8412.0 - Mineral and Petroleum Exploration, Australia, Dec 2002  
ARCHIVED ISSUE Released at 11:30 AM (CANBERRA TIME) 19/03/2003   
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APPENDIX 1 - EXPECTATIONS DATA


Adjustments to expectations data

The ABS proposes to change the methodology used to compile the expected expenditure on mineral exploration series presented in Table 1 of this publication.

From June quarter 2000, an adjustment was applied to the expectations for each period so that the expectations data would be a more reliable indicator of expenditure for the period. These adjustments were applied to the time series back to the December half 1989 in order to present the full time series on a consistent basis. The June quarter 2000 issue of this publication contains details of how these adjustments were derived.

Subsequent investigations have shown that these adjustments have not been successful in creating a reliable expectations series. For expectations to be a reliable predictor, the most important feature is their consistency over time in terms of their relationship with actual expenditure (the "realisation ratio"). For example, if a particular expectations series consistently understates actual expenditure by 30% over time, then the expectations data is a useful predictor of the actual outcome. In the case of the mineral exploration expectations series, the adjustments have not removed the volatility in these realisation ratios to any great degree, although they have removed the downward bias in the unadjusted series.

From next quarter's release, the ABS intends to present the expectations data and consequent realisation ratios in their unadjusted forms. These data will be available for the full time series. Information on average realisation ratios will also be provided. The adjusted expectation series will be retained to assist users in making their assessments of the likely expenditure for the periods covered by the expectations data.

The table below presents the actual expenditure, expectations as collected and the adjusted expectations through the time series from December 1989, as well as the adjustment factors which had been applied to the expectations previously released and comparative realisation ratios.


MINERAL EXPLORATION: COMPARISON OF UNADJUSTED AND ADJUSTED EXPECTED EXPENDITURE
Actual as a
Actual as a
Adjustment
proportion of
proportion of
Unadjusted
Adjusted
factor
unadjusted
adjusted
Actual
expected
expected
applied
expected
expected
Half Year
$m
$m
$m
%
%
%
Dec 1989
316.0
270.7
376.3
1.390100
116.7
84.0
Jun 1990
291.6
268.3
309.0
1.151696
108.7
94.4
Dec 1990
310.5
228.4
336.4
1.472855
135.9
92.3
Jun 1991
291.1
224.2
252.3
1.125335
129.8
115.4
Dec 1991
317.7
222.3
330.7
1.487629
142.9
96.1
Jun 1992
286.3
244.3
278.2
1.138764
117.2
102.9
Dec 1992
335.5
257.0
363.4
1.414008
130.5
92.3
Jun 1993
296.3
275.8
318.7
1.155547
107.4
93.0
Dec 1993
396.4
223.6
331.9
1.484347
177.3
119.4
Jun 1994
396.2
319.4
374.8
1.173450
124.0
105.7
Dec 1994
458.4
349.2
450.4
1.289805
131.3
101.8
Jun 1995
443.0
428.7
515.4
1.202239
103.3
86.0
Dec 1995
456.5
372.3
472.2
1.268332
122.6
96.7
Jun 1996
503.8
401.3
480.2
1.196611
125.5
104.9
Dec 1996
565.7
361.8
462.3
1.277778
156.4
122.4
Jun 1997
582.8
447.1
539.1
1.205771
130.4
108.1
Dec 1997
583.8
513.7
605.7
1.179093
113.6
96.4
Jun 1998
483.1
387.6
462.5
1.193240
124.6
104.5
Dec 1998
475.2
299.2
403.3
1.347928
158.8
117.8
Jun 1999
362.3
303.4
354.2
1.167436
119.4
102.3
Dec 1999
356.9
252.8
359.5
1.422073
141.2
99.3
Jun 2000
319.4
284.8
330.3
1.159761
112.1
96.7
Dec 2000
357.0
245.6
352.7
1.436075
145.4
101.2
Jun 2001
326.3
272.7
314.7
1.154015
119.7
103.7
Dec 2001
338.1
320.1
423.0
1.321462
105.6
79.9
Jun 2002
302.7
258.7
296.7
1.146888
117.0
102.0
Dec 2002
375.7
311.4
414.7
1.331728
118.0
103.0
Jun 2003
n.y.a.
285.9
331.7
1.160196
n.y.a.
n.y.a.


Survey procedures

The main deficiencies in these unadjusted expectations result from the inability of some businesses to accurately predict their expenditure for the following six months. The ABS is intending to modify the procedures used in the quality assurance process for these expectations, including imputation for missing data, over coming quarters. This is expected to increase the usefulness of these expectations as a predictor of actual expenditure. Information will be included in the release which quantifies the quality improvements that arise from the change in survey procedures so that estimates compiled on the old and new basis are comparable.

Expectations for petroleum exploration are unaffected by this change. These data have previously been compiled by aggregating the reported expectations data without adjustment and this will continue to be the case.

Please contact John Blanchette on 02 9268 4429 or by email john.blanchette@abs.gov.au for more information.