The Office for National Statistics (ONS) has published the first indicative estimates of gross domestic product (GDP) using new systems and sources that will be introduced into headline GDP from the end of September 2019.
The Blue Book figures are calculated using newly- introduced surveys on the costs facing businesses and the products produced by the services sector . These will be processed using the innovative “H-Approach” framework, now seen as international best practice. Significant improvements have also been made to the way “capital assets” – such as buildings and machinery – are measured.
The new H-approach has been used as the framework for headline GDP. However, the price information used to adjust for the effects of inflation are not yet fully consistent across the national accounts . In addition, double deflation has not yet been introduced into these figures for lower- level breakdowns of the economy on manufacturing, services and construction.
The ONS plans to use fully consistent price data and introduce double deflation in next year’s Blue Book, when new price information will become available, as part of the previously announced three -year plan to transform the way national accounts are produced.
The new estimates of GDP show upward revisions to cash GDP levels and growth. The biggest driver to the increase in the level of GDP is significantly improved estimates of how long capital assets – such as buildings, computers and machinery – can be used for.
The average revision to cash and real GDP growth is approximately positive 0.1 percentage points per year between 1997 and 2016.
Commenting on these improvements, Head of GDP Rob Kent-Smith said:
“The new figures published today are an important milestone in our transformation plans. With these new sources and methods ONS is now producing significantly improved estimates of headline GDP.
“Next year the introduction of fully consistent price data will allow us to double deflate these statistics.”
Background note:
- More information about these improvements and their impacts are available in the National Accounts articles: Blue Book 2019 indicative impacts on GDP current price and chained volume measure estimates: 1997 to 2016 article published today.
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