Data platform enables the UK statistics agency to perform better analysis on GDP estimates

In the UK, the Office for National Statistics (ONS) is the largest independent producer of official statistics and its recognised national statistical institute. Its main responsibilities are collecting, analysing, and disseminating statistics about the UK’s economy, society, and population at national, regional and local levels. It also conducts the census in England and Wales every 10 years.

For many years, ONS economic releases have relied on monthly survey returns from businesses to calculate how much the economy has grown. Monthly Business Survey (MBS) were sent to 45,000 companies to collect information about the companies’ turnover i.e. the amount of money coming in and out of their bank account. The information was then used by the ONS to estimate the performance of the UK economy.

Incorporating new data source to improve GDP estimates

To improve the detail and timeliness of its Gross Domestic Product (GDP) estimates, ONS adopted a platform solution by Cloudera Inc. to incorporate a new data source from 600,000 of the 1.8 million total Value Added Tax (VAT) returns to complement the 45,000 survey responses. At the initial stage, ONS used VAT returns for small and medium sized enterprises (SMEs), those employing up to 100 people, as these firms represent around 98% of all UK businesses.

According to the Chief Economist of ONS Mr Nick Vaughan, the new VAT data source gives ONS a more detailed picture of how the UK economy is performing. He explained how the improved approach helped to better gauge the performance of food and beverage service activities in the UK.

“For example, we currently send 172 forms a month to small restaurants and takeaways while we can now access nearly 28,000 VAT returns. Similarly, we send 108 forms a month to pubs and clubs when we will use 18,000 VAT returns to improve the quality of our estimates. The scaling up in available data means we can now measure detailed geographies and industries much more quickly than we have ever achieved before,” Mr Vaughan wrote.

The role of data platform in enabling better data processing

This unprecedented use of VAT returns data in GDP measurements represents a significant advance in the transformation of UK National Accounts and short-term economic indicators. The initiative was facilitated by ONS’ adoption of Cloudera Enterprise data platform.

Using Cloudera Enterprise not only benefits ONS’ use of newly available data sources on its Data Access Platform, it also facilitates ONS analysis, production and publication of more detailed and relevant statistics, including timely information on local economies. The Cloudera platform also includes high levels of security to protect this important data.

In addition, ONS data scientists are using Cloudera Data Science Workbench to transform historical analytical products into new ones using R, Python, and Scala.

The expansion of available data, together with Cloudera tools, means that ONS’ analysts, statisticians, economists and data scientists can now perform increasingly fine-grained analysis much more quickly than ever before.

“Adding VAT information to ONS’ data pool is an important move in providing richer analysis of the performance of the UK’s economy. This is an excellent example of how modernising IT systems can empower businesses to deliver phenomenal results and seize control of their data while enjoying cost and time savings,” said Mr David Pieterse, Vice President EMEA at Cloudera said.

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