Information Note on the Implications of COVID-19 on the Quarterly National Accounts - Quarter 4 2020

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 2020 period. For Industry, the response rate for the October, November and December 2020 Industrial Production & Turnover (IPT), was lower in certain NACE groups than normally expected, however the overall response rate was broadly comparable to the average response rate for IPT. The response rates for the September, October & December 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 the corresponding months of 2019. 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.

Imputation
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 2020 and the CSO Information Note on the Implications of COVID-19 on the Industrial Production and Turnover Index - December 2020.

Seasonal Adjustment
The March 2020 figures, 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 but only partially affected the month of March 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 will remain challenging until the scale and shape of the impact COVID-19 has on the time series is better understood. For the time being the Q1, Q2, Q3 and Q4 2020 reference quarters have been modelled as additive outliers (AO) which will be reviewed as required. We have tested the data and treated Q1, Q2, Q3 and Q4 2020 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 2020 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).

Weights
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.

October-December 2020
Many establishments were open for either a part of or most of March but were closed for late-March, April and May. Many retail outlets were still closed in May, with only a small number of sectors, classified as essential retail outlets on 27th March, allowed to open their shops for the whole of the month. On 18th May 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 8th June 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 8th June while Shopping Centres were allowed to reopen on 15th June. Businesses that reopened on 29th June 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. On October 6th, the rest of Ireland joined Dublin and Donegal on Level 3 under Ireland’s Plan for Living with COVID-19. From midnight Thursday, 15th October, the counties of Cavan, Donegal and Monaghan were placed on Level 4. At midnight Wednesday 21st October, 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 1st 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 1st December. Restaurants and gastropubs were allowed to reopen on 4th December 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, 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 30th December 2020, the Government agreed to move the entire country to full Level 5 lockdown restrictions from midnight until what was to be 31st January 2021 at the earliest (this latter date was subsequently reviewed). All non-essential retail and services had to close from 6pm on 31st December. People had to stay at home except for work, education or other essential purposes. Into early 2021, further measures were announced on 6th January including the prohibition of click-and-collect services for non-essential retail, however, they were allowed to continue on a delivery basis. Data collection proved challenging for the entirety of the Q4 reference quarter 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, as well as for Q1, Q2 and Q3, 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 2021 which was affected by the restrictions announced on 30th December. The Q1 2021 QNA is planned for publication in the first week of June 2021.