National Statistical

The ONS plans to reinstate its quarterly estimates of regional Gross Domestic Product (GDP) in an improved form. Instead of relying on survey data, these innovative statistics are based on the latest available tax data. Here Gemma Rabaiotti provides an update on the work and our plans for their reintroduction.

Background

These quarterly estimates were first introduced in the autumn of 2019. Unlike many of our other key figures that draw on surveys, these innovative statistics were derived almost entirely from Value Added Tax returns. Although they take a little longer to compile, they provide much more of a granular picture of what is happening in the economy.

However, producing these statistics is a complex optimisation challenge, and the figures could often be volatile, with larger revisions than we would like, as later data were received and the different figures at each stage constrained to national GDP totals. Consequently, the ONS suspended the series a little over 18 months ago to consider how the estimates could be improved

We brought in independent experts from the Economic Statistics Centre of Excellence (ESCoE) to assess the current methods, data sources and how these might be improved. ESCoE concluded its review in late 2024 and since then we have been assessing the work required to reinstate quarterly estimates of regional GDP.

The ESCoE report was published today and includes several short-term and long-term recommendations to improve these key statistics. We will take on many of these recommendations immediately, which will allow us to recommence publication of these figures for the nine English regions and Wales later this year Estimates for Scotland and Northern Ireland are published separately by those countries, but will be incorporated in our publication to give a UK-wide picture.

Recommendations

The key recommendations that we plan to bring into these statistics include:

• Constraining to annual regional GDP: this will be applied to the back series and reviewed for consistency with the National Accounts Revisions Policy.
• Assessing source data: ongoing assessment of the suitability and use of source data by region and industry to ensure accuracy.
• Producing a consistent back series: creating a back series to publish in advance of reinstating the quarterly publication, which will be consistent with the Supply and Use Tables linked to annual regional GDP.
• Announcing a publication schedule and revisions policy: establishing a clear publication schedule and revisions policy.

Creating a timely and consistent regional GDP dataset along with other estimates of GDP is not simple, and whilst some of these recommendations are now in place these improvements will take a little while yet fully to introduce. The ONS is focused on producing the high-quality data policymakers need, and this improved and reinstated dataset will be an important contribution towards that goal.

Gemma Rabaiotti is Head of Quarterly Regional GDP Development