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NIESR: June 2016 GDP estimates
Our monthly estimates of GDP suggest that output grew by 0.5 per cent in the three months ending in May 2016 after growth of 0.4 per cent in the three months ending in April 2016.
James Warren, Research Fellow at NIESR, said “A rebound of production sector output in has supported reasonable GDP growth in the three months to May 2016. Despite this pick up, the production sector remains 9.2 per cent below its pre-recession peak at the beginning of 2008. Our estimates imply that growth so far in 2016 has remained relatively subdued. In our latest quarterly forecast we expect acceleration in the second half of 2016*. However, there remain specific uncertainties around the near term outlook for the economy, most notably the outcome of the impending referendum on the UK’s membership of the EU.”
*See here for press release published 10th May.
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)
