GDPLive turns 3: tracking GDP in real time
Three years ago next month, Massey University’s Knowledge Exchange Hub launched GDPLive, a world-first AI-driven solution for forecasting Gross Domestic Product (GDP) in real-time.
GDPLive uses machine-learning algorithms and live daily data from a wide range of sources to form estimates of economic activity in New Zealand.
Knowledge Exchange Hub director Christoph Schumacher, who is also Professor of Innovation and Economics at the university, says GDPLive was developed to solve problems caused by official GDP statistics always being one to two quarters out of date.
Over time, GDPLive has become better at calculating the current rate of economic growth and at forecasting future growth, outperforming standard forecasters.
It is the combination of cutting edge machine learning models complemented with live data which greatly improves the ability of GDPLive to respond to dramatic changes. This became clear when COVID-19 caused unprecedented disruptions. While most traditional forecasting tools struggled, GDPLive has been remarkably accurate, predicting the surprise contraction in Q4 of 2020 and Q2’s surge in economic growth this year.
Companies need real-time information
Because New Zealand’s GDP is reported retrospectively (quarterly for national GDP and annually for regional GDP), it is difficult for businesses, government agencies or individuals to use offical GDP values as a planning tool.
While GDPLive has already achieved an impressive forecasting ability, it will only become more accurate as additional data sources are added and the algorithms are successively refined. “It’s a process of iterative development” says GDPLive data scientist Teo Susnjak, “And we are confident that our forecasts will continue to improve”.
Varied big data sources
GDPLive has been developed with live up-to-date data from numerous data partners that is supplemented by data from government sources.
GDPLive’s datasets include consumer spending through Paymark payment transactions, freight movements via PortConnect, which includes container movements through Ports of Auckland and Ports of Tauranga, goods moved throughout the country on the KiwiRail network, jobs data courtesy of online auction site TradeMe, demand for building products through Steel & Tube Ltd, traffic flows, immigration and import/export data.
The GDPLive portal can be accessed at: gdplive.net