2 1.2 1.2 March 2017 0.2 0.5 -0.5 -0.3 June 2017 0.6 0.6 1.2 1.2 September 2017 0.4 0.5 0 0.1 December 2017 0.2 0.4 0.8 0.8 March 2018 0.3 0.2 0 -0.1 June 2018 0.7 0.7 0.4 0.5 September 2018 0.2 -0.1 0.6 0.4 December 2018 0.6 0.7 -0.3 -0.3 March 2019 0 0 0.2 0.2 June 2019 -0.2 0 0.2 0.5 September 2019 0.3 0.3 1.2 1.3 December 2019 -0.1 -0.5 0.8 0.2 March 2020 -2.1 -2 -1.9 -1.6 June 2020 -12.6 -11.5 -12.7 -11.5 Source: Stats NZ en-NZ