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Statistical bulletin: Quarterly National Accounts, Q3 2013 This product is designated as National Statistics

Released: 20 December 2013 Download PDF

Key findings

  • UK gross domestic product (GDP) in volume terms was estimated to have increased by 0.8% between Q2 2013 and Q3 2013, unrevised from the Second Estimate of GDP published 27 November 2013.
  • GDP in volume terms increased by 1.9% when comparing Q3 2013 with Q3 2012, revised up 0.4 percentage points from the previously estimated 1.5% increase.
  • Later data for expenditure, in particular household final consumption expenditure, has led to upward revisions for GDP since Q1 2012. As a result, between 2011 and 2012, GDP in volume terms rose by 0.3%, an upwards revision of 0.2 percentage points from the previously published 0.1% increase.
  • GDP in current prices was estimated to have increased by 1.4% between Q2 2013 and Q3 2013, revised down 0.3 percentage points from the estimate published 27 November 2013.
  • In Q3 2013 GDP in volume terms was estimated to be 2.0% below the peak in Q1 2008, as compared with 2.5% below this peak as previously estimated. From peak to trough in 2009, the economy shrank by 7.2%.

What is GDP?

GDP is an estimate of total economic activity in the UK. It is constructed by balancing the estimates from the output, income and expenditure approaches to measuring GDP which in theory are all equal. For more information on how GDP is balanced see ‘Balancing GDP’ in the background notes section of this release.

Data in this release, unless otherwise stated, will have been seasonally adjusted (SA) with seasonal effects removed to allow comparisons over time. Estimates are given in chained volume measures (CVM), sometimes known as real terms, with the effects of inflation removed, or current prices (CP), sometimes known as nominal terms, without any adjustment for inflation.

Growth for GDP and its components is given between different periods. Latest year on previous year gives the annual growth between one calendar year and the previous. Latest quarter on previous quarter growth gives growth between one quarter and the quarter immediately before it. Latest quarter on corresponding quarter of previous year shows the growth between one quarter and the same quarter a year ago.

This bulletin contains information on the third estimate of GDP for Q3 2013. It includes revisions to and more detail on the output, expenditure and income approaches to GDP. Also included are data on the institutional sector accounts, including the households’ saving ratio and real household disposable income. In line with national accounts revisions policy, the earliest period open for revision is Q1 2012.

Headline sector accounts, GDP and selected components

Table 1: Q3 2013

          Gross Domestic Product
  Households' saving ratio Real households' disposable income Current market prices Chained volume measure Chained volume measure
           
  % %1 2010=100 2010=100 %1
Seasonally           
adjusted
Q3 2011 6.4 -0.3 104.5 101.5 0.6
Q4 2011 7.1 0.5 104.3 101.4 -0.1
Q1 2012 7.9 1.2 105.0 101.3 0.0
Q2 2012 7.9 1.6 104.4 100.9 -0.4
Q3 2012 7.8 -0.4 105.5 101.7 0.8
Q4 2012 5.2 -1.3 107.0 101.6 -0.1
Q1 2013 3.6 -1.7 108.1 102.1 0.5
Q2 2013 6.2 3.0 108.8 102.9 0.8
Q3 2013 5.4 0.4 110.3 103.7 0.8

Table source: Office for National Statistics

Table notes:

  1. Percentage change on previous quarter.

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Historical context

Figure 1: Quarterly levels of GDP, table A2

chained volume measure, seasonally adjusted

Figure 1: Quarterly levels of GDP, table A2
Source: Office for National Statistics

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Figure 1 shows the quarterly level of GDP over the past 25 years and shows how GDP in the UK grew steadily from 2000 until early-2008, when a financial market shock in 2007 affected UK and global economic growth. Over this eight-year period, services output grew steadily, while production output was broadly flat. UK construction activity grew strongly at the start of the period before a slight fall in 2005 and 2006. Construction activity then recovered so that it was around 20% higher at the end of 2007 compared with the start of 2001. The deterioration in economic conditions during 2008 had a large effect on the construction and production industries, but the effect on the service industries was less pronounced.

Coming out of the economic downturn in 2008-09, the rate of GDP growth has been slower compared with the early-2000s, owing to weaknesses in the domestic and global markets. Service industries output has continued to grow steadily from 2009, and activity in these industries is now approximately at the level previously seen in early 2008. Production industries output began to decrease from the start of 2011 following a mild recovery in 2010, as increased inflation and slower wage growth began to reduce households’ real income. Compounding this subdued domestic demand was the development of the euro area sovereign debt crisis, which affected business sentiment in the EU, a key export market for the UK. Construction activity saw a more marked increase than that of production in 2010. However, despite the positive signs during 2010, construction has trended downwards from late 2011.

Figure 2 shows quarterly GDP chained volume measure growth between Q1 1988 and Q3 2013.

Figure 2: Quarterly GDP growth, table A2

chained volume measure, seasonally adjusted

Figure 2: Quarterly GDP growth, table A2
Source: Office for National Statistics

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GDP analysed by output categories, chained volume measures, tables B1 and B2

Annex A (38.5 Kb Excel sheet) contains growth rates back to Q1 2012.

The 0.8% increase in output between Q2 2013 and Q3 2013 was broadly based, with all three major industry groups – services, production and construction - making positive contributions.

Output of the agriculture, forestry & fishing industries fell by 3.2% in Q3 2013, revised down from the previously estimated 1.4% decrease. This follows an increase of 1.9% in Q2 2013.

Total production output grew by 0.6% in Q3 2013 compared with Q2 2013. Electricity, gas, steam & air production was the only industry to decrease in this period, falling by 5.9%. When comparing Q3 2013 with Q3 2012, production output fell by 0.1%. Water supply & sewerage was the only production industry to grow in the same period, increasing by 7.6%.

Manufacturing output increased by 0.8% between Q2 2013 and Q3 2013 revised down 0.1 percentage points from the previous estimate (see Figure 3). Between Q1 2013 and Q2 2013 manufacturing output also rose by 0.8%.

Figure 3: Manufacturing growth, quarter on quarter

chained volume measure, seasonally adjusted

Figure 3: Manufacturing growth, quarter on quarter
Source: Office for National Statistics

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Construction output rose by 2.6% in Q3 2013, revised up from the previously estimated 1.7% increase and follows another 2.6% increase in the previous quarter. When compared with Q3 2012, construction output increased by 6.3%.

The service industries grew by 0.8% in Q3 2013, revised up from the previously estimated 0.7% increase (see Figure 4) following an increase of 0.6% in Q2 2013. Transport, storage & communications was the only services industry to see output fall over the quarter, by 0.2%. Service industries output has increased in every quarter compared with the same quarter a year ago since Q2 2010. Government & other services was the only services industry to have decreased between Q3 2012 and Q3 2013.

Figure 4: Services growth, quarter on quarter

chained volume measure, seasonally adjusted

Figure 4: Services growth, quarter on quarter
Source: Office for National Statistics

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Output of the distribution, hotels & restaurants industries rose by 1.1% in Q3 2013, unrevised from the previous estimate. The 1.1% increase in the latest quarter was largely due to increases in retail trade, except of motor vehicles & motorcycles and wholesale & retail trade & repair of motor vehicles & motorcycles. In Q2 2013 distribution, hotels & restaurants industries output increased by 1.8%.

Output of the transport, storage & communication industries fell by 0.2% in Q3 2013 following no change in Q2 2013. The largest downward contribution to growth in Q3 2013 came from telecommunications.

Business services & finance industries output rose by 1.2% in Q3 2013, revised up from the previously estimated 1.1% increase. The increase in Q3 2013 was mainly due to architectural & engineering activities, technical testing & analysis. In Q2 2013 business services & finance output rose by 0.7%.

Output of government & other services rose by 0.4% in Q3 2013, unrevised from the previous estimate, following no change in Q2 2013. The positive growth in Q3 2013 was mainly due to human health activities.

Further detail on the service industries lower level components can be found in the Index of Services statistical bulletin published on the same day as this release.

Gross value added excluding oil & gas extraction rose by 0.8% in Q3 2013. In Q2 2013 gross value added excluding oil & gas extraction also rose by 0.8%.   

GDP analysed by expenditure categories, chained volume measures, table C2

Annex B (25 Kb Excel sheet) contains growth rates back to Q1 2012.

Gross domestic expenditure (the sum of all expenditure by UK residents on goods and services which are not used up or transformed in a productive process) rose by 1.9% in Q3 2013, following a 0.6% increase in Q2 2013.

Household final consumption expenditure rose by 0.8% in Q3 2013, unrevised from the previous estimate and has increased for eight consecutive quarters (see Figure 5). The largest increases in household final consumption expenditure in Q3 2013 came from operation of vehicles; food & non alcoholic drink; clothing & footwear and recreation & culture. Household final consumption expenditure when compared with the same quarter a year ago has been rising each quarter since Q1 2012 and was 2.5% higher in Q3 2013 than in the same period a year ago. The growth in household consumption may reflect improving economic conditions over the year to date that would be supportive of this growth.

Figure 5: Household final consumption expenditure growth, quarter on quarter

chained volume measure, seasonally adjusted

Figure 5: Household final consumption expenditure growth, quarter on quarter
Source: Office for National Statistics

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General government final consumption expenditure increased by 0.7% in Q3 2013 revised up from the previously estimated 0.5% increase and follows an increase of 1.1% in Q2 2013.

Non-profit institutions serving households (NPISH) final consumption expenditure rose by 2.1% in Q3 2013, revised up from the previously estimated 1.2% increase.

Gross fixed capital formation (the purchase and disposal of fixed assets used in the production process for more than a year) increased by 1.5% in Q3 2013 (see Figure 6) revised up from the previously estimated 1.4% increase and follows an increase of 1.7% in Q2 2013. Within gross fixed capital formation, business investment increased by 2.0% in Q3 2013 following a decrease of 2.3% in Q2 2013. Between Q2 2013 and Q3 2013, general government investment fell slightly, by 0.2%. More detail on gross fixed capital formation is available in the Business Investment statistical bulletin published on the same day as this release.

Figure 6: Gross fixed capital formation growth, quarter on quarter

chained volume measure, seasonally adjusted

Figure 6: Gross fixed capital formation growth, quarter on quarter
Source: Office for National Statistics

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Including the alignment adjustment, the level of inventories increased by £6.0 billion in Q3 2013, following an increase of £2.2 billion in Q2 2013. Excluding the alignment adjustment, the level of inventories rose by £4.4 billion in Q3 2013, following an increase of £2.5 billion in Q2 2013.

The deficit in net trade more than doubled between Q2 and Q3 2013 from £4.2 billion to £8.7 billion. The trade position reflects exports minus imports. The increase in the trade deficit for Q3 2013 was due to a fall in the export of goods which fell by 4.9% following a 5.0% increase in Q2 2013. However, a 1.3% increase in the import of goods in Q3 2013 contributed to an overall 0.7% increase in imports which increased the trade deficit even further (see Figure 7).

Figure 7: Net trade

chained volume measure, seasonally adjusted

Figure 7: Net trade
Source: Office for National Statistics

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GDP implied deflator

Annex D (35.5 Kb Excel sheet) contains growth rates back to Q1 2012.

The gross domestic product implied deflator at market prices for Q3 2013 is 2.6% above the same quarter of 2012 (see Figure 8). Positive growth in the implied deflator in Q3 2013 is due to increases in the household and non-profit institutions serving households final consumption expenditure implied deflator. The GDP implied deflator is calculated by dividing current price (nominal) GDP by chained volume (real) GDP and multiplying by one hundred to convert to an index. It is not used in the calculation of GDP; the deflators for expenditure components, which are the basis for the implied GDP deflator, are used to calculate nominal GDP not real GDP.

Figure 8: GDP at market prices implied deflator, quarter on same quarter of previous year

seasonally adjusted

Figure 8: GDP at market prices implied deflator, quarter on same quarter of previous year
Source: Office for National Statistics

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GDP analysed by income categories at current prices, table D

Annex C (29.5 Kb Excel sheet) contains growth rates back to Q1 2012.

GDP at current market prices rose by 1.4% in Q3 2013. In Q2 2013, GDP at current market prices rose by 0.6%.

Compensation of employees – which includes both wages & salaries and pension contributions -  increased by 0.2% in Q3 2013, revised down from the previously estimated 0.4% increase, and follows an increase of  2.8% in Q2 2013 (see Figure 9). The large increase in Q2 2013 partly reflects unusually high bonus payments in April 2013.

Figure 9: Compensation of employees growth, quarter on quarter

current prices, seasonally adjusted

Figure 9: Compensation of employees growth, quarter on quarter
Source: Office for National Statistics

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The gross operating surplus of corporations – effectively the profits of companies operating within the UK – including the alignment adjustment, rose by 3.8% in Q3 2013 compared with the previous quarter and has been revised down from the previously estimated 5.2% increase. This follows a decrease of 6.6% in Q2 2013 (see Figure 10). Private non-financial corporations’ operating surplus on an aligned basis rose by 3.6% in Q3 2013 following a decrease of 5.9% in Q2 2013 and rose by 3.2% on an unaligned basis in Q3 2013 following a decrease of 6.0% in Q2 2013. Public non-financial corporations was the only component of gross operating surplus to fall over the third quarter, by 3.0%.

Figure 10: Gross operating surplus of corporations growth, quarter on quarter

current prices, seasonally adjusted

Figure 10: Gross operating surplus of corporations growth, quarter on quarter
Source: Office for National Statistics

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Taxes less subsidies on products and production rose by 3.9% in Q3 2013, following an increase of 0.5% in Q2 2013. 

Sector Accounts, tables I, J1, J2, J3, K1 and K2

Summary

Annually for 2012, the central government, local government and financial corporations sectors were net borrowers. Public corporations, private non-financial corporations, households’ and the rest of the world sectors were net lenders (see Figure 11).

In Q3 2013, the households’ and central and local government sectors were net borrowers. The public corporations, financial corporations, private non-financial corporations and rest of the world sectors were net lenders.

Compared with the previous quarter, there has been a switch to net lending in the financial corporations sector and a switch to net borrowing in the local government and households’ sector. All other sectors remain unchanged.

See table I for further detail.

Figure 11: Net lending (+)/ net borrowing (-) by sector

current prices, seasonally adjusted

Figure 11: Net lending (+)/ net borrowing (-) by sector
Source: Office for National Statistics

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The household and non- profit institutions serving households (NPISH) sector, tables J1, J2 and J3

Saving ratio:

Annually for 2012, the saving ratio was 7.2% compared with 6.7% in 2011.

The saving ratio in Q3 2013 was 5.4%, down from 6.2% in the previous quarter. This decrease was due to a rise in household final consumption (see Figure 12).

What is the saving ratio?

The saving ratio estimates the amount of money households have available to save (known as gross saving) as a percentage of their total disposable income (known as total available households’ resources), both of which can be found on table J3 of the Quarterly National Accounts (QNA) release.

Gross saving estimates the difference between households’ total available resources (mainly wages received, revenue of the self-employed, social benefits and net income such as interest on savings and dividends from shares but excluding taxes on income and wealth) and their current consumption (expenditure on goods and services).

All of the components that make up gross saving and total available resources, and in fact all sector accounts data apart from real household disposable income (RHDI), are estimated in current prices (CP), sometimes known as nominal prices, meaning that they include the effects of price changes.

The saving ratio is published in both non-seasonally (NSA) and seasonally adjusted (SA) formats with the latter removing seasonal effects to allow comparisons over time. However, the saving ratio can be volatile and is sensitive to even relatively small movements to its components, particularly on a quarterly basis, as saving is a small difference between two numbers. It is therefore often revised at successive publications when new or updated data are included.

Figure 12: Households' saving ratio

current prices, seasonally adjusted

Figure 12: Households' saving ratio
Source: Office for National Statistics

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Real household disposable income:

For the year 2012, real household disposable income increased by 2.3% following a fall of 1.2% in 2011. This reflects a rise in nominal gross disposable income of 4.9% offset by a rise of 2.6% in the household and NPISH final consumption deflator. This increase in nominal gross disposable income was due to rises in the compensation of employees, social benefits other than transfers in kind and gross operating surplus & mixed income.

The level of real household disposable income increased by 0.4% in Q3 2013 following a rise of 3.0% in the previous quarter (see Figure 13). This increase in the latest quarter is due to a 1.2% rise in nominal gross disposable income offset by an increase of 0.9% in the household and NPISH final consumption expenditure deflator.

Figure 13: Real households' disposable income, quarter on quarter

chained volume measure, seasonally adjusted

Figure 13: Real households' disposable income, quarter on quarter
Source: Office for National Statistics

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What is household disposable income?

There are two measures of household income, in real terms or in current prices (or nominal as it is often called), and both of these time series can be found in table J2 of this release.

Gross household disposable income (GDI) is the estimate of the total amount of money from income that households have available from wages received, revenue of the self-employed, social benefits and net income (such as interest on savings and dividends from shares) less taxes on income and wealth. All the components that make up GDI are estimated in current prices. 

However, by adjusting gross disposable income to remove the effects of inflation, we are able to estimate another useful measure of disposable income called real. This is a measure of real purchasing power of household incomes in terms of the physical quantity of goods and services they would be able to purchase. We use the household expenditure deflator (which can be found in table J2 of this release) to remove the effects of price inflation.

Private non-financial corporations sector, tables K1 and K2

Net lending of private non-financial corporations was £4.3 billion in Q3 2013 following net lending of £15.6 billion in the previous quarter. This decrease in net lending in the latest quarter was due to a fall in net property income of £8.1 billion and a rise in gross capital formation of £4.9 billion, partially offset by a rise in gross operating surplus of £2.4 billion.

For the year 2012, net lending was £29.7 billion following net lending of £56.3 billion in 2011, this decrease was due to a fall in net property income.

International comparisons for Q3 2013

In Q3 2013, GDP grew by 0.1% quarter on quarter in the euro area, while the European Union (EU 28) (see Figure 14) saw quarterly growth for Q3 2013 at 0.2%. In Q2 2013, GDP increased by 0.3% in the euro area and by 0.4% for the EU 28.

When comparing growth between Q3 2013 and Q3 2012, GDP in the euro area fell by 0.4%, while increasing by 0.1% in the EU28. In Q2 2013, there was a 0.6% contraction for the euro area and a 0.1% contraction for the EU28. These are based upon the second estimates of GDP for Q3 2013 published by Eurostat, the statistical office of the European Union. 

GDP for the United States of America increased by 0.9% in Q3 2013 according to their latest estimate, revised upwards from a 0.7% increase in the advanced estimate. This follows an increase of 0.6% in Q2 2013.  Although the initial estimate for Japan suggested that GDP increased by 0.5% compared with the previous quarter, the positive growth rate has now been revised down to 0.3%, after increasing by 0.9% in Q2 2013.

When compared with the same quarter a year ago, GDP for the United States of America rose by 1.8%, an improvement on the 1.6% increase in Q2 2013. GDP for Japan meanwhile increased by 2.4% in Q3 2013 when compared with Q3 2012, up from the 1.2% increase in the previous quarter.

More detailed information on these estimates can be found on the Eurostat website. Information on the estimates for the United States of America can be found on the Bureau of Economic Analysis website while information on the estimates for Japan can be found on the Japanese Cabinet Office website.  

Figure 14: International GDP growth rates, quarter on quarter

chained volume measure, seasonally adjusted

Figure 14: International GDP growth rates, quarter on quarter
Source: Office for National Statistics

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GDP quarterly revisions

GDP and components, previously published on 27 November 2013

The earliest period open for revision in this release is Q1 2012 (see Figure 15).

Figure 15: Gross domestic product, quarter on quarter

chained volume measure, seasonally adjusted

Figure 15: Gross domestic product, quarter on quarter
Source: Office for National Statistics

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The inclusion of later data from administrative and survey sources such as the Monthly Business Survey, Living Cost and Food Survey, Quarterly Capital Expenditure Inquiry and Quarterly Stocks Inquiry has led to upward revisions for GDP since Q1 2012. As a result, between 2011 and 2012, GDP in volume terms rose by 0.3%, an upwards revision of 0.2 percentage points from the previously published 0.1% increase.

Detailed revisions for the three GDP approaches are shown in the annexes listed.

Output components:

Output revisions are shown in Annex E (41 Kb Excel sheet) of this release.

Expenditure components:

Expenditure revisions are shown in Annex F (37 Kb Excel sheet) of this release.

Income components:

Income revisions are shown in Annex G (32 Kb Excel sheet) of this release.

Sector accounts revisions, previously published 26 September 2013

Sector accounts revisions are shown in Annex H (37 Kb Excel sheet) of this release.

Background notes

  1. Release policy

    This release includes data available up to 10 December 2013. Data are consistent with the current price trade in goods data within the UK Trade statistical bulletin published on 10 December 2013 and the Index of Production statistical bulletin also published on 10 December 2013.

  2. Release content and context

    This release includes the third estimate of GDP. Data content for each successive release of GDP varies according to availability.

    The Preliminary Estimate of GDP is based on output data alone. These are based on survey estimates for the first two months of the quarter with estimates for the third month of the quarter based on forecasts using early returns from businesses. Other (non-survey based) data used in the compilation of the output approach are also based on forecasts.

    For the Second Estimate of GDP output estimates based on survey data are available for all three months of the quarter, in addition to other significant data sources. Estimates of the expenditure and income approaches to measuring GDP are also available in this release based on a combination of limited survey data, other data sources and forecasts.

    For the Quarterly National Accounts (QNA) release, output survey data are available for all three months of the quarter, along with most other data sources. For the expenditure and income approaches to measuring GDP, more extensive survey data are available, in addition to other data sources and a more limited use of forecasts.

    After this release, the current quarter will be subject to revision in accordance with National Accounts revisions policy as further data, annual benchmarks and methodological improvements are implemented.

    For more information on the different estimates of GDP, ONS has released a video explaining these differences

  3. Forthcoming changes

    To allow sufficient time to prepare for the major changes in Blue Book 2014, ONS has decided to change the approach to quarterly national accounts for Q2 2014. A preliminary estimate, based only on output data, will be published as normal in July. Then in August, this output-based estimate will be updated. This will supplement the July Preliminary GDP estimate by replacing the third month of forecast data for the Index of Production (IoP), the Index of Services (IoS) and the monthly construction output survey with actual data. The publication date for this output based estimate has also moved from the previously announced date to 15 August 2014.

     There will be no published information on the income or expenditure components in the second quarter until the Quarterly National Accounts release on 30 September 2014.

  4. Special events in 2012

    The Diamond Jubilee and the London 2012 Olympic and Paralympic Games made 2012 an unusual and difficult year for policymakers and anybody interested in understanding the behaviour of the UK economy. ONS designated both events as ‘special events’ under the ONS Special Events policy as they had a potentially significant effect on many key economic statistics. An article published by ONS on 17 May 2013 took a retrospective look at each event and considered the impact on a range of published economic indicators, including GDP.

  5. National accounts methodology and articles

    ONS regularly publishes methodology information and articles to give users more detailed information on developments within the National Accounts; supplementary analyses of data to help users with the interpretation of statistics and guidance on the methodology used to produce the National Accounts.

    ONS has produced an article 'Interpreting the Recent Behaviour of the Economy' available on the ONS website to aid interpretation of movements in the economy.

    An article summarising the upcoming improvements to the estimation of gross fixed capital formation and changes in inventories is now available on the ONS National Accounts methodology and articles web pages. These developments are part of the programme of continuous improvement to the UK National Accounts. 

  6. National accounts classifications decisions

    The UK National Accounts are produced under internationally agreed guidance and rules set out principally in the European System of Accounts 1995 (ESA 95) and the accompanying Manual on Government Debt and Deficit (MGDD).

     In the UK the Office for National Statistics (ONS) is responsible for the application and interpretation of these rules. ONS therefore makes classification decisions based upon the agreed guidance and rules and these are published on the ONS website. 

  7. Economic context

    ONS publishes a monthly Economic Review discussing the economic background giving economic commentary on the latest GDP estimate and other ONS economic releases. The next article will be published on 8 January 2014. 

  8. Basic quality information for the GDP statistical bulletin

    A Quality and Methodology Information report (197.4 Kb Pdf) for this statistical bulletin can be found on the ONS website. 

  9. Key quality issues

    Common pitfalls in interpreting series: Expectations of accuracy and reliability in early estimates are often too high. Revisions are an inevitable consequence of the trade-off between timeliness and accuracy. Early estimates are based on incomplete data.

    Very few statistical revisions arise as a result of ‘errors’ in the popular sense of the word. All estimates, by definition, are subject to statistical ‘error’ but in this context the word refers to the uncertainty inherent in any process or calculation that uses sampling, estimation or modelling. Most revisions reflect either the adoption of new statistical techniques or the incorporation of new information which allows the statistical error of previous estimates to be reduced. Only rarely are there avoidable ‘errors’ such as human or system failures and such mistakes are made quite clear when they do occur.

  10. Reliability

    Estimates for the most recent quarters are provisional and are subject to revision in the light of updated source information. ONS currently provides an analysis of past revisions (244.6 Kb Pdf) in the GDP and other Statistical Bulletins which present time series.

    ONS has a webpage dedicated to revisions to economic statistics which brings together ONS work on revisions analysis, linking to articles, revisions policies and key documentation from the Statistics Commission's report on revisions.

    Revisions to data provide one indication of the reliability of key indicators. Tables 2 and 3 show summary information on the size and direction of the revisions which have been made to data covering a five-year period. A statistical test has been applied to the average revision to find out if it is statistically significantly different from zero. An asterisk (*) shows if the result of the test is significant.

  11. Revisions to GDP estimates

    Table 2 shows the revisions to month 1 (preliminary) and month 2 (second) estimates of GDP. The analysis of revisions between month 1 and month 2 uses month 2 estimates published from February 2009 (Q4 2008) to November 2013 (Q3 2013). The analysis of revisions between month 2 and month 3 (third estimate of GDP) uses month 3 estimates published from December 2008 (Q3 2008) to September 2013 (Q2 2013).

    Table 2: Revisions to early estimates of GDP growth

    Estimate in latest period Revisions between early estimates of GDP growth (quarterly, CVM)
    Revisions to GDP growth  % Average over the last five years  Average over the last five years without regard to sign (average absolute revision)
           
    Between M1 and M2 0.8 0.04 0.06
    Between M2 and M3 0.8 -0.03 0.09

    Table source: Office for National Statistics

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    Table 3 shows the revisions to GDP growth and the household saving ratio between the estimate published three months after the end of the quarter and the equivalent estimate three years later. The analysis uses month 3 estimates first published from December 2005 (Q3 2005) to September 2010 (Q2 2010) for GDP.

    Table 3: Revisions to month 3 estimates of GDP growth and the household saving ratio

    Estimate in latest period Revisions between first publication and estimates three years later
       (%) Average over the last five years  Average over the last five years without regard to sign (average absolute revision)
           
    GDP growth (quarterly, CVM) 0.8 -0.09 0.40
           
    Household saving ratio 5.4 -0.95 1.21

    Table source: Office for National Statistics

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    Revisions triangles for the main components of GDP from expenditure, output and income approaches and spreadsheets containing revisions triangles (real-time databases) of estimates from 1992 to date and the calculations behind the averages in both tables are available on the ONS website.

    An article titled 'Updated analysis: Why is GDP revised?' (269.9 Kb Pdf) published on 13 June 2013, is available on the ONS' website.

    ONS has also recently published revisions triangles for current price GDP at market prices and for the GDP implied deflator which will be updated on an ongoing basis. Both are available on the ONS website and are the first to be released in an ongoing development programme to improve the coverage of the revisions triangles. 

  12. Balancing GDP

    Information on the methods ONS uses for balancing the output, income and expenditure approaches to measuring GDP can be found on the ONS website.

    The different data content of the three approaches dictates the approach taken in balancing quarterly data.  In the UK, there are far more data available on output than in the other two approaches. However in order to obtain the best estimate of GDP (the published figure) the estimates from all three approaches are reconciled to produce an average.

    Annually, the estimates from all three approaches are reconciled through the creation of Input-Output Supply Use tables for the years for which data are available.

    For years in which there is no Supply Use balance, a Statistical Discrepancy exists  which reflects the differences between the published headline estimate of GDP and the expenditure and income estimates.

    For all periods, the expenditure and income estimates are aligned to the published headline GDP figure.  Although annual data is aligned for balanced years there will still be quarterly differences for balanced and post balanced years, due to timing and data content issues. These are dealt with by means of explicit alignment adjustments which are applied to specific components (gross operating surplus of private non-financial corporations in the income approach and changes in inventories in expenditure) to align the three approaches. As these are purely quarterly discrepancies, the alignments sum to zero over the year and are published explicitly in the GDP statistical bulletins. They are also published as “of which” items within the specific components, to enable users to ascertain the underlying picture.

    The size and direction of the quarterly alignment adjustments in Q3 2013 indicate that in this quarter the levels of both expenditure and income were lower than that of output.

    Alignment adjustments typically have a tolerance of +/-£1,500 million on any quarter. However, in periods where the data sources are particularly difficult to balance, slightly larger alignment adjustments are sometimes needed. 

  13. Further information

    Latest copies of this and other ONS releases are available under Publications on the ONS website. ONS has also produced a short guide to the UK National Accounts (105.5 Kb Pdf) .

    Details of the policy governing the release of new data are available from the media relations office. Also available is a list of names of those given pre-publication access to the contents of this bulletin.

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Statistical contacts

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Media Relations Office +44 (0)845 6041858 Office for National Statistics media.relations@ons.gsi.gov.uk
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