Dataset(s): Regional gross domestic product: local authorities

We have corrected an error in the regional gross value added (GVA) deflation and chain-linking process used to compile “real” volume estimates at the International Territorial Level (ITL) 3 and local authority (LA) levels of geography. The error mainly affected the “mining and quarrying” industry, though there were also smaller errors in the “real estate” and “public administration” industries. Higher level industry aggregates that include these components were also affected to some extent, including the total economy measure.  Because the error affected the chained volume measures (CVM), it also affected the implied deflators derived from the CVM and current price data. Therefore, it fed through to the deflators used in our regional gross domestic product (GDP) volume estimates at the ITL3 and LA levels. Estimates we publish for city and enterprise regions are built from LA level components. Volume estimates for these areas were also affected, as were the 15 new ITL2 regions introduced in this year’s publication. The error did not affect any GVA or GDP estimates published for the UK or for ITL1 countries and regions, nor any current price data at lower levels.   Although the error affected all areas at the ITL3 and LA levels, in most places the effect was relatively small. However, in a few specific places, the effect on the “mining and quarrying” industry was much larger. In these areas, the error distorted the total economy aggregate and gave a misleading picture of economic growth in the region.   We have now published replacement data tables for all areas affected. We have amended the main points, Table 2 and the accompanying text in the bulletin to reflect changes to the annual growth figures for combined authorities. We apologise for any inconvenience caused. 

We have discovered an issue with the regional gross domestic product (GDP) deflation method, whereby our use of gross value added (GVA) implied deflators introduces a divergence from UK GDP growth in ‘real’ volume terms, particularly when GDP and GVA do not follow similar paths. This only impacts GDP volume measures, but it will affect all levels of geography in this publication. No GVA estimates, nor GDP in current market prices, are affected by the issue. We have now implemented an improved deflation method, which uses GVA implied deflators to deflate total GVA but separately deflates taxes (less subsidies) on products using a UK-level implied deflator, and then chain-links the two parts together to create a chained volume measure of regional GDP that is consistent with UK estimates. This method change has revised all regional GDP volume estimates in Tables 8 to 13 of the GDP datasets for International Territorial Level (ITL) regions, city and enterprise regions, and local authorities. It has also revised the main points, text and numbers in Sections 2 and 3, and text in Section 7 of the statistical bulletin.