Think Tanks
 Printable version
|
NIESR: July 2016 GDP estimates
Our monthly estimates of GDP suggest that output grew by 0.6 per cent in the three months ending in June 2016 after growth of 0.6 per cent in the three months ending in May 2016.
Jack Meaning, Research Fellow at NIESR said “At first glance this represents a robust rate of quarterly growth for the UK economy. However, the quarterly figure masks an important within-quarter pattern. Our monthly estimates suggest that April saw a large expansion in GDP, which then stagnated in May. The estimate for June is one of an intensifying contraction across the board, but this is not enough to offset the very strong April numbers. What it does suggest is that when April drops out of the 3 month calculation we should see a quick deterioration of growth, especially if the estimated contraction in June persists or accelerates into July and beyond.”
It is important to note that this estimate covers the 3 months from April 2016 to the end of June 2016, and so is predominantly driven by data on the pre-referendum period. Monthly data are volatile and as such we should be cautious about over-interpreting developments in the fundamentals of the economy from any single month.
For more information on NIESR’s estimates of the short and medium term impact of the UK’s decision to leave the EU, see here and for the long term impact see here.
Figure 1. Real GDP growth (per cent per quarter)
Source: ONS, NIESR. Note: red bar indicates NIESR estimate for 2016Q2
Technical notes: Our track record in producing early estimates of GDP suggests that our projection for the most recent three-month period has a root mean squared error (RMSE) of 0.224% point (for the full sample period 1999Q3-2015Q4) when compared to the first estimate produced by the ONS. For the period 2008Q1 to 2015Q4 the RMSE is 0.290% point. The impact of the adverse weather in 2010Q4 is a noticeable outlier. Excluding 2010Q4 from the analysis, the RMSE for the full sample period is 0.188% point, and for 2008Q1 to 2015Q4 the RMSE is 0.231% point. These comparisons can be made only for complete calendar quarters. Outside calendar quarters the figures are less reliable than this.
A paper describing the methodology used to produce the data was published in the February 2005 volume of the Economic Journal:
Mitchell, J. Smith, R. J., Weale, M. R., Wright, S. and Salazar, E. L. (2005) ‘An Indicator of Monthly GDP and an Early Estimate of Quarterly GDP Growth’, Economic Journal, No. 551, pp. F108-F129.
- Available from: http://onlinelibrary.wiley.com/journal/10.1111/(ISSN)1468-0297
A paper describing the methodology used to produce the data for the inter-war period was published in the October 2012 volume of Explorations in Economic History:
Mitchell, J., Solomou, S. and Weale, M. (2012) ‘Monthly GDP estimates for inter-war Britain’,Explorations in Economic History, Vol. 49, No. 4, pp. 543-556.
From April until October 2006 our estimates were computed using the Index of Services published by ONS. However this monthly series shows considerable volatility which has caused us some problems in estimating GDP. From our November 2006 press release we have therefore reverted to using a model of private services output based on indicator variables. This means that, while all our figures for calendar quarters are fully coherent with ONS data, our estimates of monthly private service output are not. The series can be thought of as indicating the underlying value of the ONS series.
Notes for editors: For further information please contact the NIESR Press Office or Luca Pieri on 020 7654 1931/ l.pieri@niesr.ac.uk
National Institute of Economic and Social Research
2 Dean Trench Street
Smith Square
London, SW1P 3HE
United Kingdom
Switchboard Telephone Number: 020 7222 7665
Website: http://www.niesr.ac.uk
Contents of Press Release
Table 1, Page 3: Summary Table of Quarterly Growth Rates showing Monthly Data, 3 months ending in that month, and Quarterly Growth (% per quarter). All contain Figures for Industry & GDP.
Table 2, Page 4: Output by Sector (Industry, Agriculture, Construction, Private Services, Public Services, GDP(B) (calculated at prices excluding taxes and subsidies), GDP
Table 3, Page 5: Output in Quarter Ending in Month Shown by sector (as above)
Table 4, Page 6: Growth in Quarter Ending in Month Shown over Previous Quarter (% at Annual Rate) by sector (as above)
