Why GRP figures change in each annual update in Economic Profile

Each year, .id (Informed Decisions) refreshes the NIEIR data in Economic Profile, including Gross Regional Product (GRP). When the new data lands, GRP figures for your area – including past years – usually look different from the ones you've been quoting. That can be unsettling if strategy documents or council reports were built around a specific dollar figure.

This article is for council officers and economic development teams who use Economic Profile to track and report local economic performance. It explains the two ideas you need to read a refreshed GRP series correctly: how GRP is measured in real terms, and why three things can move a figure between annual updates.

Key concepts

Real GRP and the price base

GRP is published in 'real' terms, which strips out the effect of inflation. A 2% increase in real GRP means roughly 2% more goods and services were produced locally, not that revenue or turnover rose by 2%.

To express real GRP in dollars, the series is anchored to the prices of a chosen year, called the 'reference year' or price base. That reference year moves forward in each annual update, so the headline dollar level for any historical year is restated whenever the reference year changes. The price-base shift doesn’t change the percentage growth between years within the same vintage.. This is the same approach the ABS uses for national GDP.

Why GRP figures change between updates

Three things can change a GRP figure from one annual update to the next:

• Real growth or decline. The economy genuinely produced more or less than the previous year. This is the change councillors usually care about.
• Data revisions. GRP is built from ABS National Accounts, regional employment, building approvals, business counts and other inputs. As those inputs are refined, the modelled regional figures are refined too. Revisions usually affect every historical year, not just the latest, and are typically small – 1% to 3% in any given year.
• A new price base. The reference year moves forward by one year in every annual update. Because prices have generally risen, the dollar lev. The percentage growth between years stays the same.

The third driver is the most common reason a number looks different, and the one most likely to be misread as the economy going backwards. It isn't.

A useful way to think about this is in measurement units. If you measure the same building in metres and then in feet, the number changes, but the building doesn’t. A price-base shift works in a similar way: the dollar figure changes, but the underlying economic activity hasn’t changed for that reason alone.

How this applies in Economic Profile

The reference year for dollar values appears alongside the GRP figures on the Gross Regional Product page in Economic Profile. Each annual NIEIR release moves the reference year forward by one year and restates the historical series in those new prices.

When the new data is published:

• Compare percentage change between years within the same vintage. That's the real story of how the economy has performed.
• Don't compare dollar levels across different vintages. They're in different units.
• Older quoted figures can be restated in the new price base before they’re reused in reports or strategy updates. Contact .id if you’d like support.

Worked example

A hypothetical area with real growth of 2% a year, expressed in two different vintages:

The dollar value for the same historical year (say 2020–21) is different across vintages – that's the price-base shift, not a change in the economy. The real growth rate between 2018–19 and 2022–23 is the same in both vintages: about 8.4% over four years. That's the apples-to-apples comparison.

If '$2.04 billion' was quoted at a strategy launch (the 2019–20 figure in the old vintage) and '$2.54 billion' now appears for 2022–23, the apparent 25% jump is a mix: about 8% real growth, around 17% price-base shift, and a small remainder from data revisions.

Frequently asked questions

Has our economy shrunk?

Almost certainly not. Check the percentage growth between two years in the new vintage – that's the real story. The dollar level looks different because the price base has changed.

Are the figures in our strategy now wrong?

The growth assumptions and trajectory in your strategy still hold. The dollar levels can be restated in the new price base, and your .id team can help with this.

Why does the dollar value of last year keep changing?

Two reasons: a small data revision as better source data arrives, and the larger effect of the reference year moving forward by one year. Both are normal practice.

Is this a .id thing, or does the ABS do it too?

The ABS rebases the chain-volume measure of GDP at every annual update for the same reason. NIEIR follows the same convention so regional figures stay consistent with the national accounts.

Has the structure of our economy changed?

Annual updates don't change what GRP measures or how the local economy is categorised. A separate, much rarer kind of update – a structural rebase – can change industry classifications or methodology. That's not what's happening in an annual data refresh.