GDP can also be defined as the total value added in the production of traded goods and services. The value added of a business, or of an industry group, is the difference between the value of gross output and that of the intermediate goods and services required to produce the output - i.e. in the manufacture of the goods or provision of the services. This is the basis for the methodology used to calculate GDP using the new quarterly model. The series are comparable between industries, and with the indices for the UK produced by the Office for National Statistics. The new model is based on almost 200 series which are selected as indicators of change in net output 15 for sub-sectors across the economy.
Examples are deflated turnover and physical measures of a traded good or service.
The series are converted into indices and seasonal variation is removed. GDP growth figures are then calculated using weighted averages of these seasonally adjusted constant prices indices. Producing output based series. However, due to the large amounts of data that are required, this method is only used for the agriculture sector. Therefore, this approach assumes that indicators of change in output are proportional to change in value added.