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Statistical processing

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National Accounts, Economic Statistics.
Bo Siemsen
+45 3917 3069

bsm@dst.dk

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National Accounts

Virtually all available economic statistics are applied as data sources when making the national accounts. When the first version for a given period is prepared, it takes place before all information about the period is available. Then the calculations are made on the basis of the structure of the latest final national accounts, which is projected with indicators from, for example, cyclical statistics. When new sources are ready, they are continuously incorporated into the national accounts according to a fixed rhythm. Three years after a given period, the national accounts are considered to be final.

Source data

The source for the national accounts consists of statistics on economic activity, business structure and prices. The different versions of the national accounts are based on different sources.

The final national accounts are calculated at a time when the sources are available in their final versions and in a very detailed form.

On the other hand, the quarterly national accounts and the first interim annual figures are calculated relatively shortly after the end of the reference period. The sources of these inventories are therefore relatively few and in many cases only preliminary, and because of this, the most important source is the final national accounts that form the basis for the projection along with available indicators.

In the following, the sources for the different version of the national accounts are listed:

Quarterly national accounts (QNA60): Production and turnover in manufacturing industries, Purchases and sales by enterprises (only partly), Stocks of manufacturers and wholesale, Retail turnover index, Balance of payments and external trade statistics, Producer and import price index for commodities, Producer price index for services, Consumer price index, Net price index.

Quarterly national accounts, revised (QNA90): Same as QNA60 + Purchases and sales by enterprises, Purchases and sales by manufacturing industries, Financial industries and FISIM and Government finance statistics.

Quarterly national accounts 180 days (only Q4): Same as QNA90 + Government finance statistics.

Preliminary annual national accounts (t-1): Same as QNA180 + volume indicators for non-market individual services produced by general government, Accounts statistics for non-profit institutions serving households (NPISH) and Economic Accounts for Agriculture.

Preliminary annual national accounts (t-2): Same as preliminary ANA (t-1) + Accounts statistics, Accounts for public corporations, Household budget survey, Energy accounts.

Final annual national accounts (t-3): Same as preliminary ANA (t-2) + General enterprise statistics, Industrial commodity statistics, Manufacturers’ purchase of raw materials.

For an overview of sources on industry level see Branchefordelt kildeoversigt In Danish.

Frequency of data collection

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

Data collection

Most of the data for the national accounts are collected via deliveries from the primary statistics in Statistics Denmark. In addition, supplementary information is collected to a lesser extent to ensure that the national accounts achieve full coverage, among other reasons. The supplementary information is primarily publicly available information on companies' activities, products, and development through information on companies' websites, in newspapers and the like, but can also be obtained through direct contact with the companies and authorities.

Data validation

In addition to the data validation performed by the primary statistics, a number of other data validation procedures are performed after the national accounts receive the data. Among other things, there are validation procedures that ensure internal and external consistency for certain variables. In addition, a number of confrontation routines are carried out to ensure that a correct financial interpretation of the (partial) results can be made. There is no uniform procedure for this, but time series are often used for the individual variables, where any breaks or other irregularities are detected. This may give rise to further studies of sub-areas where the producers of primary statistics are involved. The scope and depth of the different validation procedures depend on the time available for the calculations, which is considerably shorter for the quarterly and preliminary annual national accounts than for the final national accounts.

Data compilation

The data processing takes place in several steps. The scope of the process depends partly on the availability of sources and partly on calculation methods, as well as how much time is available.

Final annual national accounts

The final annual national accounts are prepared at a very detailed level where virtually all sources are incorporated, which also ensures that the final national accounts subsequently can be used as a benchmark for the quarterly and preliminary national accounts for later periods.

First, the sources are recoded to match the concepts of the national accounts, which in the final national accounts also include product numbers where possible. There are a total of approximately 2,350 products covering both goods and services. In order to ensure total coverage for the national accounts, enumeration or estimation is made using supplementary sources in areas where the source material does not have total coverage.

Then, based on the collected and processed statistics, totals for all parts of the national accounts are compiled. This includes among others production values and intermediate consumption for all industries, measurements for the various consumer groups and types of investment, as well as public consumption.

Next, supply-use matrices are compiled, which collect the full source material and provide an unreconciled national account to begin with. The matrices have two dimensions:

  1. Industry / group of consumption / investment type dimension
  2. Product dimension.

The matrices are reconciled in two rounds. In the first round, the product dimension of the matrices is balanced, which means that on the one hand the approach (production + import) and on the other the application (intermediate consumption + consumption + investment + export) for each of the approx. 2,350 product balances must balance.

As an example, it creates an imbalance if a company has reported their production and export on different product numbers for different primary statistics. In such a case the company's reports across primary statistics must be investigated, which may give rise to corrections or deviations from one or more primary statistics.

In the second round of reconciliation, it is attempted to bring each industry / consumer group / investment type close to the totals previously determined based on the primary sources. This process may also give rise to further investigations that result in corrections or deviations from primary statistics.

After reconciling the supply-use matrices at current prices, the same matrices are reconciled at fixed prices. Alongside the reconciliation of the supply-use matrices in current prices, the corresponding price indices are processed and prepared. When the matrices are ready at current prices, a detailed deflation of all values is done. The deflation eliminates the effect of price developments in the national accounts figures.

After this, the national accounts are available in both current and fixed prices. The fixed prices show the real development in the components of the national accounts. The most important part of the fixed-price calculations is the gross domestic product, GDP, at fixed prices, which is the basis for showing how much the economy has overall grown over the period - either by quarter or year-GDP growth.

Following the reconciliation of the final national accounts at current and fixed prices, the investment matrices are compiled and reconciled. The investment matrices show what the various industries invest in. The investment matrices are primarily based on the adjusted supply-use matrices in both current and fixed prices and are supplemented by detailed information primarily from accounting statistics, public accounts, import and export.

Final quarterly national accounts

When a final annual national account has been calculated, a new benchmarking is done for the quarters of that year, so that the sum of the four quarters always corresponds to the annual figures. Then a manual reconciliation of supply and use is done in the figures, taking into account the sources available on quarterly basis.

Quarterly and preliminary annual national accounts

First, the sources are recoded to match the concepts of the national accounts (for example, industries and consumer groups). This ensures consistent processing of the sources across the primary statistics and that the sources can be used in conjunction with the final national accounts.

Then the actual national accounts calculations begin. In the quarterly and first bid of the annual national accounts, the general method is a projection of the individual series (industries, consumer groups, investment types, etc.) using the growth rates of selected indicators where the level in the previous versions of the national accounts is used as a benchmark. Price indices for each series are also incorporated. In addition, selected sources are incorporated directly in level (current prices) in the national accounts as they become available. Sources that are always incorporated in this way are general government expenditure and income, foreign trade, construction activity, stock figures, financial industries and FISIM.

This results in unreconciled national accounts (both in current and fixed prices), meaning that supply and use are not equal. In the next step, reconciliation takes place where the approach and application (both in current and fixed prices) are balanced with each other. The series that do not balance are corrected over several rounds. The assessment of which series need to be corrected for imbalances is done both by returning to the primary source statistics where they are available and by estimates.

The compilation of preliminary annual national accounts is based to a certain extent on the current quarterly national accounts. In addition, important supplementary information on annual basis, which is available at the time of calculation, is incorporated. This is mainly the Accounts statistics for the latest year.

The calculation period for the quarterly as well as the preliminary annual national accounts is typically 2-5 weeks.

Adjustment

Seasonal adjustments are made for normal seasonal fluctuations in the quarterly national accounts. Data is seasonally adjusted using the X-13 ARIMA software package with a fixed model selection. The models are evaluated and adapted usually once a year. In the seasonal adjustment, Easter is taken into account to a certain extent and pre-corrected if the effect is significant. No other separate correction is made for working and/or trading days. However, experience shows that it is difficult to estimate the exact effect of Easter. Especially in the years when Easter changes between the first and second quarters compared to the previous year, there are major changes in the correction. The seasonal adjustment must be interpreted more cautiously than usual in these cases.

Indirect seasonal adjustment is used, which means that the individual time series are seasonally adjusted at the detailed level, and that the seasonally adjusted main variables such as GDP are compiled by aggregating the detailed seasonally adjusted time series. The seasonally adjusted GDP is calculated from the production side, as it has the higher correlation with the directly seasonally adjusted GDP. This results in a statistical discrepancy with the GDP that can be compiled from the use side. The statistical discrepancy is not corrected for.

Read more about the seasonal adjustment of the quarterly national accounts in the note The seasonally adjusted GDP (Det sæsonkorrigerede BNP – in Danish).