National Accounts (Income and Expenditure): Year ended March 2016

Period-specific information

This release contains revisions arising from new and updated information. It incorporates National Accounts (Industry Production and Investment): Year ended March 2015 statistics and new and improved information.

Estimates for 2015 and 2016 are provisional

Figures for the March 2015 and 2016 years are provisional, and incomplete for the business sectors of the economy. We will incorporate more up-to-date information in future releases. The new information will also affect distributions between the business and household sectors and flow into household saving.

National Accounts (Income and Expenditure): Year ended March 2017 will provide provisional estimates for the March 2017 year and revised estimates for the March 2015 and 2016 years.

Revisions to the national accounts next year will result from up-to-date information becoming available, including updated data from the Annual Enterprise Survey: 2015 financial year (provisional) and initial inclusion of detailed results from the 2016 Annual Enterprise Survey.

Statistics for the years up to 2015 are consistent with National Accounts (Industry Production and Investment): Year ended March 2015.

Suppression of market and non-market capital series for provisional years

We suppressed market and non-market values for gross fixed capital formation and net capital stock for provisional years. This has occurred at the central government, local government, and total economy sector of ownership levels. We supressed these series due to quality concerns around the coherence between the market and non-market sector of ownership series, and the institutional sector series. We are looking to resolve these coherence concerns in our annual national accounts release in 2017.

See National Accounts (Income and Expenditure): Year ended March 2016 - institutional sector accounts tables for an institutional sector split of gross fixed capital formation.

See National Accounts (Income and Expenditure): Year ended March 2016 - Table 1.3 of the consolidated accounts tables for a sector of ownership split for total central government and total local government gross fixed capital formation.

Improvement in the provision of data

The Excel tables are presented in an improved format to make it easier for you to analyse the data.

You can download the data in CSV format, which includes status flags to indicate the data values that have been revised since the last release.

Revisions

This year’s annual national accounts reflect revisions to previously published data for some series. The revisions to the national accounts in 2016 are due to new data and information that have become available since the 2015 annual release. Some of these revisions will flow through to the quarterly GDP release on 22 December.

The revisions reflect:

• incorporation of up-to-date information from 2013 and 2014 annual economic surveys, reflecting the regular annual update cycle
• partial incorporation of the Annual Enterprise Survey 2015
• updated tax data
• incorporation of up-to-date balance of payments data
• updated data measuring unconsented construction arising from the Canterbury earthquakes.

See Preview of 2016 national accounts improvements for the reasons for the revisions and an evaluation of their impact.

The revisions discussed in this paper align with Statistics NZ’s general policy of revisions in macro-economic statistics. It is standard practice to update the accounts with periodically updated data.

For this release we mainly incorporated the up-to-date information from the 2013 and 2014 annual economic surveys, but also included updated and new information from other data sources. The updates affect nearly all statistics published in the national accounts release. The updates reflect a reconciliation of goods and service flows across the economy within the national accounts framework for all years up to 2014.

In addition, a reconciliation process for financial flows, such as interest and dividend payments and receipts, is done to complete a picture of income and expenditure flows between sectors of the economy. Information is available for the initial reconciliation of financial flows between all sectors up to 2015. This has been made possible by making more comprehensive and timely use of the 2015 Annual Enterprise Survey data within the annual national accounts cycle.

Revisions to National Accounts (Industry Production and Investment)

The revisions to National Accounts (Industry Production and Investment) – formerly National Accounts (Industry Benchmarks), result from balancing the production and expenditure estimates of GDP within a supply-and-use framework.

Annual national accounts sources and methods has more information on this.

Revisions to balance of payments

Balance of Payments and International Investment Position: Year ended 31 March 2016 included revisions to overseas investment income, which are included in this release. Revisions of note came from updated Inland Revenue data from the latest tax returns for companies, individuals, and other relevant units.

See Preview of 2016 revisions to balance of payments and national accounts for balance of payments revisions and an evaluation of their impact.

Revisions to national saving from new and improved information

Revisions to household savings

Revisions to household saving are due to the availability of more accurate data for provisional estimates. Revisions to savings from 2013 to 2015 have resulted from the following changes:

• Incorporating the new supply-use benchmarks from balancing.
• Updated tax data.
• Incorporating up-to-date Balance of Payments data.
• Updating our method for measuring entrepreneurial income. We improved our method for measuring the activity of non-corporate businesses for the 2015 provisional year. The new estimates incorporate survey data and information from the Annual Enterprise Survey 2015. This is an improvement on the previous method that used various Statistics NZ and external data sources to derive an estimate for provisional entrepreneurial income. The latest provisional year (2016) continues to be modelled using the provisional methodology.
• Fixing an error in our sector allocation. The corporate structures of businesses influence how income flows to the household sector. Within the national accounts framework all profits of private non-corporate businesses (NZISC96 112), such as sole traders and partnerships, are recorded as household income.

In our previous release – National Accounts (Income and Expenditure): Year ended 2015 - we made an error in the allocation of business income for a group of units for the 2013 to 2015 years. These units, which usually belong in the private corporate producer enterprises (NZISC96 111) were incorrectly classified to the private non-corporate business enterprises (NSIZC96 112) sector. This resulted in a very high non-farm entrepreneurial income flow to the household sector for those years.

We have fixed the allocation error in this release. The shift in business income from the non-corporate producer enterprises sector (NZISC96) to the private corporate producer enterprises sector (NZISC96 111) results in a lower non-farm entrepreneurial income reported for the above years. Household saving is revised downwards as a direct result of this change.

Improvements to gross fixed capital formation

The most significant improvement to measuring expenditure on GDP is an update of the data used to measure unconsented building construction arising from the Canterbury earthquakes. We updated our estimates because better housing insurance data became available, which has been used to improve our residential building gross fixed capital formation series. The data updates cause upwards revisions of about 3 percent to residential building investment from 2013 to 2015.