New Lending Services Price Index (NLSPI)
Detailed information for first quarter 2014
Status:
Active
Frequency:
Quarterly
Record number:
5207
The New Lending Services Price Index (NLSPI) measures monthly price changes over time for new lending services in Canada. The estimates are produced on a quarterly basis.
Data release - July 11, 2014
Description
The NLSPI measures monthly price changes over time for new lending services in Canada; the estimates are produced on a quarterly basis. Prices are derived as the difference between annual percentage rates for new loan products and weighted averages of yields on financial market instruments. The variables used to derive the prices are weighted annual percentage rates for new lending services, funds advanced by product, and market rates. The primary purpose of this measure is to provide supplemental information to help inform the deflation of output in the Canadian System of National Accounts (CSNA) for BS5221A0 Banking and Other Depository Credit Intermediation. The index represents new lending only, and as such has limited coverage in relation to the overall activity of the industry which includes services provided on existing loans as well as other activities.
Statistical activity
These indexes are a part of the Services Producer Price Index program (SPPI) at Statistics Canada.
The SPPI program develops and produces price indexes for a wide range of business service categories. This initiative fills an important data gap in the area of economic statistics and has resulted in a more comprehensive set of service price indexes. It also allows Statistics Canada to produce more accurate estimates of real value added of the Gross Domestic Product and changes in productivity.
Reference period: The time period for which the NLSPI equals 100; currently this is the year 2011.
Collection period: Monthly data are collected 6 weeks after the end of each reference month. Data are published quarterly.
Subjects
- Prices and price indexes
- Service price indexes
Data sources and methodology
Target population
The target population for the NLSPI is Canadian Chartered Banks. Chartered banks fall under the North American Industry Classification System (NAICS) industry 52211, Banking.
Instrument design
This methodology does not apply.
Sampling
This is a sample survey with a cross-sectional design.
The sample was chosen deterministically. Collectively the chosen banks account for over 90% of all revenues and assets in the industry.
Data sources
Data are extracted from administrative files and derived from other Statistics Canada surveys and/or other sources.
The data for the NLSPI are obtained from the Bank of Canada's Report on New Lending as well as from the Canadian System of National Accounts' Gross Domestic Product by Income and Expenditure Accounts, and Financial Market Statistics used in the preparation of the Bank of Canada Review.
The Report on New Lending is collected monthly by the Bank of Canada through a survey of all Canadian chartered banks. Each bank is required to provide data on interest rates and funds advanced for 10 lending products by 6 interest rate term maturities as well as for the aggregate of all products and all maturities.
In order to calculate prices for each lending product, a reference rate was deducted from each product`s lending rate (by bank and maturity). The reference rate was derived from data on Financial Market Statistics used in the preparation of the Bank of Canada Review and available on CANSIM. Certain market instruments were chosen and their yields were aggregated in order to produce the reference rate.
Since the value of money is eroded over time, a discount factor is applied to the spread. The discount factor is derived using the implicit price index for Final Domestic Expenditure from the Canadian System of National Accounts' Gross Domestic Product by Income and Expenditure Accounts.
For a more detailed explanation of the methodology please refer to the NLSPI Methodology Summary Document.
Error detection
Error detection is conducted during post collection editing, through a system of data validity specifications. Failing records are reviewed for editing and correction when necessary.
Imputation
Imputation for non-response or missing price data is calculated using the averages of designated cells.
Estimation
Estimates are a weighted average of monthly price changes by product, which are chained together to form an index series. The NLSPI is a national index which uses derived revenues as its weighting source and is updated when needed.
Quality evaluation
The quality of this index is maintained through the expertise of the few trained analysts assigned to it. They develop a thorough knowledge of the domain, which is supplemented by outside personal contacts with the data providers. Much time and effort is devoted to detecting and following up unusual fluctuations over time in the pricing patterns of services. Prior to dissemination, the price indexes are analyzed and historic trends reviewed.
Disclosure control
Statistics Canada is prohibited by law from releasing any information it collects which could identify any person, business, or organization, unless consent has been given by the respondent or as permitted by the Statistics Act. Various confidentiality rules are applied to all data that are released or published to prevent the publication or disclosure of any information deemed confidential. If necessary, data are suppressed to prevent direct or residual disclosure of identifiable data.
Individual price and weight data collected under the Statistics Act are confidential. Price data are converted to price indexes and data are released so that it is not possible to identify the suppliers of the raw price information.
Revisions and seasonal adjustment
Data for the most recent quarter are preliminary. The previous quarter of the series is subject to revision. The series is also subject to an annual revision released with second quarter data of the following reference year. The index is not seasonally adjusted.
Data accuracy
The statistical accuracy of this index depends on price and weight data, which are obtained from an outside data source (Bank of Canada). Through continuous monitoring of the data received and discussion with the supplier, an acceptable level of data quality and integrity is maintained for the purposes of producing the price index series.
Due to the fact that administrative data are used, confidence intervals are not currently estimated and statements about the statistical reliability cannot be made.
Documentation
- New Lending Services Price Index - Methodology Summary Document
- Date modified: