Regional accounts

Name: Regional accounts
Topic: National accounts and business cycles

Division for National Accounts

Regional figures

Regional accounts for year t -2 published in December in year t. Several of the statistical sources in the final national accounts have relatively long processing time. This also means that it takes a relatively long time before the regional accounts are finalized.

Eurostat

The purpose of the national accounts statistics by county is, in broad terms, to show how the national economic activity measured in the national accounts is spread on the various counties.

The Norwegian National Accounts, including the regional accounts, are based on the international recommendations in the System of National Accounts (SNA), published by UN, OECD, IMF, EU and the World Bank and The European System of national and regional Accounts (ESA). ESA is based on SNA, but focus on the conditions and requirements for data in the European Union. Pursuant to the EEA agreement, Norway is obliged to follow the recommendations in ESA.

Since one objective of the national accounts is to provide a picture of the development over time which is as correct as possible, it is not possible to introduce major changes from one year to another. With different time intervals, it will therefore be necessary to carry out major revisions of the national accounts figures, so-called main revisions, in order to introduce adaptations due to new international recommendations or introduce new levels based on new statistical sources. As a part of these main revisions the time series are revised so that the revised national accounts can give a consistent picture of the economic development over time.

Statistics Norway has recently carried out a new main revision published in November 2014, to incorporate updated international recommendations in 2008 SNA and ESA 2010. Changes due to this main revision are described, among else, in the article Main revision 2014. Planned changes in the national accounts statistics.

From the Norwegian national accounts were established and until today, Statistics Norway has carried out 6 main revisions. The publication History of national accounts in Norway. From free research to statistics regulated by law provides more information about the history of national accounts in Norway, including main revisions.

Eurostat, research institutes, ministries, regional politicians, the media etc.

No external users have access to the statistics and analyses before they are published and accessible simultaneously for all users on ssb.no at 08.00 am. Prior to this, a minimum of three months' advance notice is given in the Statistics Release Calendar. This is one of Statistics Norway’s key principles for ensuring that all users are treated equally.

The regional accounts are based on the annual national accounts (the real accounts). Other parts of national accounts, like the annual non-financial sector accounts, the quarterly national accounts, and various satellite accounts (environment, tourism, health, non-profit institutions) are based on and consistent with the annual NA. The Norwegian Balance of Payments (BoP) is also an integrated system in the Norwegian system of national accounts, and the BoP figures are fully consistent with other NA figures. Updated figures from the regional accounts are therefore consistent with updated figures from all these parts of the national accounts.

The national and regional accounts are based on various statistical sources. The source statistics may not use the same definitions or groupings as the national accounts. As a result, figures in the source statistics may be adapted or corrected before use in the national and regional accounts. Published figures in the source statistics of certain industries may therefore not correspond to published figures in the regional accounts.

The scope of the national accounts is defined in international guidelines in the 2008 System of National Accounts (2008 SNA), published by the UN, OECD, IMF, World Bank and the European Commission, and the European System of National and Regional Accounts 2010 (ESA 2010). A chapter in ESA 2010 is dedicated to regional accounts. In addition there exist various documents regarding methods for establishing regional accounts.

The Norwegian counties correspond to the NUTS 3 (Nomenclatura of Territorial Statistical Units) classification of the European Union.

The statistical unit in the accounts should - as far as possible - be the establishment, i.e. the local kind of activity unit (LKAU). The general principle for location, the resident principle, is that all production and intermediate consumption should be allocated to the region where the producer is resident. If an enterprise has local kind of activity units in several regions, each of them should receive the value added in the region where the LKAU is located. Similarly, Gross Fixed Capital Formation (GFCF) is allocated to the region where the LKAU which manage the capital is located. Consumption is allocated to the regions where the consumers reside.

The regional accounts are composed by a system of distribution keys, which allocate the flows of the national accounts figures for the total economy to the regions. The system of distribution keys contains structural statistics and industry-related statistics which are allocated to the counties. Other sources of distribution keys are sales figures from the Central Register of Establishments and Enterprises, wage totals from End of the Year Certificate Register, the State Central Register of Government Employees (SST), and KOSTRA (Municipality-State-Reporting). In addition other information outside Statistics Norway is used when available. These statistical sources are adjusted to fulfil the international requirements of regional accounts.

For information about data sources see the section above.

How to compile the gross product? Value added for a market-oriented industry can either be calculated by deducting intermediate consumption from production, or by adding labor costs, depreciation , taxes on production , net and operating profit.

Value added = Production - Intermediate consumption
Value added = Compensation of employees + Depreciation + Taxes on production , net operating income + .

For general government estimated value added is slithly different. Operating income in the general government is by definition zero, and value added is calculated as follows :

Value added general government = Wages and salaries + Depreciation + Taxes on production , net

To compare the level of the gross product ( GDP) per county makes little sense, given that there are large differences in counties' population size. To get a better basis for comparison, we calculate either GDP per capita or per worker. Commuting across regions, such that a number of employees in Oslo live outside the county, means that GDP per capita can be difficult to compare. Interest should also be paid to the figures showing GDP per worker.

Household disposable income is calculated as the sum of household income adjusted for the sum of household spending. Household disposable income is allocated to the region of the consumers' residence. The source is mainly income statistics and tax statistics. Household consumption will have the same key distribution as disposable income.

In the detailed industrial figures, figures for groups of less than three units and other cells are set to zero in order to avoid identification of the figures in the calculation of residuals.

The main focus in the regional accounts is on the regional structure, while there are less focus on time series. The regional accounts are, however, updated annually, based on final annual national accounts. As a part of main revisions of the national accounts, the national accounts time series are revised backward. Previous published regional figures are, however, normally not revised as a part of main revision of the national accounts. Regional figures for previous years may therefore not necessarily be compatible with updated national accounts time series.

Because of the main revision of the national accounts published in 2014 the updated regional accounts for 2011 and 2012 published in December 2014 is not directly comparable with previous published regional figures for earlier years.

The distribution keys in the regional accounts are uncertain. In addition there is uncertainty in the statistical sources in the national accounts. The compilation of annual national accounts is based on many statistical sources. The sources are either survey data from establishments, enterprises and households, or data from registers. National accounts statistics reflect the inaccuracy that underlies the statistical sources and methods of compilation. Weaknesses and inaccuracy in the statistical sources are usually described in the documentation of the relevant sources.

Since the national accounts are an integrated system with balancing methods and consistency checks, there is reason to believe that the national accounts may reduce some of the inaccuracies in the statistical sources. On the other hand, national accounts require compilation of statistics in areas where the sources are unsatisfactory, and the inaccuracy in such areas may therefore be significant. Some of the figures in the national accounts are estimated as residuals.