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Information Note - Implications of COVID-19 on the Quarterly National Accounts

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Data for the Quarterly National Accounts (QNA) are collected from a broad range of sources across all sectors of the economy. The results are based on release data compiled directly by CSO, administrative data sources and responses to CSO surveys. Despite the current difficult circumstances relating to the COVID-19 pandemic, many data suppliers have continued to provide us with this statistical information and we wish to thank all survey respondents for their continued support.

However, due to the temporary closures relating to COVID-19 and the difficulties faced by all participants in the economy, including businesses, households, government, charities, not-for profit institutions and other economic entities, the response rate for certain CSO surveys was lower than normal in March 2020, for example the response rate for the March Retail Sales Index (RSI) survey was about five percentage points lower than would normally be the case. The March RSI response covered about 53% of total retail sales in the economy. For Industry, the response rate for the March 2020 Industrial Production & Turnover (IPT), was lower in certain NACE groups than normally expected. It is hoped that businesses will be in a position to provide CSO with the data at an appropriate future date.

While the overall Personal Consumption Expenditure (PCE) aggregate remains a robust indicator of trend, owing to the COVID related temporary closures, classification of PCE at the sub-aggregate level has proved more difficult due to more limited data availability.  The unavailability of certain normally available data source breakdowns between goods and services, with the consequent need to examine and utilise supplementary alternative data sources such as Central Bank Credit and Debit Card data, has led to the goods and services sub-breakdown estimates being of somewhat lower reliability than usual.  This circumstance will be kept under continual review and as and when further data observations become available in the months and quarters ahead, from traditional sources as well as from new sources such as the Credit and Debit Card data, revisions to the sub-element breakouts will take place accordingly that should improve the quality of the sub-breakdown estimates. Additionally, processes for capturing new PCE economic activity emerging as a result of the COVID-19 impact are under development and being kept under constant review.

A CSO Information Note on the Implications of COVID-19 on Retail Sales Index March 2020 is available here.

A CSO Information Note on the Implications of COVID-19 on the Industrial Production and Turnover Index - March 2020 is available here.

Seasonal Adjustment
The March figures, and subsequent months, are an exception to existing seasonal patterns. However it must be recalled that the most severe and acute impacts of the COVID-19 restrictions only partially affected the month of March and therefore the full reference quarter Q1 2020 was not impacted by the severity of the pandemic (in actuality it significantly affected approximately 20% of the 91 days of the quarter). Seasonally adjusting the Quarterly National Accounts will be challenging until the scale and shape of the impact COVID-19 has on the time series is better understood.  For the time being Q1 2020 has been modelled as an additive outlier (AO) which will be reviewed as required. We have tested the data and treated Q1 as an additive outlier for certain sectors and other contributing elements to the accounts but not all (approximately one quarter of all Q1 time series compiled for national reporting and reporting to Eurostat have been treated as an AO). This treatment for seasonal adjustment purposes reflects the volatile nature of certain economic sectors more impacted by COVID than others, such as retailing and wholesaling, and shall 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.

Eurostat Guidance
In compiling the Q1 2020 QNA, guidance issued by Eurostat has been followed as and where appropriate, specifically in relation to the compilation of Non-Market Output estimates

Index weights upon which most Fixed Base, Previous Year’s Prices and Chain Linked data are based in the Quarterly National Accounts are to base year 2015 (2015=100) and consequently may not reflect the full and entire current distribution of economic activity in certain sectors that has arisen due to the COVID-19 crisis.

April 2020
Many establishments were open for either a part of or most of March. Data collection for April will prove to be more challenging as the range of outlets open for business and other economic activities has diminished to only those deemed to be essential services, such as supermarkets, other food outlets, fuel retailers and pharmacies.

The CSO wishes to thank all those households and enterprises who supplied their data for March as well as the first two months of the quarter and encourage them to continue to do so for April and subsequent months, even for instance where turnover for many enterprises will be nil. Such information is still needed to measure the precise impact of the crisis on the economy. The CSO will also continue to monitor a range of supplementary source information, such as banking credit and debit card data referenced above, to derive the best estimates for economic growth in Q2 2020. The Q2 QNA is planned for publication in the first week of September 2020.