European Central Bank – DG Statistics Revisions in euro area GDP and retail trade: Reliability, timeliness and infra-annual distribution Heinz Dieden European Central Bank – DG Statistics OECD Short-Term Economic Statistics Working Party (STESWP); Paris, 23-24 June 2008

Introduction Key elements Indicators Euro area aggregates 1 Introduction Key elements Reliability/revisions Timeliness Infra-annual distribution of revisions Indicators GDP volume growth (q-o-q); sa & wda Constant retail trade turnover (m-o-m); sa & wda Euro area aggregates GDP: 2000 Q1 until 2006 Q4 Retail trade 2000 January until 2007 April

Dataset Real-time database Timeliness 2 Dataset Real-time database ECB’s revision database: from June 2001 onwards OECD’s MEI Release and Revisions database ECB’s Monthly Bulletin Timeliness Calendar days 30 days per month

Revision indicators Size of revisions Direction/sign of revision 3 Revision indicators Size of revisions Average absolute revisions Range of revisions Direction/sign of revision Average revision Changes in sign Upward/downward revisions Volatility of revisions Standard deviation

GDP Flash/first estimate versus second estimate 4 GDP Flash/first estimate versus second estimate Flash estimate from 77 days to 44 days Flash/first estimate versus annual update Annual update = estimate available in the 3rd quarter of the following year Flash/first estimate versus current estimate Not full cycle of revisions for more recent data

Revisions for GDP 5

Evolution of GDP flash estimates 6

Timeliness and average of revisions (GDP flash vs current estimate) 7

Summary for GDP revisions 8 Summary for GDP revisions Euro area revisions are small and estimates are stable Size: 0.06ppt (flash), 0.09ppt (annual), 0.12ppt (current) Sign: almost negligible (0.01ppt, 0.0 ppt and 0.0ppt) Volatility: std of 0.15 for annual update Timeliness considerable improvements from 70 to 44 days Flash estimate did NOT increase revisions, rather opposite Infra-annual distribution Revisions differ across quarters Higher revisions mostly in 1st half of the year

Retail trade Flash estimate since January 2004 Flash/first estimate 9 Retail trade Flash estimate since January 2004 Two period: before and after flash Flash/first estimate versus 1 month later versus 2 months later versus 1 year later versus current estimate

Evolution of euro area retail trade growth 10

New: Timeliness and average revisions for euro area retail trade turnover 11

Summary for retail trade revisions 12 Summary for retail trade revisions Periods with rather high (early-2000, turn of 2001; mid-2002 until mid-2004) and with smaller revisions Size: large before the flash (0.55ppt (annual)) significant thereafter (0.36ppt (annual)) Sign: small, but changed direction prior (-) and after (+) flash Volatility: decrease since flash from 0.71 to 0.43 (1 year later estimate)

Summary for retail trade revisions (cont’d) 13 Summary for retail trade revisions (cont’d) Timeliness considerable improvements from 70 to 35 days Initial problems, but flash did NOT increase revisions Infra-annual distribution No general rule, but pattern differ across months Somewhat higher in 1st half of the year

14 Conclusions/caveats Revisions in euro area aggregates relatively small for GDP and significant for retail trade Improved timeliness did not lead to higher revisions Infra-annual revisions not equally distributed Small sample (from 2000 only) No full revision cycle for ‘current’ estimates National revisions tend to outweigh each other Changes in country coverage not considered

Thank you for your attention Questions and comments?