Experimental Quarterly Supply & Use framework for Scotland Andrew Mortimer SNAP team.

Experimental Quarterly Supply & Use framework for Scotland

Andrew MortimerSNAP team

Presentation outline

• Background to the Scottish National Accounts Project (SNAP)

• Purpose of the QSU framework• Brief overview of the methods• Review of some experimental results

implied by the QSUs• Future developments

SNAP: What users want

• More timely short-term indicators• Fewer revisions over time• More coherence between economic statistics• More time-series analysis• Public Sector Finances and National Accounts

for Scotland – related analysis• Onshore – offshore analyses• More modelling work –

social/economic/environmental

SNAP Project Overview

Two main strands:• Building on the annual Input-Output framework

for Scotland to produce more up to date estimates of income, expenditure and production GDP in value terms;

• Use a range of data sources and the quarterly UK National Accounts to produce a range of consistent quarterly economic indicators for Scotland.

“ Achieving coherence is a particularly difficult challenge, and the attempt to improve coherence as more information becomes available is a significant reason for longer-term revisions. Achieving greater coherence within, and between, economic statistics is a bit like trying to do a jigsaw:– without the overall picture on the box to guide you, and– without having all the pieces

“ Indeed not only do you not have the picture, the picture itself changes as we compile it. Bits of the jigsaw are changed until we have a picture which makes economic sense.”

Karen Dunnell, National StatisticianMeasuring the UK economy 2008

Compilation of QSUs – Data prep.• Current version uses the source data

underpinning two publications:– 2004 input-output tables and multipliers for Scotland;

and– 2008Q4 release of quarterly GDP at basic prices.

• All data extracted in current prices (NSA).– Simplistic inflation of volume series in current version

• Both sources aggregated to 116 industry / commodity level

Compilation of QSUs – calculations

1. Growth rates in Quarterly output applied to base year (2004) monetary values from Use table.

2. Industry output (basic prices) converted into product output using Supply table

3. Product output (basic prices) used to calculate total supply of products at purchasers’ prices

4. Total final demand calculated as residual of total supply and intermediate demand (step 1)

5. Final demand distributed across sectors using 2004 proportions

EXPERIMENTAL STATISTICS - Estimated Scottish Supply Matrix (aggregate, 2008Q4)

commodity / industry

Agriculture,

forestry &

fishing MiningManufac

turing

Energy and

waterConstru

ction

Distribution &

catering

Transport &

communication

Finance and

business

Public admin etc.

Education,

health and

social work

Other services

Product output @ bp margins

Net product taxes

RoWimp RUKimp

Total supply @ pp

Agriculture, forestry & fishing877 0 0 0 0 0 0 0 0 0 0 877 131 -59 133 149 1,230Mining 1 636 3 0 0 0 0 0 0 0 0 639 26 8 25 224 923Manufacturing 13 6 7,938 0 0 0 0 0 0 0 0 7,957 4,326 1,879 3,394 5,735 23,291Energy and water 0 0 0 1,910 0 0 0 0 0 0 0 1,911 0 87 10 215 2,222Construction 6 2 5 24 3,448 5 40 64 6 0 6 3,606 0 206 4 311 4,127Distribution & catering 8 9 399 15 16 5,637 46 75 0 3 49 6,255 -4,483 319 394 570 3,055Transport & communication 2 9 34 16 1 0 3,880 6 0 0 0 3,948 0 66 363 810 5,187Finance and business 21 13 192 36 27 102 72 13,554 3 8 160 14,187 0 398 598 1,936 17,119Public admin etc. 0 0 0 0 0 0 0 0 3,604 0 0 3,604 0 0 1 6 3,610Education, health and social work0 0 0 0 0 0 0 18 0 5,341 0 5,359 0 33 53 82 5,527Other services 2 0 0 0 0 6 0 2 0 0 2,453 2,463 0 214 186 324 3,187

Gross Output @ bp 929 674 8,572 2,002 3,491 5,750 4,038 13,718 3,613 5,351 2,668 50,806 0 3,150 5,161 10,360 69,477

EXPERIMENTAL STATISTICS - estimated Scottish combined use matrix (Aggregate, 2008Q4)

commodity/ industryAgricultu

re, forestry

& fishing MiningManufact

uring

Energy and

waterConstruc

tion

Distribution &

catering

Transport &

communication

Finance and

business

Public admin

etc.

Education, health

and social work

Other services

Intermediate

demand

Households/NPI

SHGeneral

Govt.

GFCF/valuables/inventorie

sExports_

RUKExports_

RoWTotal

demand

Agriculture, forestry & fishing 161 0 303 0 4 66 0 1 0 3 1 540 279 - 19 264 129 1,230Mining 0 40 373 294 54 2 4 1 1 0 1 770 - - 13 104 36 923Manufacturing 257 88 3,223 172 537 512 382 619 814 483 145 7,232 7,652 - 1,323 4,130 2,954 23,291Energy and water 11 16 327 757 5 36 23 50 40 36 17 1,317 402 - 0 490 12 2,222Construction 15 96 40 28 884 29 55 309 158 21 17 1,651 119 - 1,928 400 29 4,127Distribution & catering 8 9 26 7 22 114 68 140 50 42 20 505 2,352 - 9 161 28 3,055Transport & communication 36 66 236 16 21 458 921 899 151 94 75 2,974 1,343 - 34 670 165 5,187Finance and business 87 157 584 101 351 901 540 4,360 576 293 411 8,360 3,721 - 535 3,556 948 17,119Public admin etc. 1 2 10 1 4 3 19 182 10 0 2 233 44 3,308 25 0 0 3,610Education, health and social work 10 3 19 4 3 14 26 163 89 513 29 873 959 3,475 0 187 34 5,527Other services 7 7 41 6 3 25 41 131 95 47 503 906 1,278 353 66 539 44 3,187Intermediate demand 594 484 5,182 1,386 1,888 2,159 2,077 6,855 1,983 1,532 1,219 25,360 18,148 7,136 3,954 10,500 4,379 69,477

Net prod tax -26 4 62 44 13 164 28 69 0 2 28 387CoE 138 158 2,264 186 948 2,258 1,319 3,189 1,252 3,405 839 15,956GOS 223 28 1,064 385 642 1,169 615 3,605 379 412 581 9,103GVA 335 189 3,390 615 1,603 3,591 1,961 6,864 1,631 3,819 1,448 25,446

Gross Output @ bp 929 674 8,572 2,002 3,491 5,750 4,038 13,718 3,613 5,351 2,668 50,806

Compilation of QSUs – key points• All relationships essentially fixed:

– Output / GVA / Intermediate demand / taxes / final demand / trade

– However, calculations performed at a statistically high resolution

• Only one additional data source being used to “shock” base year S/U tables– QSUs do not stand up to a great deal of scrutiny;– No attempt made to balance supply and demand (QSUs balance

near-automatically)– Very much experimental / Not a National Statistics product

• QSUs do provide: – a framework to allow data-confrontation in the short-term;– Potentially, the fundament of a future Scottish quarterly National

Account

Some Results…

NOTE: EXPERIMENTAL STATISTICS

Comparison of quarterly GDP(i) and implied income from the QSUs – total GVA at current prices.

Comparison of quarterly GDP(i) and implied income from the QSUs – total GVA at current prices.

A01 : Agriculture

agriculture

Wood products

Retail

Comparison of total HHFCE and implied household expenditure from the QSUs.

communications Clothes and shoes

EXPERIMENTAL STATISTICS - estimated Scottish combined use matrix (Aggregate, 2008Q4)

commodity/ industryAgricultu

re, forestry

& fishing MiningManufact

uring

Energy and

waterConstruc

tion

Distribution &

catering

Transport &

communication

Finance and

business

Public admin

etc.

Education, health

and social work

Other services

Intermediate

demand

Households/NPI

SHGeneral

Govt.

GFCF/valuables/inventorie

sExports_

RUKExports_

RoWTotal

demand

Agriculture, forestry & fishing 161 0 303 0 4 66 0 1 0 3 1 540 279 - 19 264 129 1,230Mining 0 40 373 294 54 2 4 1 1 0 1 770 - - 13 104 36 923Manufacturing 257 88 3,223 172 537 512 382 619 814 483 145 7,232 7,652 - 1,323 4,130 2,954 23,291Energy and water 11 16 327 757 5 36 23 50 40 36 17 1,317 402 - 0 490 12 2,222Construction 15 96 40 28 884 29 55 309 158 21 17 1,651 119 - 1,928 400 29 4,127Distribution & catering 8 9 26 7 22 114 68 140 50 42 20 505 2,352 - 9 161 28 3,055Transport & communication 36 66 236 16 21 458 921 899 151 94 75 2,974 1,343 - 34 670 165 5,187Finance and business 87 157 584 101 351 901 540 4,360 576 293 411 8,360 3,721 - 535 3,556 948 17,119Public admin etc. 1 2 10 1 4 3 19 182 10 0 2 233 44 3,308 25 0 0 3,610Education, health and social work 10 3 19 4 3 14 26 163 89 513 29 873 959 3,475 0 187 34 5,527Other services 7 7 41 6 3 25 41 131 95 47 503 906 1,278 353 66 539 44 3,187Intermediate demand 594 484 5,182 1,386 1,888 2,159 2,077 6,855 1,983 1,532 1,219 25,360 18,148 7,136 3,954 10,500 4,379 69,477

Net prod tax -26 4 62 44 13 164 28 69 0 2 28 387CoE 138 158 2,264 186 948 2,258 1,319 3,189 1,252 3,405 839 15,956GOS 223 28 1,064 385 642 1,169 615 3,605 379 412 581 9,103GVA 335 189 3,390 615 1,603 3,591 1,961 6,864 1,631 3,819 1,448 25,446

Gross Output @ bp 929 674 8,572 2,002 3,491 5,750 4,038 13,718 3,613 5,351 2,668 50,806

Developments• Identify more candidate indicators

– Improvements to experimental GDP(I) measure– Quarterly manufactured exports– Product taxes– Others?– Begin trial balances using new indicators

• Longer run series– Constrained to new time-series supply & use tables– Constrained using cubic-splined differences

• Treatment of volume series– Identify suitable deflators– Developed incrementally

• Government Expenditure– Assess COINS as a source

Experimental Quarterly Supply & Use framework for Scotland

Discussion