Enhancing Trade in Services quarterly statistics

The Australian Bureau of Statistics (ABS) is enhancing the quality of quarterly international trade in services statistics. From the June 2022 reference quarter, the ABS will be making changes to include the most up to date data in the Balance of Payments and International Investment Position, Australia publication (published 6 September 2022). The changes include realigning the collection of the Survey of International Trade in Services (SITS) so it can be included in the relevant quarterly publication, i.e. the June quarter survey estimates will be included in the June quarter publication, and utilising the most recent ABS Overseas Arrivals and Departures (OAD) data and overseas card payments data (RBA) in the travel estimates.

This paper provides a summary of the changes and the practical implications for the trade in services data available in the monthly and quarterly international statistics publications.

The ABS’ primary objective is to produce high-quality statistics that inform important decisions made by governments, businesses, and the wider community. In October 2021, the ABS consulted with key stakeholders and users on a range of potential and upcoming enhancements to the suite of International Trade statistics. A key priority was to improve the quality of trade in services statistics, given its importance in the quarterly Balance of Payments and the National Accounts estimates. International trade in services statistics contribute directly to a range of key macroeconomic measures such as exports/imports, current account, household consumption and GDP. 

The ABS Data Quality Framework is used to make assessments about the overall quality of its statistical outputs, and consists of 7 dimensions. The focus of this work is on improving “Accuracy” by reducing the size and frequency of revisions in trade in services estimates. This will be achieved by incorporating the most up to date information in the compilation of services estimates for the latest reference period.

Trade in services estimates are broken down and published according to the Extended Balance of Payments Services classification (EBOPS). The SITS is an important input into the compilation of these estimates, contributing to 8 of the 12 published categories:

The International Trade in Services; Concepts, Sources, and Methods provides further information on each of the services categories and the contribution of the SITS to their measurement.

Currently, the timing of the SITS is such that data from the survey is not finalised in time for inclusion in the current reference period. In order to produce estimates for the current reference period, the ABS utilises statistical models to “nowcast” (a forecast for the current month or quarter using closely related data) components of the monthly and quarterly services statistics. The nowcasts are then revised in the following months and quarter when the actual survey data for that reference period is available.

Additionally, in any given month, the travel statistics for both imports and exports are nowcast for the reference month. Currently, when the quarterly publication is released, the final month of the quarter is still a nowcast. This results in revisions when the actual OAD and RBA data is included the following quarter.

The ABS will enhance the quality of trade in services statistics through the introduction of two key changes:

1. Bring forward the collection and processing period for the SITS, in line with the cycle of other ABS business surveys. This change will enable the SITS data to be included in the initial estimates for each quarterly reference period and reduce the need for nowcasting.
2. Bringing forward some of the data inputs (OAD and RBA data) used to compile travel services. This will mean that estimates for the Balance of Payments and International Investment Position, Australia will reflect the most up to date data.

These changes will be reflected in Balance of Payments and International Investment Position, Australia for the June 2022 reference quarter onwards.

This will improve the accuracy of quarterly trade in services statistics by reducing the size and frequency of revisions that occur when nowcasts are replaced by the actual survey data. Longer term, these improvements are also the first step towards providing more timely and frequent detailed trade in services data, such as country and state data by quarter, which was the highest ranked priority for users of the trade in services statistics. 

Monthly trade in services estimates for the three months to June, will continue to be published in Tables 9 and 10 in the International Trade in Goods and Services, Australia at the following level of detail for credits and debits:

Please note, most of this monthly data will still be nowcast in the month of publication.

From the June reference month Tables 11a and 11b – Services credits and debits, original, current prices - quarterly will no longer be published in the International Trade in Goods and Services, Australia publication (June month to be published 4 August 2022). These tables include more detailed nowcasts of trade in services for the June reference quarter which will no longer be available.

The full suite of quarterly data will now be published one month later in Tables 8 and 9 – Services credits and debits in the Balance of Payments and International Investment Position, Australia (published 6 September 2022). The June quarter SITS data and most up to date OAD and RBA data will be included in these estimates, reducing the level of nowcasting and subsequent revisions that would have been published with the August 2022 reference month and the September 2022 reference quarter.

These changes mean the sum of the three months (e.g summing the April, May and June monthly publication estimates) will no longer equal the value published in the Balance of Payments and International Investment Position publication, however, the quarterly estimates will be of higher quality. The monthly trade in services estimates for the April, May and June reference months will be revised and released with the July 2022 International Trade in Goods and Services, Australia (published 8 September), so that it aligns with the quarterly data published two days earlier.

The ABS would like to thank survey respondents and users for their cooperation in making this change possible.

For more information please contact: balance.of.payments@abs.gov.au