The (slightly) shifting sand of GDP estimates
The estimate for Alberta’s GDP in 2020 has been changed from a drop of 8.2% to a drop of 7.9%
By Rob Roach, ATB Economics 10 November 2021 2 min read
About this time last year (which seems like 20 years ago), the Owl noted that: “As Canadians, we are fortunate to have a national statistical agency that produces high quality economic data. At the same time, it’s always a good idea to remind ourselves that almost all economic statistics are estimates.”
What was true then is true today.
Without getting into the methodological weeds, Statistics Canada releases a set of GDP figures for the provinces in May and another more accurate set in November.
Does this matter?
On the one hand, it’s not a big deal if the different estimates are close, which they usually are. Number crunchers like the Owl team have to adjust our spreadsheets, but the basic picture remains the same.
On the other hand, small differences in GDP can represent billions of dollars of economic activity and can change the tone of the associated narrative.
Alberta’s economic output over the last few years provides a good example.
According to the May 2020 estimates, Alberta’s annual economic output in 2019 shrank by 0.6%. Both the November 2020 and the May 2021 estimates, however, showed an increase of 0.1%. As a result, the “recession” of 2019 went away (albeit, just barely).
Well, the recession of 2019 is back! The new set of GDP figures released yesterday show that Alberta’s economy contracted by 0.1% in 2019.
Another change worth noting is that the estimate for Alberta’s GDP in 2020 has been changed from a drop of 8.2% to a drop of 7.9%. It’s not much of a difference, and -7.9% is still a record, but at least it wasn’t quite as bad as we thought (assuming the numbers don’t change again).
While these statistical revisions are nothing to lose sleep over, they are an important part of the process and of the historical record. As for Alberta’s economy in 2019, whether it grew by a smidge or contracted by a smidge, it was definitely not a strong year. The same is true for 2020—whether we contracted by 8.2% or 7.9%, it was definitely a major recession.
Answer to the previous trivia question: Italy produces the most pasta in the world followed by the United States, Brazil, Russia and Turkey.
Today’s trivia question: Which province’s real GDP was higher in 2020: Alberta’s or BC’s?