January 2011
Issued by
Office for National Statistics,
Government Buildings, Cardiff
Road, Newport NP10 8XG
Media Office 0845 6041858
Business Area 0163 3455250
[email protected]
Summary Quality Report for Business Investment
1 Introduction
This report is part of a rolling programme of quality reports being introduced by the Office for
National Statistics (ONS). The full programme of work being carried out on Statistical Quality1 is
available on the ONS website. Summary Quality Reports are overview notes which pull together
key qualitative information on the various dimensions of quality as well as providing a summary of
methods used to compile the output.
Business Investment2 estimates are a short term indicator of capital expenditure by manufacturing
and non-manufacturing businesses within the UK. Business Investment is one component of Gross
Fixed Capital Formation.
Gross Fixed Capital Formation comprises information from Business Investment; General
Government; Dwellings and Existing Buildings and Dwellings for both the public and private sector.
Business Investment excludes dwellings and the costs associated with the transfer of ownership of
non-produced assets. Gross Fixed Capital Formation is used in the compilation of the UK National
Accounts’ expenditure measure of Gross Domestic Product (GDP)3
2 Summary of Quality
2.1 Relevance
The degree to which the statistical product meets user needs for both coverage and content.
Business Investment estimates are produced twice each quarter and are based primarily on results
of the Quarterly Capital Expenditure Inquiry4which collects data on the acquisition and disposal of
capital assets.
The Quarterly Capital Expenditure Inquiry covers around 95 per cent of the data used in the
Business Investment estimates and is sourced from the manufacturing, other production,
construction, distribution and other services sectors.
The Quarterly Capital Expenditure Inquiry has a sample size of approximately 27,000 UK
businesses and is a stratified random sample based on employment size (20-49, 50-99,100-299
and 300+). It uses the Inter Departmental Business Register (IDBR)5 as its sampling frame. A
summary quality report is available for the Quarterly Capital Expenditure Inquiry6.
Results of the Quarterly Capital Expenditure Inquiry are weighted and aggregated at industry level.
Current price and chained volume measures are derived and are available non-seasonally adjusted
and seasonally adjusted. The impact of price changes is removed from the chained volume
measures using ONS Producer Price Indices7.
Business Investment estimates are used by ONS National Accounts8, and externally by the Bank of
England and Her Majesty’s Treasury to monitor economic performance and inform monetary and
fiscal policy decisions. Business Investment is also used by other government departments, such
as the Department for Business Innovation and Skills, the business and research communities,
education, the media and general public.
In 2010 a User Engagement Survey for the Business Investment Statistical Bulletin was conducted.
The aim of this survey was to identify users; uses of the statistics; perceptions of statistical quality,
presentation and commentary, and perceptions of the statistical service provided. Results of the
survey9 are available on the National Statistics website.
2.2 Accuracy
The closeness between an estimated result and the (unknown) true value.
Revisions are a consequence of the trade-off between timeliness and accuracy. Sampling
variations are a trade off between accuracy and costs. All sample survey estimates are subject to
statistical error which refers to the uncertainty in any process or calculation that uses sampling,
estimation or modelling.
Business Investment estimates are subject to revision due to:
• late responses to the Quarterly Capital Expenditure Inquiry
• revisions to seasonal adjustment factors which are re-estimated every quarter
• annual updating of the IDBR that forms the basis of the sample for the Quarterly Capital
Expenditure Inquiry (usually occurring in quarter 1 and having most effect on the results
published in May).
One dimension of measuring accuracy is reliability, which is measured using evidence from
analyses of revisions to assess the closeness of early estimates to subsequently estimated values.
The results of these analyses are published in tables in the Business Investment Statistical
Bulletin10. For Business Investment, two analyses are made. Firstly between the Provisional
Business Investment estimates (released at GDP Month 2) and the Revised Business Investment
estimates (released at GPD Month 3). Secondly between the Revised Business Investment
estimates and the equivalent estimates published three years later. Spreadsheets11 giving these
estimates and the calculations behind the averages in the tables are also available.
Revisions to the Business Investment estimates are published in line with the revisions policy12
used for National Accounts.
It is important to note that there are other aspects to accuracy which revisions analysis cannot
attempt to measure. A value can be reliable (as in not revised) without being accurate.
Accuracy of the Business Investment estimates can be affected by response rates to the Quarterly
Capital Expenditure Inquiry. If a lower response rate than normal is achieved, then there is a
decrease in the information base of the estimate in the short term, and this may possibly lead to an
increased chance of revisions in subsequent estimates of Business Investment. Response rates for
the current quarter and earlier periods are published in the Business Investment Statistical Bulletin
and reflect the response rates at the time of publication.
2.3 Timeliness and Punctuality
Timeliness refers to the lapse of time between publication and the period to which the data refer.
Punctuality refers to the time lag between the actual and planned dates of publication.
Provisional Business Investment estimates are published around eight weeks after the end of the
reference quarter on the same day as the National Accounts UK Output, Income and Expenditure13
release. Revised Business Investment estimates are published around twelve weeks after the end
of the reference quarter on the same day as the Quarterly National Accounts14.
Business Investment publication dates are fixed one year in advance and are directly related to the
UK Output, Income and Expenditure and Quarterly National Accounts releases.
Office for National Statistics, Information paper
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For more details on Business Investment releases, the UK National Statistics Publication Hub15 is
available online and provides twelve months advanced notice of release dates. In the unlikely event
of a change to the pre-announced release schedule, public attention should be drawn to the change
and the reasons for the change should be explained fully at the same time, as set out in the Code
of Practice for Official Statistics16.
2.4 Accessibility and Clarity
Accessibility is the ease with which users are able to access the data, also reflecting the format(s)
in which the data are available and the availability of supporting information. Clarity refers to the
quality and sufficiency of the metadata, illustrations and accompanying advice.
The Business Investment Statistical Bulletin and Time Series datasets are available to download
free from the National Statistics website at 9.30 AM on the day of publication.
ONS allows a list of agreed officials17 to have access to data 24 hours before publication.
The Business Investment Statistical Bulletin conforms to the standards set out in the UK Statistics
Authority Code of Practice18.
Time series used in the Business Investment Statistical Bulletin and Time Series datasets carry
unique identifiers for ease of use. The Business Investment Statistical Bulletin includes commentary
on the dataset in addition to relevant graphs and tables. Accompanying background notes provide
information on coverage, quality reporting, revisions and publication policy.
For queries on the Business Investment estimates please contact Gross Capital Formation Branch
by e-mail at [email protected] or by telephone on 01633 455 250.
2.5 Comparability
The degree to which data can be compared over time and domain.
Every effort is made to ensure that the series is comparable over time.
Where possible, changes to methodology are applied to the whole series to ensure this
comparability is maintained. However the National Accounts revision policy19 may mean that this is
not possible.
Since international standards such as SNA 9320 and ESA 9521are used in the production of the
Business Investment estimates, the figures should be directly comparable with the accounts of
other countries. However the revisions policies of these countries should be examined before
comparing data for back periods.
2.6 Coherence
The degree to which data that are derived from different sources or methods, but which refer to the
same phenomenon, are similar.
The data sources and methodology used in the production of the Business Investment Statistical
Bulletin22 are consistent with those used in the expenditure measure of GDP, published in the
Quarterly National Accounts Statistical Bulletin23.
3 Summary of Methods Used to Compile the Output
The Business Investment estimates are derived primarily from the results of the statutory Quarterly
Capital Expenditure Inquiry24. This inquiry has a sample size of approximately 27,000 UK
businesses. Businesses are classified by industry and stratified by employment. Businesses with
over 300 employment are permanently included in the sample. Those with between 20 and 300
employment are sampled on a rotating basis and those with employment under 20 are not sampled.
Combined ratio estimation is used to produce the results of the Quarterly Capital Expenditure
Inquiry with atypical or extreme values treated as outliers. The Summary Quality report for the
Office for National Statistics, Information paper
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Quarterly Capital Expenditure Inquiry25 explains in more detail the methods used to compile the
results of the survey.
The results are aggregated and weighted and used to produce value and chained volume estimates
in both seasonally adjusted and non-seasonally adjusted forms (seasonal adjustment estimates
and removes seasonal and calendar effects from the estimates to aid interpretation). The chained
volume estimates (reference year 2006=100) are derived by taking the value estimates and
adjusting to remove the impact of price changes26 using Producer Price Indices27.
The Business Investment estimates are quality assured using a variety of standard practices, such
as movement analysis at sector, industry and asset level. Any atypical movements are investigated
to ensure the quality of the data to be published and understand/explain the movements.
As the Business Investment estimates are used in the production of the GDP expenditure estimate
and are produced according to the National Accounts framework they are subject to the same
revisions policy28 and adjustment process as the expenditure measure of GDP.
Statistical disclosure control methodology is applied to Business Investment data. This ensures
that information attributable to an individual or individual organisation is not identifiable in any
published outputs. The Code of Practice for Official Statistics29, and specifically the Principle on
Confidentiality set out practices for how we protect data from being disclosed. The Principle
includes the statement that ONS outputs should “ensure that official statistics do not reveal the
identity of an individual or organisation, or any private information relating to them, taking into
account other relevant sources of information”. More information can be found in National
Statistician’s Guidance: Confidentiality of Official Statistics30 and also on the Statistical Disclosure
Control Methodology page of the ONS website31.
4 References
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
Title of Reference
Statistical Quality
Business Investment
Gross Domestic Product
Quarterly Capital Expenditure
Inquiry
Inter Departmental Business
Register
Quarterly Capital Expenditure
Inquiry Summary Quality
Report
Producer Price Indices
National Accounts
Business Investment User
Engagement Survey
Business Investment Statistical
Bulletin
Business Investment revisions
spreadsheets
National Account Revisions
statement
UK Output, Income and
Expenditure
Quarterly National Accounts
UK National Statistics
Publication Hub
Code of Practice
for Official Statistics
Pre- release Access to
Business Investment
Website Location
http://www.ons.gov.uk/about-statistics/methodology-andquality/quality/index.html
http://www.statistics.gov.uk/StatBase/Product.asp?vlnk=171
http://www.statistics.gov.uk/CCI/nugget.asp?ID=56
http://www.statistics.gov.uk/StatBase/Source.asp?vlnk=64&Pos=&ColRank=1
&Rank=422
http://www.statistics.gov.uk/CCI/nugget.asp?ID=195&Pos=4&ColRank=1&Ra
nk=224
http://www.ons.gov.uk/about-statistics/methodology-and-quality/quality/qualinfo-economic-social-and-bus-stats/quality-reports-for-business-statistics/sumqua-rep-cap-exp.pdf
http://www.statistics.gov.uk/StatBase/Product.asp?vlnk=790
http://www.statistics.gov.uk/cci/nugget.asp?id=55
http://www.statistics.gov.uk/downloads/theme_economy/bus-invest-userengage-survey-results.pdf
http://www.statistics.gov.uk/StatBase/Product.asp?vlnk=171
http://www.statistics.gov.uk/StatBase/Product.asp?vlnk=171
http://www.statistics.gov.uk/CCI/article.asp?ID=1187&Pos=&ColRank=1&Ran
k=224
http://www.statistics.gov.uk/statbase/Product.asp?vlnk=1129
http://www.statistics.gov.uk/statbase/Product.asp?vlnk=818
http://www.statistics.gov.uk/hub/release-calendar/index.html
http://www.statisticsauthority.gov.uk/assessment/code-of-practice/index.html
http://www.ons.gov.uk/about-statistics/nsstandard/cop/compliance/quarterly/index.html
Office for National Statistics, Information paper
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18
19
20
21
22
23
24
25
26
27
28
29
30
31
Code of Practice
for Official Statistics
National Accounts revision
statement
SNA 93
ESA 95
Business Investment Statistical
Bulletin
Quarterly National Accounts
Statistical Bulletin
Quarterly Capital Expenditure
Inquiry
Quarterly Capital Expenditure
Inquiry Summary Quality
Report
UK Price and Volume
Producer Price Indices
National Accounts revision
statement
Code of Practice
for Official Statistics
National Statistician’s
Guidance: Confidentiality of
Official Statistics
Statistical Disclosure Control
Methodology
http://www.statisticsauthority.gov.uk/assessment/code-of-practice/index.html
http://www.statistics.gov.uk/CCI/article.asp?ID=1187&Pos=&ColRank=1&Ran
k=224
http://unstats.un.org/unsd/sna1993/introduction.asp
http://circa.europa.eu/irc/dsis/nfaccount/info/data/ESA95/en/esa95en.htm
http://www.statistics.gov.uk/StatBase/Product.asp?vlnk=171
http://www.statistics.gov.uk/statbase/Product.asp?vlnk=818
http://www.statistics.gov.uk/StatBase/Source.asp?vlnk=64&Pos=&ColRank=1
&Rank=422
http://www.ons.gov.uk/about-statistics/methodology-and-quality/quality/qualinfo-economic-social-and-bus-stats/quality-reports-for-business-statistics/sumqua-rep-cap-exp.pdf
http://www.statistics.gov.uk/StatBase/Product.asp?vlnk=11019&Pos=&ColRan
k=1&Rank=160
http://www.statistics.gov.uk/StatBase/Product.asp?vlnk=790
http://www.statistics.gov.uk/CCI/article.asp?ID=1187&Pos=&ColRank=1&Ran
k=224
http://www.statisticsauthority.gov.uk/assessment/code-of-practice/index.html
http://www.statisticsauthority.gov.uk/national-statistician/ns-guidance-andreports/national-statistician-s-guidance/index.html
http://www.statistics.gov.uk/about/data/methodology/general_methodology/sd
c.asp
Last Publication Date: January 2011
Office for National Statistics, Information paper
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