Quarterly GDP compilation at NBS By Roger Jullion (Statistics Canada) OECD/NBS Workshop on National Accounts Haikou, China December 2009

Quarterly GDP compilation at NBS

By Roger Jullion (Statistics Canada)

OECD/NBS Workshop on National Accounts

Haikou, China

December 2009

23-04-10Statistics Canada • Statistique Canada2

Overview of presentation

Background of Statistics Canada project Progress to date:

• Production based GDP

• Expenditure based GDP

• Reconciling quarterly GDP estimates

• Seasonal adjustment and benchmarking

Looking ahead


Background of Statistics Canada project Statistical Information Management Program (SIMP II) Seven year project, began in 2006 Three sub-projects

• Environment statistics

• Social Statistics

• Economic Statistics

o Business survey componento National accounts component


Background of Statistics Canada project National accounts component (objectives)

• Produce discrete quarterly seasonally adjusted production-based GDP estimates in both current and constant prices and, on a trial basis, quarterly discrete expenditure-based GDP estimates in both current and constant prices

• Reconcile annual and quarterly expenditure-based and production-based GDP such that NBS would eventually be able to publish expenditure-based GDP together with their official production-based GDP estimates

• Build analytical capacity for future improvements of the overall quality of the GDP estimates, both production and expenditure-based.

• Improve the overall quality of the GDP estimates through improvements to methodologies and price deflation


Progress to date We have been working with NBS national accountants for three

years Four visits to NBS by Statistics Canada and one visit to STC by NBS

officials NBS officials will be visiting Canada again this coming spring We have discussed our respective sources and methods and

strategies for analyzing and balancing the accounts Suggested data coherence tools and data confrontation practices

including supply use analysis Discussed revision policy, benchmarking and seasonal adjustment Workshop to enhance communication with data suppliers Three years remaining in the SIMP II project


Progress to date

Production-based GDP• Quarterly discrete estimates by industry have been developed

• A combination of quarterly indicators and the subtraction method have been used to derive the quarterly data

• Quarterly data have been benchmarked to the annual value added estimates and subsequently seasonally adjusted using X12ARIMA

• Nominal and price data are being analyzed by industry


Progress to date Production-based GDP

• Key activities planned over the next three months:

o Re-estimate the ‘industry’ sub-component at the level of 39 industries above the cut-off

o Seasonally adjust the industry sub-sector at the 39 industry groups and then aggregate

o Disaggregate the ‘Others’ industry grouping into the 9 industry sub-sectors using suggested indicators as discussed at our September STC/NBS meeting.


Progress to date Expenditure-based GDP

• NBS has estimated internal trial-based quarterly expenditure-based GDP

• We have discussed improvements to the compilation methods and how the expenditure-based data could be reconciled or compared with the higher quality production-based estimates

• Where data gaps exist in the estimation of production-based GDP, some of the consumption indicators could be used

• Household consumption uses the rural and urban household expenditure surveys

• Rents, financial services compiled in conjunction with production-based GDP estimates


Progress to date Expenditure-based GDP

• STC suggested that the quarterly consumption estimates be estimated at a more detail level

• This would allow for better analysis and more accurate constant price estimates. It would also allow for other data to replace or be compared to the household survey data e.g. motor vehicle sales, services spending

• Government current spending

o Budget vs non-budgetaryo Capital vs current


Progress to date

• Gross fixed capital formation

o Construction output vs capital spending on constructiono Supply use analysis for M&E

• Change in inventories

o Price deflatorso Supply use analysis

• Exports and Imports

o Exchange rate adjustmentso Unit values vs Producer Price Indexes


Progress to date Reconciliation of production-based with expenditure-based

GDP estimates

• Quarterly and annual GDP comparison tables have been prepared

• Inconsistencies between the datasets have been identified

• Data confrontation and data coherence techniques have been discussed

• Alternative compilation methods have been introduced which are narrowing the discrepancies

• Additional issues were identified at the workshop held with national accounts data suppliers


Progress to date

• We have discussed the use of supply use analysis for certain commodities such as vehicles and M&E

• Improvements to price deflators as well as the level at which deflation is carried out has been discussed and NBS is looking at alternative approaches

• Comparisons of implicit prices between production-based and expenditure-based GDP have been prepared such that constant price discrepancies can be decorticated between nominal values and prices

• NBS has made considerable progress on implementing benchmarking and seasonal adjustment techniques


Looking ahead Publishing seasonally adjusted GDP is a priority for NBS

While production-based GDP estimates are the priority, we are working in parallel on improving the quarterly and annual expenditure-based estimates and the reconciliation of the two sets of estimates

We are working with NBS on improving the quarterly discrete GDP estimates, using all available survey and administrative information

We are discussing various data validation and data coherence techniques that we use at Statistics Canada to compile quarterly national accounts


Looking ahead We are working via the Statistics Canada/NBS SIMP II business

survey and household data improvement projects to ensure that national accounts needs and key data gaps are addressed

While we are recommending that China’s GDP estimates should be compiled at a more detail level we recognize the resource constraints within the national accounts group

Compiling and publishing both production-based and expenditure-based GDP quarterly ensures data coherence while meeting policy and analytical requirements

We are discussing revisions and revisions policies (timeliness and data quality tradeoffs)

Documents

Quarterly GDP compilation at NBS By Roger Jullion (Statistics Canada) OECD/NBS Workshop on National Accounts Haikou, China December 2009