Loretta O’Sullivan (BOI), Tom McDonnell (NERI), Eddie Casey (IFAC), Ian Power (DoF), Diarmaid Smyth (CB), Austin Hughes (KBC), Adele Bergin (ESRI), John Lawlor (DKM), Michael Connolly (CSO), Christopher Sibley (CSO), Orla McCarthy (CSO).
The large increase in GDP announced at the recent NIE press conference was the main topic of discussion. Michael Connolly described the causes of this increase, as per the explanatory note below.
http://www.cso.ie/en/media/csoie/newsevents/documents/pr_GDPexplanatorynote.pdf
There was a discussion around depreciation of capital assets and the impact on the GDP and GNP figures. CSO clarified that Net factor outflows are effectively profits after depreciation. The recent increases in capital assets have resulted in corresponding increases in depreciation. CSO explained that they use the Perpetual Inventory Method to calculate depreciation of capital assets, and although this can differ from reported company accounts, the differences should not be substantial.
There were queries about where the increase in capital assets could be seen in the data, and in particular why they were not reported as imports. The CSO explained that when there is a relocation of a company this is not counted as a “Transaction” in the statistical system, but as “Other volume changes”. Therefore the effects are seen in the balance sheet positions, for example the International Investment Position (IIP) and the Capital Stocks, but not as transactions in the Balance of Payments current account.
The manufacturing sector contributed the most to the recent increase in GDP. CSO confirmed that a large part of this was due to contract manufacturing. CSO will publish a technical note on the differences between Merchandise Trade and BOP Trade which will show this data.
Several people gave feedback on the recent figures and said that there should have been more information made available at the time of the release. It was noted that the explanatory notes were not published at the same time, and are not easy to find on the website. It was also suggested that the CSO should carry out more frequent seminars on the methodology of the statistics.
The CSO noted these suggestions but also highlighted the importance of impartiality and confidentiality when publishing data.
A high level group has been set up to recommend new indicators or more detailed levels of data publication to help users understand the Irish economy. This group is expected to convene for a short period only and to produce a report within the next couple of months. The MSLG will be consulted to give feedback on the report and any recommendations made.
The MSLG discussed what additional information they would consider valuable. Suggestions included quarterly publication of Net National Income (NNI), a quarterly breakdown of the MNE versus domestic sectors, and a breakdown of capital assets by sector on the same basis as well as by NACE sector.
However the group also warned of the risks of adopting a new indicator which may turn out to be volatile or not representative in the long run. The CSO said that they will continue to publish the full suite of economic indicators and variables, but also hope to provide additional information either through new indicators, or through providing more detail/breakdown on existing indicators.
The sector accounts will be published tomorrow, 28th July.
Balance of Payments will be publishing new technical notes on the impact of PLCs and the differences between Merchandise Trade and BOP/National Accounts Trade within the next couple of weeks.
CSO to consider organising a series of seminars on macroeconomic statistics.
CSO to investigate adding links to technical notes in the relevant releases.