Government statisticians are trying to harness the power of big data technology, monitoring the number of lorries on roads and company VAT receipts, in an attempt to more rapidly spot changes taking place in the UK economy. The new snapshot from the ONS showed a “very slight” downturn in economic activity in the opening months of 2019 based on VAT receipts. The traffic data showed little change, with the count for larger vehicles close to the average levels between 2016 and 2018. The ONS said the figures could not be relied upon to predict GDP without its usual array of traditional indicators.
However, the traffic data caught previous downturns, including the financial crisis. The experiment adds to the proliferation of ways to monitor trends in the economy. Barclays assessed the links in 2012 between construction of the world’s tallest towers and the onset of a financial crisis, finding evidence in New York in 1930, Chicago in 1974, Kuala Lumpur in 1997 and Dubai in 2010. The former chairman of the US Federal Reserve Alan Greenspan has looked since the 1970s at sales of men’s underwear.
His theory is that sales remain stable in normal economic times and drop during a downturn, as consumers are more likely to tighten their belts. There are, however, likely to be questions over the quality of the new ONS data and its usefulness. The figures reveal several spikes in average traffic counts because of data issues rather than shifting trends in the economy. It also comes as GDP statistics are published more regularly than in the past.
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