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Revisions in euro area GDP and retail trade: Reliability, timeliness and infra-annual distribution

This document discusses the reliability, timeliness, and distribution of revisions in Euro Area GDP and retail trade, including indicators, dataset, revision indicators, evolution of GDP flash estimates, and summary for revisions.

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Revisions in euro area GDP and retail trade: Reliability, timeliness and infra-annual distribution

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  1. Revisions in euro area GDP and retail trade:Reliability, timeliness and infra-annual distribution Heinz Dieden European Central Bank – DG Statistics OECD Short-Term Economic Statistics Working Party (STESWP); Paris, 23-24 June 2008

  2. 1 Introduction • Key elements • Reliability/revisions • Timeliness • Infra-annual distribution of revisions • Indicators • GDP volume growth (q-o-q); sa & wda • Constant retail trade turnover (m-o-m); sa & wda • Euro area aggregates • GDP: 2000 Q1 until 2006 Q4 • Retail trade 2000 January until 2007 April

  3. 2 Dataset • Real-time database • ECB’s revision database: from June 2001 onwards • OECD’s MEI Release and Revisions database • ECB’s Monthly Bulletin • Timeliness • Calendar days • 30 days per month

  4. 3 Revision indicators • Size of revisions • Average absolute revisions • Range of revisions • Direction/sign of revision • Average revision • Changes in sign • Upward/downward revisions • Volatility of revisions • Standard deviation

  5. 4 GDP • Flash/first estimate versus second estimate • Flash estimate from 77 days to 44 days • Flash/first estimate versus annual update • Annual update = estimate available in the 3rd quarter of the following year • Flash/first estimate versus current estimate • Not full cycle of revisions for more recent data

  6. Revisions for GDP 5

  7. Evolution of GDP flash estimates 6

  8. Timeliness and average of revisions (GDP flash vs current estimate) 7

  9. 8 Summary for GDP revisions • Euro area revisions are small and estimates are stable • Size: 0.06ppt (flash), 0.09ppt (annual), 0.12ppt (current) • Sign: almost negligible (0.01ppt, 0.0 ppt and 0.0ppt) • Volatility: std of 0.15 for annual update • Timeliness • considerable improvements from 70 to 44 days • Flash estimate did NOT increase revisions, rather opposite • Infra-annual distribution • Revisions differ across quarters • Higher revisions mostly in 1st half of the year

  10. 9 Retail trade • Flash estimate since January 2004 • Two period: before and after flash • Flash/first estimate • versus 1 month later • versus 2 months later • versus 1 year later • versus current estimate

  11. Evolution of euro area retail trade growth 10

  12. New: Timeliness and average revisions for euro area retail trade turnover 11

  13. 12 Summary for retail trade revisions • Periods with rather high (early-2000, turn of 2001; mid-2002 until mid-2004) and with smaller revisions • Size: large before the flash (0.55ppt (annual)) significant thereafter (0.36ppt (annual)) • Sign: small, but changed direction prior (-) and after (+) flash • Volatility: decrease since flash from 0.71 to 0.43 (1 year later estimate)

  14. 13 Summary for retail trade revisions (cont’d) • Timeliness • considerable improvements from 70 to 35 days • Initial problems, but flash did NOT increase revisions • Infra-annual distribution • No general rule, but pattern differ across months • Somewhat higher in 1st half of the year

  15. 14 Conclusions/caveats • Revisions in euro area aggregates relatively small for GDP and significant for retail trade • Improved timeliness did not lead to higher revisions • Infra-annual revisions not equally distributed • Small sample (from 2000 only) • No full revision cycle for ‘current’ estimates • National revisions tend to outweigh each other • Changes in country coverage not considered

  16. Thank you for your attentionQuestions and comments?

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