Constructing Scottish quarterly GDP estimates – income based

Sandy Stewart

OCEA

7 May 2009

Starting point

• UK Regional Accounts– Annual– 1987 – 2006 (balanced to blue book)– 2007 (unbalanced – i.e. statistical discrepancy)– NUTS1 countries and regions + extra regio– Income components– SIC codes (A01, A02, B, CA, CB, DA, DB, DC, DD, DE, DF, DG,

DH, DI, DJ, DK, DL, DM, DN, E, F, G, H, I, J, K, L, M, N, O, P)– Raw & Headline (Smoothed)

• UK National Accounts– UK Economic Accounts – quarterly– UK Blue Book – annual balances

Income Components - 2006

• Compensation of Employees– 62.7%• Mixed Income - 5.8%• Gross Trading Profits - 20.8%• Holding Gains - -0.4%• NMCC - 1.5%• Rental Income - 8.2%• Taxes less Subsidies - 1.5%• Total - 100.0%

UK apportionment 1.Compensation of Employees

• Employment (STES) x Earnings (ASHE)• STES

– Quarterly– MFT FFT MPT FPT– SIC (AB, C, D, E, F, G, H, I, J, K, L, M, N, O, P, DA, DL)– ABI1 (more detail but 2007 latest and annual)– Other data from DASA, DEFRA/SG, PAYE for constraining to NUTS1

• ASHE– Annual– MFT FFT MPT FPT– SIC (A01, A02, B, CA, CB, DA, DB, DC, DD, DE, DF, DG, DH, DI, DJ,

DK, DL, DM, DN, E, F, G, H, I, J, K, L, M, N, O, P)– 2008 (latest, but definitional changes over time)– Northern Ireland issues

UK apportionment 2.

Mixed Income• Regional data from HMRC (as in Regional Accounts) –

only available annually• DEFRA/SG• ABI2 – for manufacturing• Balancing item

Gross Trading Profits/Operating Surpluses• ABI2 for certain industries• Employment proxies otherwise• GERS analysis for Public Corporations

UK apportionment 3.

Holding Gains• ABI2 for certain industries• Employment proxies otherwise

NMCC• Regional Accounts methodologies• More investigation required for sectoral

components (hospital beds etc)• Use of actual data on depreciation - WGA

UK apportionment 4.

Rental Income• Consider house prices (CLG, Nationwide, HBOS)• GERS analysis for Public Corporations

Taxes less Subsidies (on production)• GERS (annual) and SNAP (quarterly) analysis for taxes• DVLA for vehicle duties (corporations)• SG/CLG – for distribution of NNDR• Subsidies – own data for CAP, ESF, LG – otherwise

GVA apportionment

Compensation of Employees - Step Changes

9000

10000

11000

12000

13000

14000

15000

16000

17000

1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4

1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008

Year & quarter

£ m

illi

on

STESxASHE

Reg Acc CoE

Other alignment issues

• Statistical discrepancies– Aligning income-based estimates to output-

based estimates for unbalanced years– Apportioning UK SD to Scotland

• Alignment Adjustments– Preserving quarterly output patterns– Sum to zero over a year

Issues for discussion

• Any views on data sources?• How to avoid step changes – ASHE cubic

splining• Whether to constrain components to

Regional Accounts • Treatment of statistical discrepancies and

alignment adjustments• When to seasonally adjust in the process• Publication as experimental statistics