National Accounts- Quarterlies September 2023 Data Collection

Gross domestic product: September 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 point in time. 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 September 2023 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 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 has had the effect of subduing 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 the majority of affected series we have stopped applying additive outlier treatment from the September 2022 quarter onwards. As activity returns to more stable patterns – although perhaps different from pre-COVID patterns – there will be a period of greater than usual 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, for the time being. 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) treatment was changed this quarter to align with imports and exports of travel services. 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 the impact of changing additive outlier settings on the separation of trend, seasonal and irregular components 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. https://www.stats.govt.nz/methods/seasonal-adjustment-and-automatic-outliers-in-time-series-after-covid-19/https://www.stats.govt.nz/methods/seasonal-adjustment-and-automatic-outliers-in-time-series-after-covid-19/ Incorporating new annual data The main driver of updates to GDP data for 2021 onwards is the incorporation, for the first time, of balanced annual data for the year ended March 2022. 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 2022 provides the annual benchmarks for GDP(P) up to the year ended March 2022. The release of National accounts (income and expenditure): Year ended March 2023 provides the benchmarks for GDP(E) up to year ended March 2022 and for gross fixed capital formation up to the year ended March 2023. Prior to annual balanced data being available, average annual growth rates are calculated from our quarterly indicators. As our quarterly indicators are mainly single indicator and output based, the incorporation of annual value-added data for selected industries can lead to updates in average annual growth rates. This is because in many cases we are now accounting for changes in intermediate consumption in those industries for the first time, as well as incorporating more detailed and better-quality data measuring output. 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. Improvements to gross domestic product September 2023 quarter has more details on incorporating the latest balanced annual national accounts data. 2023 preview of national accounts improvements has more information on the range of updates to annual national accounts statistics. Not all industries are reconciled to the annual national accounts data, some make use of other annual data sources. See Quarterly gross domestic product: Sources and methods (fifth edition) and Overview of sources and methods for quarterly gross domestic product: Updates and COVID-19 adjustments for an overview of the quarterly and annual methodologies used for GDP(P) and GDP(E). 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 (chain linking). 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 2022. These weights apply from the June 2022 quarter onwards. For components of GDP(E) our latest annual data and weights are for the year ended March 2023. These weights apply from the June 2023 quarter onwards. Changes to weights reflect change in relative price, as measured by implicit price deflators (IPDs). For a small number of subindustries, COVID-19 impacts have made reliable measurement of IPDs impossible, and so we have retained pre-covid weights for use in chain-linking. Corrections to quarterly gross domestic product Correction to unallocated taxes A correction has been made to unallocated taxes in the June 2023 quarter, due to a missing value in input data. This correction should be viewed as provisional until final data can be confirmed. Changes due to updated indicator data 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 September 2022 quarter onwards. This has caused changes to both construction and gross fixed capital formation over the same time period. Value of building work put in place: September 2023 quarter has more information. Incorporating updated International Trade data The International Trade data has been updated in the June 2023 quarter, with significant (greater than + or - 1 percent) revisions to Goods imports International Trade: September 2023 quarter has more information. Updates to the wholesale trade survey (WTS) Updated respondent data in the WTS has led to revisions in wholesale trade and wholesale inventories from December 2022 onwards. 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 Sample rotation began to be introduced to the QES sample design in the March 2023 quarter. This will gradually change all small to medium enterprises (SMEs) selected in the QES over a 2 to 3 year period and may create higher sampling errors for some industry data. Sample rotation in Quarterly Employment Survey has more information 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 September quarter are: Construction Healthcare and social assistance Household consumption expenditure (HCE) 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 – updated exports and stocks Manufacturing – updated Economic survey of manufacturing data Electricity, gas, water and waste services – new and updated Linked Employer-Employee Data (LEED) Transport, postal and warehousing – updated Business Financial Data (BFD) Information, media, and telecommunications – updated administrative data from Inland Revenue Department Finance and Insurance – updated Reserve Bank of New Zealand (RBNZ ) data, and updated Insurance Institute of New Zealand (ISINZ) data Rental, hiring, and real estate services – updated QV data, updated Financial intermediation services indirectly measured (FISIM) data Professional, scientific, technical, administrative and support services – updated Business Financial Data (BFD) Public administration and safety, local government – updated Quarterly Local Authority Survey (QLAS) data Household consumption expenditure – updated travel credits and debits proportions Central government administration, defence, and public safety – updated PAYE payday filing (previously Employers Monthly Schedule (EMS)) and other input data Central Government final consumption expenditure – updated Social assistance benefits in kind (SABIKS) and intermediate consumption data in September 2022 and March 2023 quarters Local government final consumption expenditure – updated QLAS data Gross fixed capital formation – Non-residential buildings, Residential buildings – updated QV data Imports and exports – updated FISIM 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). During the process of incorporating new annual benchmarks, we have reviewed and updated the use of alternative indicators. 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: Fishing, aquaculture, and agriculture, forestry and fishing support services Mining Construction Electricity, gas, water and waste services Retail trade and accommodation Transport, postal and warehousing Information media and telecommunications Business services Public administration and safety Health care and social assistance Arts, recreation, and other services Household consumption expenditure Gross fixed capital formation Implementing updated quarterly methodologies Updates and improvements to GDP production Change to annual indicator education volumes We have incorporated attendance data into our annual volume indicator for school education, dating back to 2011. This has led to mostly downward revisions in annual growth rates for education and training, value added, particularly from 2018 onwards. This change also flows through to constant price central government final consumption expenditure (CGFCE) on compensation of employees. The education subcomponent of compensation of employees is modelled as education and training value added, less consumption of fixed capital. Current price CGFCE is unaffected by these changes. Changes to quarterly indicator for insurance We have made improvements to the way we process insurance premiums data in the financial and insurance services industry under the production measure of GDP, in order that the indicator will better reflect an accrual basis for value added. The changes have also updated the miscellaneous and services components of household consumption expenditure (HCE) under the expenditure measure of GDP. These changes resulted in updated quarterly movements for these series from June 1999 onwards, but since the indicators are reconciled to annual benchmarks there are no changes to year-ended-March annual levels or movements. Change to annual indicator for mining volumes We have identified data quality issues with the existing annual direct volume indicator for other mining and quarrying. As a result, we have moved from a direct volume indicator to deflated current price value added. This affects annual volumes for the mining industry from 2010 onwards. Updates and improvements to GDP expenditure Change to annual indicator CGFCE education volumes See Change to annual indicator education volumes. Changes to quarterly indicator for HCE insurance See Changes to quarterly indicator for insurance. Change to quarterly reflator for new passenger motor cars Our estimate of current price expenditure on passenger motor cars is primarily based on a count of newly registered vehicles reflated by an average price. For new passenger motor cars we have been using an average import price, but are now able to switch to using an average sales price from 2021 onwards (which has been spliced to the prior reflator to avoid a step jump in the series). This affects current and constant price estimates of both household consumption expenditure (transport and durables components) and gross fixed capital formation (transport equipment component). Data updates table The following table shows previously published and updated quarterly movements for the June 2017 – September 2023 quarters’ GDP and expenditure on GDP (GDE). There were also some changes to earlier quarters, but these were less material. Previously published and revised quarterly movements Gross domestic product Gross domestic expenditure Percentage change from previous quarter Quarter Previously published Revised 21 September 2023 Previously published Revised 21 September 2023 June 2017 1.0 0.9 1.4 1.3 September 2017 0.8 0.8 1.0 1.0 December 2017 1.0 1.0 1.3 1.3 March 2018 0.9 0.8 1.0 0.9 June 2018 1.1 1.1 1.3 1.3 September 2018 0.1 0.2 -0.2 -0.1 December 2018 1.5 1.5 1.6 1.5 March 2019 0.8 0.7 0.9 1.0 June 2019 0.4 0.3 0.4 0.4 September 2019 0.7 0.9 0.7 0.9 December 2019 0.8 0.7 0.5 0.3 March 2020 -0.9 -1.2 -0.8 -0.8 June 2020 -10.5 -10.1 -9.9 -9.5 September 2020 13.8 14.1 13.9 13.7 December 2020 0.0 0.0 0.1 0.0 March 2021 2.3 1.8 2.3 2.1 June 2021 1.7 1.3 1.8 1.8 September 2021 -4.1 -3.8 -4.6 -4.3 December 2021 3.6 3.4 2.9 3.0 March 2022 0.1 0.0 0.1 -0.1 June 2022 1.3 1.1 1.7 1.5 September 2022 1.5 1.8 1.5 2.1 December 2022 -0.5 -0.6 -0.7 -1.0 March 2023 0.0 -0.2 -0.2 -0.6 June 2023 0.9 0.5 1.3 0.9 en-NZ