GDP Quarterly National Accounts: Quality and Methodology Information

The degree to which statistical outputs meet users' needs

The quarterly national accounts for Scotland, along with other short term GDP statistics produced by the Scottish Government, are published to provide users with timely information on the performance of Scotland’s economy.

GDP statistics have been continuously developed and improved by the Scottish Government since the early years of devolution. The production of GDP estimates - which capture activity from all sectors of the economy - was initially begun with the primary aim of providing a wider range of statistics on a more frequent and timely release schedule than the more limited range of annual regional statistics produced by the ONS.

The Scottish Government’s quarterly GDP first estimate and quarterly national accounts releases are both accredited official statistics and were designated as national statistics by the OSR in Assessment Report 83 (2011) and Assessment Report 272 (2014).

Scotland’s quarterly GDP and wider national accounts statistics provide a basis for analysing the economic performance of the country and are widely used by parts of the government, business and academic sectors as well as the media and general public. Following the changes to devolved powers in the Scotland Act (2016), the Quarterly National Accounts statistics are a major input to the independent statutory forecasts of the Scottish Fiscal Commission.

As part of the UK, Scotland’s national accounts statistics are produced, to the degree that it is possible at any given time, to be consistent with the latest UK national accounts. The UK national accounts are still compiled in accordance with the European System of Accounts 2010 (ESA 2010).  ESA 2010 is itself consistent with the standards set out in the United Nations System of National Accounts 2008 (SNA 2008).

As part of the compilation process, most of the national accounts statistics produced by the Scottish Government are also consistent with the annual UK regional GDP estimates produced by the ONS, although there can be differences introduced by timing (such as lags between releases) or methodology divergence where methods or data specifically relating to Scotland are found to be more relevant than general methods which might be applied across all parts of the UK.

The Scottish Government national accounts mostly relate to the geographical area of Scotland as defined for the International Territorial Level 1 (ITL1, UK region TLM), and exclude any economic activity which is counted as extra-regio under ESA10 (UK region TLZ). This is commonly referred to as Scotland’s onshore economy. Additional measures of some components of the national accounts are also produced which include estimates of the part of extra-regio economic activity which occurs in Scotland (that is, in areas where the Scottish Government has responsibility for devolved policy), including in Scottish adjacent waters, or which can be assigned a share to Scotland on another basis.

There are two quarterly estimates of Scotland onshore GDP in volume terms published each quarter alongside a monthly estimate of GDP. Other components of GDP in nominal terms (current prices) are published only in the quarterly national accounts release.

Data for the individual components of GDP are sourced from survey and administrative sources for Scotland, or are derived using regional apportionment methods on UK components of GDP published by the ONS.

The degree of closeness between an estimate and the true value.

The accuracy of GDP (i.e. how close is an estimate to the true value) is almost impossible to assess because it is based on a large number of data sources which each have their own margins of error, and there is no single ‘true’ data source for GDP. Instead, other dimensions of statistical quality are usually monitored to assess the statistics. In particular, timeliness and reliability are highly valued.

The reliability of GDP statistics is usually determined by how much initial estimates are revised over time. If revisions are too large then the value of the statistics is reduced. The timeliness of GDP statistics is particularly important for guiding and evaluating economic policy and the behaviour of people and businesses. There is therefore a careful balance which must be achieved between ensuring that the results published as early as possible with adequate reliability.

Expectations of accuracy and reliability in early estimates are often too high, and revisions are an inevitable consequence of this trade-off between timeliness and accuracy.

Analysis published alongside Scotland’s GDP in the past showed that that headline growth rates in the statistics are typically revised, on average, by around plus or minus 0.1 percentage points in the quarter following their initial release, and by around plus or minus 0.2 percentage points over the course of the next year. Occasionally there have been much larger revisions introduced to the statistics due to methodology improvements or changes to data sources.

Similar statistics for the UK and OECD members demonstrate that this scale of revisions is normal by international standards. Internationally, the OECD publishes similar analysis of revisions of quarterly GDP in selected countries. This analysis shows that, on average amongst the 18 countries considered, GDP growth rates are revised by +/- 0.18 percentage points between first estimates and the result published five months later, and by +/- 0.3 percentage points by one year later. There is considerable variation in the scale of revisions between the countries selected.

Very few statistical revisions arise as a result of errors in the popular sense of the word. All estimates, by definition, are subject to statistical "error". In this context the word refers to the uncertainty inherent in any process or calculation that uses sampling, estimation or modelling. Most revisions reflect either the adoption of new statistical techniques or the incorporation of new information, which allows the statistical error of previous estimates to be reduced. Only rarely are there avoidable errors such as human or system failures and such mistakes are made clear when they do occur.

Coherence is the degree to which data that are derived from different sources or methods, but refer to the same topic, are similar. Comparability is the degree to which data can be compared over time and domain for example, geographic level.

The quarterly GDP statistics for Scotland are designed to be coherent with the equivalent statistics for the UK, in as much as the available data and methods allow. The Scottish Government uses extracts of the same data sources used by the ONS, such as surveys or administrative data, for large parts of the economy. For some industries or other components of GDP, estimates for Scotland are instead made with direct reference to the equivalent component for the UK, for example by taking an employment share of the UK total. In this way, coherence between Scottish estimates and the UK as a whole is usually high, and therefore so is comparability of outputs.

At times there can be differences due to timing lags in the introduction of new methods or data sources. Such differences are unavoidable and kept to a minimum, but users should carefully check the age and reference periods for statistics to gauge whether comparisons are being made on a like for like basis.

Since international standards such as System of National Accounts  2008 and European System of Accounts 2010 are used in the production of the UK national accounts, estimates for Scotland should also be directly comparable with the accounts of other countries, including members of the EU and OECD. However, as with the UK, issues such as differing revisions policies and different timescales for making methodology changes mean that some care should be taken when comparing statistics between different countries.

During the coronavirus (COVID-19) pandemic, methodological differences in the measurement of non-market output have led to particular challenges in the comparability of GDP between countries. Even several years after the immediate impacts of the pandemic, it continues to have an effect on the compilation of statistics, particularly with regard to the coherence and comparability of GDP over time and between places. Some of these issues were summarised in a blog by the National Statistician relating to large revisions in ONS statistics for the UK in autumn 2023, but the message is equally applicable to statistics for Scotland or elsewhere. The key message is that comparisons between different places, including between Scotland and the UK as a whole, of how GDP changed during 2020 and 2021 in particular, along with provisional measures of how GDP compare to 2019 levels, should be made with particular caution.

One issue which is pertinent to the coherence of GDP statistics for Scotland with other statistics for Scotland or other places is the simple question of what is defined as the economic territory of Scotland?

The UK Statistics Authority monitoring report on Official Statistics in the context of the referendum on Scottish Independence (2013) highlighted the importance of clearly defining what is meant by ‘Scotland’ in the production and use of statistics. The different territorial concepts available can substantially affect analysis for Scotland.

Scottish Government GDP statistics are currently reported using two main territorial concepts:

Onshore – which relates to Scotland’s land-based territory, as defined for Eurostat regional reporting purposes and embedded in the International Territorial Level (ITL) geography, which excludes any of the UK extra-regio (offshore and overseas) economic activity in Scottish waters.

Wider economic territory (including offshore) – which is the land-based territory plus the Scottish part of UK extra-regio economic territory. This consists of offshore oil and gas extraction in Scottish waters plus a population share of UK overseas territorial enclaves such as military bases, consulates and embassies.

All estimates for Scotland’s wider economic territory produced by the Scottish Government are based on the Scottish Adjacent Waters boundary, which follows the equidistant (median) lines between Scotland, England and Northern Ireland. This boundary has been adopted by the Scottish Government, HMRC and ONS in the production of some economic, trade and public sector finance statistics for Scotland. In addition, some statistics simply allocate a population share of UK extra-regio activity to Scotland, although these are not widely used.

Every effort is made to ensure that the data series we produce are comparable over time. We produce time series for quarterly and annual GDP back to 1998 which are fully comparable to the UK and other countries. Where possible, changes to methodology are applied to the whole series to ensure this comparability is maintained.

For earlier periods, a time series of annual GDP in volume terms is produced back to 1963, which is based on historical estimates projected backwards from the current quarterly data. This historical time series has had some adjustments made to it over the years to reflect revisions made to UK GDP since its original estimation, however we do not hold the data required to re-estimate it fully and it does not have the same level of quality as the statistics for 1998 onwards.

Accessibility is the ease with which users are able to access the data, also reflecting the format in which the data are available and the availability of supporting information. Clarity refers to the quality and sufficiency of the release details, illustrations and accompanying advice.

Data from the GDP quarterly national accounts is published on the Scottish Government website at 09:30 on the day of release. GDP statistics are usually published on the Wednesday of the final week of each month (which can be the 1st or 2nd of the following month).

All publications can be found on the Scottish Government economy statistics page, or by navigating to the URL www.gov.scot/gdp. Publication dates are pre-announced in line with the Code of Practice for Statistics. The month of publication is announced a year in advance, and the specific date is announced at least a month in advance. In practice, the GDP statistics stick to the regular schedule noted above, and dates are finalised and announced at least 3 months in advance in each publication.

Data are provided in spreadsheet format. Commentary is provided in html format on the publication webpage, and in a downloadable pdf document which can include charts and diagrams alongside the text. We are continuing to adapt and refine our releases to ensure that they meet accessibility requirements.

Pre-release access to GDP statistics is now forbidden in most cases by the Pre-release Access to Official Statistics (Scotland) Act 2021. Pre-release access continues to be granted at times to staff at the Scottish Fiscal Commission to ensure that forecasts being prepared at the same time or shortly after the publication of the GDP statistics are properly informed by those statistics.