GDP quarterly national accounts, UK: January to March 2025 – Office for National Statistics

GDP quarterly national accounts, UK: January to March 2025 – Office for National Statistics

Data Sources and Quality in GDP Measurement: Emphasizing Sustainable Development Goals (SDGs)

Overview of GDP Measurement Approaches

Gross Domestic Product (GDP) is measured using three distinct approaches: the output approach, the expenditure approach, and the income approach. Each approach utilizes different data sources and varies in data quality, influencing the methodology for balancing quarterly GDP data. In the UK, output data are more readily available in the short term than data for the other approaches. To provide the most accurate GDP estimate, figures from all three approaches are balanced and averaged, except for the most recent two quarters where output data predominate due to their greater data content.

These three approaches enable cross-verification within the national accounts framework, ensuring consistency and reliability. Despite close alignment, some uncertainty remains at the component level during the production cycle for 2023 and 2024, pending reconciliation through the supply and use tables (SUTs) framework.

Output Approach

The output approach currently lacks final estimates for intermediate consumption—the value of goods and services used up in production. Initial estimates use turnover and output as proxies for changes in gross value added, assuming the intermediate consumption ratio by industry remains constant from 2022 onwards. This approach supports SDG 8 (Decent Work and Economic Growth) by providing timely economic activity data to inform sustainable economic policies.

Expenditure Approach

This approach faces challenges due to lower response rates in key surveys such as the Living Costs and Food Survey, which informs household consumption estimates. To maintain data quality, additional indicators like the Monthly Business Survey are used for short-term adjustments. Reliable expenditure data contribute to SDG 12 (Responsible Consumption and Production) by enabling monitoring of consumption patterns.

Income Approach

Up-to-date quarterly information on gross trading profits is unavailable due to data collection lags from HM Revenue and Customs (HMRC). Contextual data from alternative sources inform these estimates. Additionally, lower response rates in the Labour Force Survey (LFS) introduce uncertainty in employee compensation figures, mitigated by supplementary data such as the Pay As You Earn Real Time Information. Accurate income data underpin SDG 1 (No Poverty) and SDG 10 (Reduced Inequalities) by informing income distribution analyses.

GDP Growth and Balancing Methods

Real GDP in the UK is estimated to have increased by an average of 1.1% in 2024, as depicted in Figure 12. Quarterly GDP balances the three approaches, with the monthly GDP estimate focusing on gross value added and output as proxies. Quarterly GDP is prioritized due to higher data content and inclusion of variables enabling conversion from GVA to GDP.

Balancing Procedures

  • Alignment adjustments target a limit of ±£3,000 million per quarter to balance data discrepancies.
  • In periods with challenging data balancing, larger adjustments may be applied to avoid over-adjusting individual GDP components.
  • Balancing adjustments are applied where data content is weak due to forecast reliance, ensuring data integrity.

These balancing practices support SDG 16 (Peace, Justice and Strong Institutions) by promoting transparency and reliability in economic statistics.

Net Trade Considerations

Post-Brexit changes have altered UK-EU trade data collection, leading to adjustments in goods import estimates for 2021 and 2022. A structural break persists in the time series from January 2021 onwards. Users are advised to interpret trade statistics cautiously. These adjustments align with SDG 17 (Partnerships for the Goals) by enhancing international data comparability and cooperation.

International Trade in Services Estimates

From September 2025 to early 2027, International Trade in Services (ITIS) data will be processed quarterly with robust survey response rates, improving data quality. Until then, estimates rely on forecasts, particularly for travel services affected by the transformation of the International Passenger Survey (IPS). These improvements contribute to SDG 9 (Industry, Innovation and Infrastructure) by strengthening statistical infrastructure.

Producer Prices Data and Publication Pauses

Corrected business prices data have been incorporated from January 2025 onwards for producer, import, and export price indices. Service producer price indices are pending inclusion following further analysis. Full implementation will follow the national accounts revision policy, ensuring data consistency. This process supports SDG 12 by improving the accuracy of price indices used in economic planning.

Strengths and Limitations of UK National Accounts

The UK National Accounts integrate diverse data sources, offering comprehensive economic perspectives. This multi-source approach enhances data robustness, essential for monitoring progress towards SDGs such as SDG 8 and SDG 12. Detailed methodological information is available to support data users in understanding quality and limitations.

Seasonal Adjustment Methodology

Quarterly GDP estimates are seasonally adjusted using the X-13-ARIMA-SEATS method to remove calendar-related variations, isolating trend and irregular components. Regular monitoring and quality assurance ensure the reliability of seasonally adjusted data, facilitating accurate economic analysis aligned with SDG 8.

Quality Considerations and Statistical Revisions

  1. Early GDP estimates may have limited accuracy due to incomplete data.
  2. Revisions are a natural consequence of balancing timeliness and accuracy.
  3. Statistical errors are inherent and managed through rigorous methodologies.

Understanding these factors is crucial for informed decision-making supporting sustainable development.

Accreditation and Compliance

The GDP statistics are accredited official statistics, independently reviewed to comply with standards of trustworthiness, quality, and value as outlined in the Code of Practice for Statistics. This accreditation reinforces the credibility of data used to track progress towards the Sustainable Development Goals.

1. Sustainable Development Goals (SDGs) Addressed or Connected to the Issues Highlighted in the Article

  1. SDG 8: Decent Work and Economic Growth
    • The article focuses on measuring GDP, economic output, income, and expenditure, which are core indicators of economic growth and productivity.
    • It discusses data quality and methods used to estimate economic performance, which are essential for monitoring sustainable economic growth.
  2. SDG 9: Industry, Innovation, and Infrastructure
    • The article references the use of advanced statistical methods and data sources to improve national accounts, reflecting innovation in data collection and processing.
    • It mentions improvements in travel and tourism statistics, indicating infrastructure and service sector monitoring.
  3. SDG 17: Partnerships for the Goals
    • The article highlights collaboration between various data sources such as HM Revenue and Customs, Office for National Statistics, and other surveys, demonstrating partnerships for data quality and statistical capacity.
    • It references adherence to international standards and codes of practice, supporting global partnerships for sustainable development monitoring.

2. Specific Targets Under Those SDGs Identified Based on the Article’s Content

  1. SDG 8: Decent Work and Economic Growth
    • Target 8.1: Sustain per capita economic growth in accordance with national circumstances, and in particular at least 7 per cent gross domestic product growth per annum in the least developed countries.
    • Target 8.3: Promote development-oriented policies that support productive activities, decent job creation, entrepreneurship, creativity, and innovation.
  2. SDG 9: Industry, Innovation, and Infrastructure
    • Target 9.5: Enhance scientific research, upgrade the technological capabilities of industrial sectors, including by encouraging innovation and substantially increasing the number of research and development workers.
  3. SDG 17: Partnerships for the Goals
    • Target 17.18: Enhance capacity-building support to developing countries to increase significantly the availability of high-quality, timely and reliable data.
    • Target 17.19: By 2030, build on existing initiatives to develop measurements of progress on sustainable development that complement GDP.

3. Indicators Mentioned or Implied in the Article to Measure Progress Towards the Identified Targets

  1. GDP Growth Rate
    • The article discusses quarterly and annual GDP growth rates, including real GDP growth estimated at 1.1% in 2024, which is a key indicator for SDG 8 Target 8.1.
  2. Gross Value Added (GVA)
    • GVA is used as a proxy for GDP in the monthly estimates, reflecting economic productivity and output.
  3. Household Consumption Estimates
    • Data from the Living Costs and Food Survey and Monthly Business Survey inform household consumption, relevant to economic activity measurement.
  4. Business Profits and Compensation of Employees
    • Estimates of gross trading profits and employee compensation are used in the income approach to GDP, indicating economic health and labor market conditions.
  5. Trade Statistics
    • Data on goods and services trade, including adjustments post-Brexit, are used to measure net trade, important for understanding economic openness and infrastructure.
  6. Data Quality and Statistical Methodologies
    • Use of seasonal adjustment methods (X-13-ARIMA-SEATS), balancing approaches, and quality assurance processes indicate efforts to improve data reliability and timeliness, supporting SDG 17 targets.

4. Table of SDGs, Targets, and Indicators Identified in the Article

SDGs Targets Indicators
SDG 8: Decent Work and Economic Growth
  • 8.1: Sustain per capita economic growth
  • 8.3: Promote productive activities and decent job creation
  • Quarterly and annual GDP growth rates (e.g., 1.1% real GDP growth in 2024)
  • Gross Value Added (GVA)
  • Household consumption estimates
  • Gross trading profits and compensation of employees
SDG 9: Industry, Innovation, and Infrastructure
  • 9.5: Enhance scientific research and technological capabilities
  • Use of advanced data collection and processing methods
  • Improvements in travel and tourism statistics
  • Trade in goods and services data
SDG 17: Partnerships for the Goals
  • 17.18: Increase availability of high-quality, timely and reliable data
  • 17.19: Develop measurements complementing GDP
  • Seasonal adjustment methodologies (X-13-ARIMA-SEATS)
  • Balancing adjustments in GDP estimates
  • Collaboration between multiple data sources and agencies
  • Adherence to Code of Practice for Statistics and accreditation

Source: ons.gov.uk