Transcript 460Kb - Office for National Statistics

ONS Economic Forum
Email: [email protected]
Twitter: @ONS
#ONSeconomy
Website: http://www.ons.gov.uk/ons/about-ons/getinvolved/events/events/economic-forum/index.html
8 October 2014
1
Developments in price statistics
Derek Bird, Head of Prices
ONS Economic Forum: 8 October 2014
2
Overview
o Consumer prices
o Business prices
o House prices
o Construction prices
3
Consumer prices
o Governance
o Owner Occupiers’ Housing costs update (CPIH
impact)
o Education fees, expected impact this year
o Johnson review
o International developments - OOH NA, scanner
data (poss), compliance issues (poss)
o Price quote collection contract update
4
Governance
•
Smith Review, published in Feb 2014, recommended creation of two
advisory panels to replace CPAC
•
Advisory Panel on Consumer Prices (Stakeholder)
•
•
Standing committee to advise the National Statistician on the uses and applications of
price indices
•
Chaired by an independent expert appointed through open competition
•
Membership of the Panel (ideally 8-10) should reflect a wide range of user interests
Advisory Panel on Consumer Prices (Technical)
•
should provide advice on all technical aspects of price indices as requested by ONS
and/or the Stakeholder Panel
•
Chaired by ONS Executive Director for National Accounts and Economic Statistics
(Nick Vaughan)
•
Membership will be a small group (5-6) of experts in price index methodology and
should preferably include some international experts
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Owner Occupiers’ Housing costs in CPIH
• ONS and VOA have completed work looking into OOH
component of CPIH
• Growth in private rents now more responsive to recession
• 70% of rent updates result in no price change
• Still at odds with HPI
• Impact on CPIH has an upper bound of 0.2 on 12 month growth
rate
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OOH - possible next steps
• Recalculate CPIH back to 2005
• Introduce any changes as part of the annual update process (in
March 2015)
• Low weight of private rents index (uses VOA data and affects
CPI and RPI) means impact is not material, so no intention to
revise in any aggregate
• Complete additional analyses into relationship between OOH
and growth rates implied by estimates of average rental prices
(official and market sector data providers)
• QA work and complete system documentation
• Explanatory article explaining the proposed changes to be
published
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Education fees
• Changes in university tuition fees have significant impact on
inflation. Changes in fees for undergraduate courses in England
introduced in a staged way:
• 2012/13 academic year, students beginning their studies could
be charged up to a maximum fee of £9000 for first year courses
(compared with a maximum of £3375 in 2011/12). Fees for other
years stayed on the lower fee structure (max fees increased
from £3375 to £3465).
• 2013/14, maximum fees for second year courses increased to
the new fee structure, fees for first year courses were already at
the higher level and fees for third and fourth year courses stayed
at the lower level.
• 2014/15, maximum fees for third year courses are set to
increase to the new structure
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Education fees
• A simplified example using stylised data:
First year course
Second year course
Third year course
2011/12
3000
3000
3000
2012/13
9000
3000
3000
2013/14
9000
9000
3000
2014/15
9000
9000
9000
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Education fees
Impact of tuition fees on the CPI - a stylised example
Student
Numbers
Year
(thousands)
2011 No students on higher fees
0
All students
420
Total
420
Contribution
Expenditure Average Annual to all items
Fee (£)
(£m)
fees £ growth %
CPI
9000
0
3000
1260
1260
3000
2012 1st year students
2nd & 3rd students
Total
140
280
420
9000
3000
2013 1st & 2nd year students
3rd year students
Total
280
140
420
9000
3000
2014 All students
No students on lower fees
Total
420
0
420
9000
3000
1260
840
2100
5000
67
0.40
2520
420
2940
7000
40
-0.16
3780
0
3780
9000
29
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-0.07
Johnson Review
• Review of the range of consumer price statistics, led
by Paul Johnson, Director of IFS
• The Review has been looking at:
o The range of measures of inflation
o The Cost of Living concept
o Sources of data on prices and weights
o Other statistical and measurement issues
• Due to report by end 2014
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International developments
• Current active development issues include
• the use of point of sales scanner data for price collection and
expenditure weight aggregation,
• automatic collection of data from websites and
• improving collection methods for services such as flights and
packages holidays
• Eurostat undertaking quinquennial review of the UK’s HICP (aka
CPI) for compliance with regulations
• ONS working on one known area - the collection of prices across
the month (ie temporal sampling)
• Other areas emerging from the compliance review will be
considered alongside the recommendations from the Johnson
review
• ONS will consult with users around any changes
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Price quote collection contract
• New contract to collect consumer price quotes begins
January 2015
• TNS will deliver the service to collect prices in the
field
• Change in technology improves:
• quality assurance process
• security of data
• meta data
• user functions (maps etc)
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Business prices
o ONS established a Deflator Improvement branch
ahead of Barker/Ridgeway review
o Barker/Ridgeway review endorsed ONS’s
improvement programme for SPPIs and trade
price indices
o Recommended improvements to construction
prices (currently produced by BIS)
o Priorities for SPPI improvement set with respect to
National Accounts requirements
o Services Turnover Survey in train – results used
to update industry structures and identify new
‘products’
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House prices
o ONS has launched a consultation on the
methodology for a definitive house price index runs until 12 December
o Approach agreed between ONS, Land Registry,
Registers of Scotland and Land and Property
Services, Northern Ireland
o Aims to extend coverage to include cash sales
and improve hedonic model with additional
attributes
o Trends in the UK housing market – article
published 22 September
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Construction prices
•
•
•
•
•
Background
What’s happened so far?
Summary of proposed change
Where will this show up in ONS outputs?
Timescale
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Background
• Construction output currently deflated using
output prices created from lagged, weighted
tender price indices, produced by BCIS under
contract from BIS
• In 2013, BIS awarded the contract to Aecom
in July 2013, who subcontracted back to
BCIS while new methodology was developed
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What’s happened so far?
What
Date
Contract for production of construction prices indices was July 2013
let to Aecom (formerly Davis Langdon).
BIS chaired a stakeholder meeting where the need to
change the methodology was discussed.
October 2013
Aecom presented proposal for input price and output
price indices to ONS.
Early June
2014
Presented proposed methodology and explanation of
where construction price statistics were used in ONS
outputs with BIS and Aecom at joint seminar.
19 June 2014
Consultation on proposed methodology.
7 – 28 July
2014
Interim response published, does not provide detail of
proposed methods.
15 September
2014
Refinement of proposed methodology.
Ongoing
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Proposed change
• Aecom have developed a new methodology
for input costs, using a mixture of materials,
labour and equipment.
• These will be converted to output costs using
a market indicator.
• These data will cover time periods back to
2005, existing deflators linked on prior to
then.
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Outputs affected
• Output and new orders in the construction
industry
• Output approach to measuring GDP
(including preliminary estimate)
• Gross fixed capital formation (those elements
relating to construction)
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Timescale
What
Date
Article on the proposed methodology and the impact 14 November 2014
that this will have on the data
Output in the construction industry using new
deflators for the first time, from January 2013
onwards
12 December 2014
New orders in the construction industry all time
periods
12 December 2014
2nd estimate of Q3 GDP from Q1 2013 onwards
23 December 2014
GDP prior to 2013 (quarterly national accounts
consistent with Blue Book 2015)
30 June 2015
Output in the construction industry quarterly data
2005 – 2013
30 June 2015
Output in the construction industry monthly data
10 July 2015
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