MNI: New UK GDP Publication Model to Be Rolled Out July 10

     LONDON (MNI) - Ahead of next week's (Tues, July 10) first monthly estimate

of Gross Domestic Product (GDP), MNI outlines the motivation behind the change

of system made by the Office of National Statistics (ONS) and the key

differences to look out for. 

     --MOTIVATION FOR SYSTEM SWAP

     Speaking exclusively to MNI in May, James Scruton, Head of GDP at the ONS,

said the change in methodology and presentation would be for the better.  

     "The trade-offs are that we get a slightly less timely first estimate of

quarterly GDP and less data content in some of the components of GDP in the

first quarterly estimate. Overall, however, the first estimate of quarterly GDP

will be of far higher quality and our second estimate will be no different to

our current third estimate, both in terms of timing and data content," said

Scruton. 

     --OLD MODEL VS NEW

     Up until now, the ONS's GDP publication model included three releases per

quarter - a preliminary estimate (published 25 days after the end of the

respective quarter, largely comprised of output data and with a data content of

roughly 45%), a second estimate (approx. 55 days after quarter-end, with the

data content rising to around 65%) and a final estimate (published 85 days after

quarter-end alongside the Quarterly National Accounts, with a data content of

around 90%).   

     The new model, effective from next week, will see one less quarterly

estimate of GDP but the introduction of rolling monthly figures. 

     The first quarterly estimate will arrive 40 days after the end of the

respective quarter. Although the output data content will be higher in this

reading, the income and expenditure content versus the current second estimate

will be lower. 

     Then, a further 45 days after this release, a fully comprehensive GDP

estimate will be published alongside the quarterly national accounts -

essentially unchanged form the old programme. 

     The introduction of the monthly GDP estimates reflects an initiative to

release economic statistics according to "themes", which each provide a

different perspective on UK economic activity. 

     Early last year saw the introduction of the Short-Term Economic Indicators

(STEI) release which grouped together the Index of Production and Trade

releases, published around the 10th of every month. From next week these will be

joined by the Index of Services print, brought forward by 2 weeks. 

     In doing so this installs the last piece of the puzzle and facilitates the

ONS to publish a monthly GDP in a manner which, in their words, should boost the

quality of the data and lessen the frequency of revisions.

     Other subtle changes made include a more detailed breakdown of the services

numbers and the introduction of real and deflated trade balance figures to sit

alongside the more commonly cited nominal values.     

     --WHAT TO EXPECT NEXT WEEK AND BEYOND

     The data delivered on July 10 will cover GDP growth over the three months

to May but will also include month-over-month, year-over-year growth and

three-month year-over-year figures too. 

     Although containing strains of income and expenditure data, since it is a

non-calendar quarter the numbers will only be reported on an output basis -

breaking down GDP into the broader services, production, construction and

agriculture sub-categories.   

     The timetable for the next six months can be found below:

--------------------------------------------------------------------------------

Calendar

month                         Monthly releases                Quarterly releases

                    Tuesday 10th: Monthly GDP/

July                            STEI (for May)

                                                    Friday 10th: First quarterly

August           Friday 10th: Monthly GDP/STEI                      GDP estimate

                                    (for June)                   (for Quarter 2)

               Monday 10th:  Monthly GDP/STEI            Friday 28th: Quarterly

September                           (for July)                 National Accounts

                                                                 (for Quarter 2)

                       Wednesday 10th: Monthly

October                               GDP/STEI

                                  (for August)

                                                    Friday 9th: First quarterly

November          Friday 9th: Monthly GDP/STEI      GDP estimate (for Quarter 3)

                               (for September)

                     Monday 10th: Monthly GDP/  Friday 21st: Quarterly National

December                    STEI (for October)          Accounts (for Quarter 3)

     Source: ONS

--MNI London Bureau; tel: +44 203-586-2225; email: les.commons@marketnews.com

[TOPICS: MABPR$,M$B$$$,M$E$$$]