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Information Note on the Implications of COVID-19 on the Quarterly National Accounts - Quarter 4 2021

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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 were lower than normal in the October to December 2021 period. For Industry, the response rate for the October, November and December 2021 Industrial Production & Turnover (IPT), was lower in certain NACE groups than normally expected due to operational difficulties faced by businesses, however the overall response rate was broadly comparable to the average response rate for IPT. The response rates for the October, November and December 2021 Retail Sales Index (RSI) surveys had however recovered compared with the months of the Q2 and Q3 2020 reference quarters and were broadly similar to pre-pandemic levels. It is hoped that businesses affected due to temporary closure and the ongoing COVID difficulties 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.

For more see the CSO Information Note on the Implications of COVID-19 on Retail Sales Index - December 2021 and the CSO Information Note on the Implications of COVID-19 on the Industrial Production and Turnover Index - December 2021.

Seasonal Adjustment
The March 2020 figures, at the beginning of the period affected by COVID, and those for subsequent months, have been an exception to existing seasonal patterns. It must be recalled that the most severe and acute impacts of the COVID-19 restrictions affected Q2 2020 but only partially affected the month of March 2020 and therefore the full reference quarter Q1 2020 was not impacted by the full severity of the pandemic (in actuality it significantly affected approximately 20% of the 91 days of the quarter). Seasonally adjusting the Quarterly National Accounts remains challenging though the scale and shape of the impact COVID-19 has on the time series has become better understood over time.  For the time being the reference quarters Q1 to Q4 2020, Q1 2021 Final, Q2 2021, Q3 2021 and Q4 2021 have been modelled as additive outliers (AO) which will be reviewed as required. We have tested the data and treated Q1 to Q4 2020, Q1 2021 Final, Q2 2021, Q3 2021 and Q4 2021 as additive outliers for certain sectors and other contributing elements to the accounts but not all. This treatment for seasonal adjustment purposes reflects the volatile nature of certain economic sectors more impacted by COVID than others, such as retailing & wholesaling, and the arts & entertainment sectors 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 Q4 2021 QNA, guidance issued by Eurostat has been followed as and where appropriate, specifically in relation to the compilation of Non-Market Output estimates. See Eurostat Methodological note - Guidance on Quarterly National Accounts (including flash) Estimates in the Context of the COVID-19 Crisis (PDF) and Eurostat Methodological note - Guidance on non-Market Output in the Context of the COVID-19 Crisis (PDF).

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.

COVID-19 Restrictions to December 2021
Many establishments were open for either a part of or most of March 2020 but were closed for late-March, April 2020 and May 2020. Many retail outlets were still closed in May 2020, with only a small number of sectors, classified as essential retail outlets on 27 March 2020, allowed to open their shops for the whole of the month. On 18 May 2020 Phase 1 of the Roadmap for Reopening Society and Business commenced with further sectors free to reopen for business. These businesses included Opticians/optometrists; Sale, supply and repair of motor vehicles, motorcycles and bicycles; Hardware stores, builders' merchants and stores selling supplies and tools essential for gardening/farming/agriculture; Office products and supplies; Electrical, IT and phone sales, repair and maintenance services. On 8 June 2020 Phase 2 of the Roadmap for Reopening Society and Business commenced with all remaining retail sectors free to reopen for business. Most remaining retail outlets were permitted to reopen from 8 June 2020 while Shopping Centres were allowed to reopen on 15 June 2020. Businesses that reopened on 29 June 2020 included pubs serving food, cafés, restaurants, hotels, hairdressers, beauty salons and tourist attractions.

Level 3 restrictions were introduced in certain counties during the course of September 2020. On 6 October 2020, the rest of Ireland joined Dublin and Donegal on Level 3 under Ireland’s Plan for Living with Covid-19. From midnight Thursday, 15 October 2020, the counties of Cavan, Donegal and Monaghan were placed on Level 4. At midnight Wednesday 21 October 2020, the whole country was placed on Level 5 of Resilience and Recovery 2020 - 2021: Plan for Living with COVID-19 and these restrictions were to remain in place for a period of six weeks. The Government published a list of essential retail and services that could continue to operate under the new restrictions. These were largely lifted on 1 December 2020 when the country returned to Level 3 with some restrictions still in place. As a result, non-essential retail outlets, hairdressers, gyms, leisure centres, museums, galleries, libraries, cinemas and places of worship reopened on 1 December 2020. Restaurants and gastropubs were allowed to reopen on 4 December 2020 for indoor dining. Wet pubs and bars which did not have a food preparation area on the premises were not allowed to reopen. On 22 December 2020, the Government agreed to move the entire country to Level 5 lockdown restrictions with a number of adjustments from Christmas Eve until 12 January 2021 at the earliest.

On 30 December 2020, the Government agreed to move the entire country to full Level 5 lockdown restrictions from midnight until what was to be 31 January 2021 at the earliest (this latter date of 31 January 2021 was subsequently reviewed and extended twice, on 26 January [until 5 March 2021] and on 23 February [Level 5 restrictions to remain in place until 5 April 2021 at the earliest].). All non-essential retail and services had to close from 6pm on 31 December 2020. People had to stay at home except for work, education or other essential purposes. Level 5 restrictions remained in place from 31 December 2020 and for the entirety of the Q1 2021 Final reference quarter. Into early 2021, further measures were announced on 6 January including the prohibition of click-and-collect services for non-essential retail, however, they were allowed to continue on a delivery basis only. On 6 & 7 January, the Government announced the closure of all schools with a return to homeschooling, also the closure of all non-essential construction sites, with certain exceptions, at 6pm on 8 January 2021. On 1 March 2021, Special Needs Schools re-opened, Junior & Senior Infants, 1st & 2nd classes in Primary Schools resumed, and Leaving Certificate classes returned to school. On 8 March 2021, the Early Childhood Care & Education (ECCE) programme resumed and ECCE-age children returned to school. On 15 March 2021, 3rd to 6th class Primary pupils returned to school, 5th year Secondary students also returned. On 29 March 2021, Early learning and school-aged childcare re-opened.

On 30 March 2021 the Government announced a phased easing of Level 5 restrictions beginning from Monday 12 April 2021 with people allowed to travel within their county, two households allowed to meet socially outdoors, people who were fully vaccinated against COVID-19 allowed to meet other fully vaccinated people indoors, and the resumption of all residential construction projects from that date. From 26 April 2021 outdoor sports facilities and visitor attractions could reopen. From 4 May 2021 construction activity fully reopened, also museums and art galleries. From 10 May 2021, inter-county travel was allowed, click-and-collect retail services resumed and three households were permitted to meet outdoors and a vaccinated household to meet an unvaccinated household indoors. Restrictions related to non-essential retail and hairdressing services were gradually lifted during May 2021 with all non-essential retail allowed to fully reopen on 17 May. All sectors except for ‘wet’ pubs who lacked outdoor arrangements were open. From 2 June 2021, Hotels, B&Bs, self-catering and hostels could reopen. From 7 June 2021, sports venues could resume, and outdoor restaurant and bar services could recommence. Also from this date the numbers of guests attending wedding celebrations/receptions could increase to 25 and visitors from one other household could be permitted in private homes. Additionally, cinemas, theatres, swimming pools, gyms and leisure centres could reopen. Outdoor sports matches, amusement parks theme parks and funfairs could also recommence. The numbers permitted at organised outdoor events could increase to a maximum of 100 for a majority of venues, with a maximum of 200 for outdoor venues with a minimum accredited capacity of 5,000.

From 26 July 2021 indoor dining in pubs and restaurants resumed for those fully vaccinated and people who had recovered from COVID. On 31 August the Government announced a further reopening plan with all remaining COVID restrictions to be lifted by 22 October 2021. From 1 September public transport operated at 100% full capacity, with the requirement to wear masks remaining in place. From 6 September 2021, outdoor sports events could accommodate 50% capacity in stadia, indoor venues could operate at 60% capacity for events to be attended by those who were vaccinated, while outdoor events could operate at 75% capacity for those vaccinated. Live music performed indoors at weddings and in bars could also resume. From 20 September 2021, a phased return to the workplace could commence. Indoor after-school activities along with indoor sports also resumed from this date.

Nightclubs were allowed to reopen as planned on 22 October 2021, however due to a significant increase in daily COVID cases in October 2021 vaccination certificates, social distancing and mask wearing measures remained in place. On 1 December 2021 the first case of the Omicron variant was confirmed in Ireland. On 3 December 2021 certain restrictions were re-imposed with nightclubs to close, bars and restaurants to revert to a maximum of six adults seated per table and no multiple table bookings allowed, indoor cultural and sporting events were to operate at 50% capacity, a maximum of four households were allowed to meet indoors and the requirement of vaccination certificates was extended to gyms, leisure centres and hotel bars. Cases of the Omicron variant continued to increase rapidly during the month of December until the end of the year (peaking in early January 2022). According to the Health Protection Surveillance Centre a fifth wave of COVID-19 had arrived in Ireland on 19 December 2021. Further COVID-19 restrictions, announced by Government on 17 December 2021, were introduced on 20 December 2021 for the Christmas period, with an 8 p.m. closing time for bars, restaurants, live events, cinemas and theatres but excluding take-away or delivery services.  In relation to events happening earlier in the day, attendance was limited to 50% of venue capacity or 1,000 attendees, whichever was the lower. This restriction also applied to cinemas. This requirement did not however affect religious, educational or normal workplace business activity, nor business events (for example: conferences, trade fairs). Attendance at outdoor events, including entertainment, cultural, community and sporting events, was limited to 50% of venue capacity or 5,000 attendees, whichever was the lower.  Wedding receptions could take place with a capacity limit of 100 guests and continue after 8 p.m. though midnight closing time still applied. On 19 December 2021, Omicron had become Ireland's dominant variant after it was confirmed as the cause of 52% of COVID cases. 

Data collection proved challenging for the Q4 2021 reference quarter due to certain restrictions remaining in place and will continue to do so in the COVID environment.

Thanks to Respondents
The CSO wishes to thank all those households and enterprises who supplied their data for the months of October, November and December 2021, as well as for the Q1 to Q4 2020 and the Q1 2021 Final, Q2 2021 & Q3 2021 reference quarters, and encourage them to continue to do so for subsequent months, even for instance where turnover for many enterprises may 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 Q1 2022. The Q1 2022 (Provisional) QNA is planned for publication in the first week of June 2022.

CSO publication, 04 March 2022, 11 a.m. GMT