Regional GDP: Methods review

ONS introduced a new method for producing quarterly regional GDP estimates in August 2022. This includes constraining to both the Annual Regional GDP and Quarterly UK GDP figures when available.

Whilst recognised by users to be an improvement to the previous estimates, some concerns have been raised regarding the volatility of the revisions from one publication to the next. This is impacting use of the estimates as the revisions can change the direction of growth for certain regions (or industries within regions), which then impacts on policy decisions.

After four publications on the new approach, this project will review the approach and suggest possible improvements, particularly to the constraining process.

The review includes:

• Looking at the current constraining approach (to both Annual Reg GDP and Qtly UK GDP) and proposing any improvements to reduce the volatility and improve the quality of the estimates.
• Considering as opposed to constraining to publish VAT in a purer form (which would be independent to other sources) – considering the link to annual regional GDP and UK GDP.
• Reviewing the constraining steps to consider whether the outputs should constrain to both UK GDP and Annual Regional Accounts, one or neither.
• Reviewing data sources including those used for UK GDP, Scottish and NI GDP or equivalent measures. This will include e review of constraining and revisions window practices in these products.
• Considering the best way to produce and publish the estimates.

The project will help to ensure that regional GDP has the confidence of users and is able to bring maximum value.