Seasonal adjustment is a means of removing the estimated effects of seasonal and calendar related variation from a series so that the effects of other influences can be more clearly recognised. It does not remove the effect of irregular or other influences (e.g. the approval of large projects or a change in the administrative arrangements of approving authorities). Since seasonally adjusted statistics reflect both irregular and trend movements, an upward or downward movement in a seasonally adjusted series does not necessarily indicate a change of trend. Particular care should therefore be taken in interpreting individual quarter to quarter movements.
Some of the component series shown have been seasonally adjusted independently. As a consequence, while the unadjusted components in the original series shown add to the totals, the adjusted components may not add to the adjusted totals. (For example, the sum of the adjusted state or sector series may not add to the adjusted Australian total). Therefore, figures should not be derived using the adjusted totals.
Seasonally adjusted estimates are produced by a seasonal adjustment method which takes account of the latest available original estimates. A detailed review of seasonal factors is conducted annually, generally prior to the release of data for the December quarter.
The ABS produces trend estimates to best represent the underlying behaviour in a series. Trend estimates are created by smoothing seasonally adjusted series to reduce the impact of the irregular component of the seasonally adjusted series. Abnormally high or low values (outliers) are discounted or excluded from the trend estimates.
Seasonally adjusted and trend estimates may be revised as new periods of data become available. Generally, revisions become smaller over time. Revisions to original data may also lead to revisions to seasonally adjusted and trend estimates.
As a general rule, caution should be exercised in using the seasonally adjusted series for dwelling unit commencements in Northern Territory and Australian Capital Territory. The small numbers and volatile nature of these data makes reliable estimation of the seasonal pattern very difficult.
Further information on seasonally adjusted and trend estimates can be found in the ABS Information papers Time Series Analysis Frequently Asked Questions, 2003 (cat. no. 1346.0.55.002) and A Guide to Interpreting Time Series - Monitoring Trends, 2003 (cat. no. 1349.0).
Chain volume measures
Chain volume estimates of the value of work done are presented in original, seasonally adjusted and trend terms for Australia and for each state and territory.
While current price estimates of value of work done reflect both price and volume changes, chain volume estimates measure changes in value after the direct effects of price changes have been eliminated and therefore only reflect volume changes. The direct impact of the Goods and Service Tax is a price change, and hence is removed from chain volume estimates. The deflators used to revalue the current price estimates in this publication are derived from the same price data underlying the deflators compiled for the dwellings and new other building components, and the new engineering construction component, of the national accounts aggregate ‘Gross fixed capital formation’.
The chain volume measures of work done appearing in this publication are annually reweighted chain Laspeyres indexes referenced to current price values in a chosen reference year. The reference year is updated annually in the September quarter publication. Each year’s data in the value of work done series are based on the prices of the previous year, except for the quarters of the latest incomplete year which are based upon the current reference year. Comparability with previous years is achieved by linking (or chaining) the series together to form a continuous time series.
Chain volume measures do not, in general, sum exactly to the extrapolated total value of the components. Further information on the nature and concepts of chain volume measures is contained in the ABS Information Paper: Introduction of Chain Volume Measures in the Australian National Accounts (cat. no. 5248.0).
The factors used to seasonally adjust the chain volume measures are identical to those used to adjust the corresponding current price series.