Background Notes

Gross Value Added at Constant Basic Prices Nace Rev 2 

This release provides gross value added at current basic prices and constant basic prices (chain linked and referenced to 2018) for the economy divided into two sectors, namely

(a)       the economic sectors dominated by Foreign-owned Multi National Enterprises (MNEs)

            and

(b)       all other remaining sectors.

Gross value added at basic prices is measured as the difference between out­put at basic prices and intermediate consumption at purchasers’ prices.

The sectoral data underlying the aggregates in the release are the same as those used for

1. Gross Value Added for Foreign-owned Multinational Enterprises and Other Sectors Annual Results 2019 (CSO StatBank Table N1923)
   
   and
   
   
2. National Income & Expenditure 2019 (NIE 2019) Table 4 (CSO StatBank Table N1904), which gives a breakdown of the economy at Constant Basic Prices by 10 principal economic sectors (Nace Rev.2 A10) and NIE Table 22 (CSO StatBank Table N1922) which illustrates a 37 sector breakdown of the Irish economy.

The correspondence with the relevant A10 sections of NACE Rev.2 is as follows:

National accounts are compiled in the EU according to the European System of National and Regional Accounts (ESA) framework. In 2014, the new ESA 2010 framework replaced the ESA 95 version and all EU member states were required to adopt ESA 2010 by September 2014.  ESA 2010 is the European version of the current UN mandated international standards for national accounts statistics, the System of National Accounts (SNA) 2008. The results for all years in this release are published on an ESA 2010 basis.

Nace classification 

In compliance with EU regulations the contents of the sectors in this release conform to the Nace Rev. 2 system which corresponds with the UN International Standard Industrial Classification (ISIC Rev 4).

For the Foreign-owned MNE dominated sector and ‘Other’ sector variables set out in Tables A and B of this release, the following is the correspondence with the relevant NIE and Nace Rev. 2 sectors:

For further information on the Nace Rev. 2 classification of industrial activity, please click here.

Seasonal Adjustment

Seasonal adjustment is conducted using the indirect seasonal adjustment approach. This approach is in line with CSO’s Policy on Seasonal Adjustment and Eurostat’s Recommendations on Seasonal Adjustment. Under this indirect approach, individual time series are independently adjusted at the component level.  These individual series are then aggregated to compute seasonally adjusted results for Total Gross Value Added at Current Prices or Constant Prices respectively. This indirect approach is applied to the Foreign-owned MNE dominated sector, the combination of all other remaining non-MNE dominated NACE sectors (i.e. the ‘Other’ sector) and the seasonally adjusted values for the total economy are then derived as the sum of the seasonally adjusted components. On this account, the sum of the seasonally adjusted components of the Foreign-owned MNE dominated and ‘Other’ sectors add to the respective seasonally adjusted total economy series. As part of the seasonal adjustment process, ARIMA models have been identified for each series based on unadjusted data spanning Q1 1995 to Q1 2020. These models are then applied to the entire series (Q1 1995 to Q2 2020). Seasonal factors and the parameters of the ARIMA models will be updated each quarter.

COVID-19 note 

Seasonally adjusting the Gross Value Added for the Foreign-owned Multinational Enterprises and Other Sectors will continue to be challenging until the full scale and shape of the impact COVID-19 has on the time series is better understood.  Based on Eurostat guidance, Q1 and Q2 2020 have been modelled as additive outliers (AO) which will be reviewed as required. This treatment for seasonal adjustment reflects the volatile nature of economic sectors experiencing a greater COVID impact, such as the retail and wholesale sectors, and will be kept under review going forward as required. Users should be aware that as further data observations become available in the months and quarters ahead, revisions to the seasonal adjustment models may result in revisions to the quarterly seasonally adjusted series.

The adjustments are completed by applying the X-13-ARIMA model, developed by the U.S. Census Bureau to the unadjusted data.  This methodology estimates seasonal factors while also taking into consideration factors that impact on the quality of the seasonal adjustment such as:

• Calendar effects, e.g. the timing of Easter,
• Outliers, temporary changes and level shifts in the series.

For additional information on the use of X-13-ARIMA see here.

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