Statistical processing

Source data

The source basis for the quarterly national accounts consists of statistics on economic activity, business structure, and prices. The different versions of the quarterly accounts and the different approaches to compiling GDP are based on different sources. The first edition of the quarterly national accounts for a given quarter is calculated relatively shortly after the end of the quarter. Consequently, fewer sources are available for these estimates, and in many cases, the sources are preliminary. An important source for the calculations is therefore also the final and preliminary annual national accounts, which form the structural starting point for projections using available indicators.

The primary sources for the first two estimates of a given quarter are:

First estimate (published approx. 50 days after the end of a quarter): Production and turnover in manufacturing industries, Purchases and sales by enterprises (partly), Stocks of manufacturers and wholesalers, Retail turnover index, Balance of payments and International trade statistics, Producer and import price indices for commodities, Producer price index for services, Consumer price index, Net price index, Financial Intermediation Services Indirectly Measured (FISIM), as well as a preliminary internal estimate of government consumption.

Revised estimate (published approx. 90 days after the end of a quarter): Same as the first estimate, plus statistics on financial corporations, the working time accounts, and statistics on general government.

For both the first and revised estimates, GDP is compiled using the production approach and expenditure approach. The production approach relies on extrapolation using production indicators due to limited intermediate consumptions sources. Extrapolation is also applied on the expenditure approach, as well as direct source data from the primary statistics such as the governmental expenditure, balance of payments, and FISIM.

For the production approach, production and turnover in manufacturing industries, together with purchases and sales by enterprises are used as sources to compile GDP. No detailed data are available for intermediate consumption thus, intermediate consumption, for given quarter, is based on calculation rules where the share of intermediate consumption relative to production in the same quarter the previous year is used for the quarter being compiled. Moreover, agriculture uses specific statistics on output quantities and prices, while manufacturing and services rely on general indicators. Source data on taxes and subsidies on goods and services, as well as FISIM come from internal deliveries to the quarterly national accounts. Deflation of the production side is based on the producer and import price indices for commodities and intermediate consumption through a price model utilised by the quarterly national accounts.

For the expenditure approach, private consumption is based on Purchases and sales by enterprises, Retail turnover index, grocery scanner data, and spending monitor data from Danske Bank. Source data on government expenditure come from internal deliveries. Gross fixed capital formation is based on sales of goods by manufacturing industries and the balance of payments. Inventories are computed using production and turnover in manufacturing industries together with stocks of manufacturers and wholesalers. Imports and exports are based on the balance of payments and international trade statistics, with adjustments for economic ownership and specific classifications. Deflation of the expenditure side is based on the consumer price index and net price index.

For the income approach, compensation of employees comes from the Working time account, while source data on taxes and subsidies on goods and services, as well as on other production taxes and subsidies come from internal deliveries. Gross operating surplus and mixed income is computed as a residual once the gross value added, compensation of employees, and taxes on other production are known.

In addition, supplementary information is collected to a lesser extent, primarily to ensure that the national accounts achieve full coverage. The supplementary information mainly consists of publicly available data on enterprises’ activities, products, and developments, obtained from company websites, newspapers, and similar sources. It may also come from direct contact with enterprises and public authorities.

Frequency of data collection

Sources for the national accounts are continuously collected. The frequency of each source depends on both how quickly the first version is used by the national accounts and how quickly it is declared as the final version.

Most data for the production side are collected on a monthly basis. This applies to production and turnover in manufacturing industries, purchases and sales by enterprises, and producer and import price indices for commodities. The same holds for the expenditure side, where data such as stocks of manufacturers and wholesalers, retail turnover index, balance of payments and international trade statistics, grocery scanner data, spending monitor data, consumer price index, net price index and producer and import price indices for commodities are collected monthly. For the income approach, the working time accounts are collected monthly and annually. Lastly, the data provided by division of Government Finances – used across all three approaches – are collected monthly, quarterly, and annually.

Data collection

Most of the data for the quarterly national accounts are sourced from the primary statistics of Statistics Denmark.

Data validation

In addition to the data validation carried out in the primary statistics, a number of further validation procedures are conducted after the data are received for the quarterly national accounts. These include validation procedures that ensure both internal and external consistency for certain variables, like overall sums from the balance of payment. Furthermore, a series of confrontation routines are applied to ensure that the (sub)results can be correctly interpreted in economic terms.

There is no uniform procedure for this, but time series for the individual variables are often used to identify possible breaks or other irregularities. This may lead to further investigations of specific sub-areas, in which the producers of the primary statistics are involved.

Data compilation

Data processing takes place in several stages. The scope of the process depends partly on the availability of sources and partly on the calculation methods, as well as on the time available.

Quarterly national accounts

In the first stage, the individual sources are recoded to the concepts of the national accounts (for instance, industries and consumption groups). This ensures consistent treatment of the sources across the primary statistics and makes them compatible with the final national accounts. The actual national accounts calculations then begin.

In the quarterly national accounts, the general method is to project the individual series (industries, consumption groups, types of investment, etc.) using the developments in selected indicators, with the levels in previous versions of the national accounts serving as a benchmark. Price indices for the individual series are also incorporated. In addition, selected sources are incorporated at level (current prices) as they become available. Sources that are always incorporated at level include general government expenditure and income, foreign trade, construction activity, inventories, financial corporations, and FISIM.

This results in an unbalanced national accounts system (both at current and constant prices), meaning that supply and demand are unbalanced and do not match. In the next stage, a balancing procedure is carried out in which production side and expenditure side (both at current and constant prices) are brought into alignment. Corrections are made in several rounds to the series that are out of balance. The assessment of which series to adjust in order to achieve balance is carried out partly by returning to the source statistics, where available, and partly by discretionary judgement. The balancing is carried out in the areas where the aggregates are associated with the greatest uncertainty and tend to be revised later when the final quarterly national accounts are compiled. Corrections are mainly made on the expenditure side, such as intermediate consumption, gross fixed capital formations (usually machinery investments, and research and development), and inventories. In addition, corrections are made to imports and exports in constant prices, while the price development of intermediate consumption is adjusted to follow the price development of production.

The compilation of the preliminary annual national accounts is based to some extent on the available quarterly national accounts. In addition, important supplementary annual information is incorporated at the time of calculation, primarily meaning that the Accounts statistics for non-agricultural private sector for the new year are available and can be included.

Final quarterly national accounts

The consistency between quarterly and annual series is ensured by means of a mathematical annual benchmarking procedure - to align the quarterly figures with annual totals. When a final annual national account is calculated, a new benchmarking of the quarters of the relevant year is carried out, so that the sum of the four quarters always equals the annual totals. A manual balancing of supply and use is then performed, taking into account the sources available on a quarterly basis. The final quarterly national accounts are published at the same time as the annual national accounts, at the end of June.

Quarterly chain linking

The quarterly national accounts employ the annual overlap method to calculate chain-linked volume series. For a given variable, the annual overlap method constructs a chain-linked Laspeyres volume index, where annual average prices from the previous year are used as weights. The link factors are derived from the growth in volumes valued at previous year's prices. This technique ensures that quarterly series remain consistent with the annual national accounts while allowing for indirectly seasonally adjusted chain-linked series. Chain linking is applied to the quarterly series after the national accounts have been balanced.

Differences between quarterly and annual national accounts

The quarterly and annual national accounts both use detailed calculations for the compilation of GDP, but the quarterly national accounts often rely on extrapolations and therefore lack comprehensive data, such as intermediate consumption by enterprises. The annual national accounts, on the other hand, use more detailed source data, such as the government budget system and the accounting statistics. In addition, the products in the annual national accounts are balanced by commodity, which means that goods and services are based on supply and use, resulting in estimates that are more comprehensive.

Adjustment

Seasonal adjustment is applied to the quarterly national accounts to account for normal seasonal fluctuations - se more under seasonal adjustment. No further corrections of the data are made beyond what has already been described under data validation and data processing.