ONS reports that ONS actually quite good at estimating GDP

Estimates rarely change that much, but have got worse since the crash.

A new study by the ONS (pdf) on the practice of revising quarterly GDP reveals that, despite some high-profile revisions, they are actually doing pretty well.

The current practice for GDP figures is to release a preliminary estimate 25 days after the quarter ends, then update it for a second estimate a month later, and release a final estimate shortly before the next quarter ends – before starting the whole process again. Even after the "final" estimate is made, there's the possibility of still more releases:

As further data become available there are potential revisions to the quarterly GDP figures in subsequent QNA releases, as well as in the annual national accounts Blue Book publication.

The Blue Book process enables annual data to be balanced at a much more detailed level and is also the opportunity for major methodological changes to be introduced.

Whenever the preliminary estimate delivers surprising news – as it did with the most recent results – there is always a rush to point out that these estimates are usually revised (as indeed they are). But the overall picture remains remarkably accurate. The following chart compares the GDP growth given in the initial estimate to the final estimate given five years later.

 

There are some pretty large changes month-to-month, but only one revision in the last 20 years which changed the big picture in any substantial way (the near-collapse in growth in early 1998 actually appears not to have occurred).

Even when the whole period is covered, the authors conclude:

In broad terms the picture of growth in GDP over the period from 1961 to 2012 quarter two is similar, irrespective of the maturity of data, although there are some exceptions. In particular the differences caused by revisions in the late 1980s were previously discussed in Brown et al, where a period of consistent upward revisions led to the Pickford Review (1989). The review implemented a number of methodological changes including the publication of a single measure of GDP.

But what about the most recent period of recession and recovery?Has the ONS got worse at making those initial estimates due to the changed economic circumstances?

Maybe.

The below chart shows the absolute revisions to GDP estimates in the first two years. The Pickford review of 1989, which changed the methodology substantially, clearly worked, reducing the mean revision from a change of at least 0.5 points to one of barely 0.2 points. But while there was a period of unprecedented accuracy in the late 1990s and early 2000s, things have got marginally worse recently – even while staying significantly better than they had been two decades before.

 

As a result, the review concludes that:

There is some evidence that in the latest periods, the size of revision has increased [although not significantly]. . .

It is possible that the assumptions and methods underpinning the early estimates of GDP may not be as robust in periods of greater volatility or at turning points in the economy as they were during the long period of stability from 1992 to 2007.

The most important thing to note, however, is that there is no significant trend for the direction of the revision. Although it's usually positive, it hasn't been recently:

 

So if you are hoping that a GDP estimate will be revised, be careful what you wish for – it may not go the way you hope.

GDP percentage growth, quarter on same quarter 1 year ago - estimates.

Alex Hern is a technology reporter for the Guardian. He was formerly staff writer at the New Statesman. You should follow Alex on Twitter.

GETTY
Show Hide image

It’s obvious why Thais can’t resist our English footballers. But they want our schools, too

The only explanation is . . . our footer must be great and exciting to watch.

At Bangkok airport, sitting in the Club lounge, as I am a toff, I spotted a copy of Thailand Tatler, a publication I did not know existed. Flicking through, I came across a whole page advert announcing that RUGBY SCHOOL IS COMING TO THAILAND.

In September, Rugby will open a prep and pre-prep department, and then, in 2018, full boarding for ages up to 17. How exciting – yet another English public school sets up a satellite in Thailand.

But I was confused. Just as I was confused all week by the Thai passion for our football.

How has it happened that English public schools and English football have become so popular in Thailand? There is no colonial or historical connection between the UK and Thailand. English is not the Thais’ first language, unlike in other parts of the world such as India and Hong Kong. Usually that explains the continuation of British traditions, culture and games long after independence.

When I go to foreign parts, I always take a large wodge of Beatles and football postcards. I find deprived persons all over the world are jolly grateful for these modern versions of shiny beads – and it saves tipping the hotel staff. No young Thai locals were interested in my Beatles bits, but boy, my footer rubbish had them frothing.

I took a stash of seven-year-old postcards of Andy Carroll in his Newcastle strip, part of a set given away free in Barclays banks when they sponsored the Premier League. I assumed no one in Thailand would know who the hell Andy Carroll was, but blow me, every hotel waiter and taxi driver recognised him, knew about his various clubs and endless injuries. And they all seemed to watch every Premiership game live.

I have long been cynical about the boasts that our Prem League is the most watched, the most popular in the world, with 200 countries taking our TV coverage every week. I was once in Turkey and went into the hotel lounge to watch the live footer. It was chocka with Turks watching a local game, shouting and screaming. When it finished, the lounge emptied: yet the next game was our FA Cup live. So I watched it on my own. Ever since, I’ve suspected that while Sky might sell rights everywhere, it doesn’t mean many other folk are watching.

But in Thailand I could see their passion, though most of them have no experience of England. So the only explanation is . . . our footer must be great and exciting to watch. Hurrah for us.

Explaining the passion for English public schools is a bit harder. At present in Thailand, there are about 14 boarding schools based on the English public-school system.

Rugby is only the latest arrival. Harrow has had a sister school there since 1998. So do Shrewsbury, Bromsgrove and Dulwich College (recently renamed British International School, Phuket).

But then I met Anthony Lark, the general manager of the beautiful resort where I was staying in the north of the island. He’s Australian, been out there for thirty years, married to a Thai. All three of his sons went to the Phuket school when it was still Dulwich International College.

His explanations for the popularity of all these British-style schools included the fact that Thailand is the gateway to Asia, easy to get to from India and China; that it’s relatively safe; economically prosperous, with lots of rich people; and, of course, it’s stunningly beautiful, with lovely weather.

There are 200,000 British expats in Thailand but they are in the minority in most of these British-style public schools – only about 20 per cent of the intake. Most pupils are the children of Thais, or from the surrounding nations.

Many of the teachers, though, are from English-speaking nations. Anthony estimated there must be about five thousand of them, so the schools must provide a lot of work. And presumably a lot of income. And, of course, pride.

Well, I found my little chest swelling at the thought that two of our oldest national institutions should be so awfully popular, so awfully far away from home . . . 

Hunter Davies is a journalist, broadcaster and profilic author perhaps best known for writing about the Beatles. He is an ardent Tottenham fan and writes a regular column on football for the New Statesman.

This article first appeared in the 27 April 2017 issue of the New Statesman, Cool Britannia 20 Years On

0800 7318496