Short-term business statistics

STS indices cover four major domains: industry, construction, retail trade and other services. These activities are defined in relation to the statistical classification of economic activities in the European Community (NACE). STS indicators are published by Eurostat exclusively using the NACE Rev. 2 classification.

For STS, industry covers Sections B to E of NACE Rev. 2, i.e. mining and quarrying, manufacturing, electricity, gas and water supply; construction covers Section F (total construction, building, civil engineering and residential and non-residential buildings); while, retail trade covers Division 47. As for the other services, activities covered relate to Divisions 45 and 46: wholesale and retail trade and repair of motor vehicles and motorcycles, wholesale trade except of motor vehicles and motorcycles; Section H: transportation and storage; Section I: accommodation and food services; Section J: information and communication; Division 69: legal and accounting activities; Group 70.2: management consultancy activities; Division 71: architectural and engineering activities, technical testing and analysis; Division 73: advertising and market research; Division 74: other professional, scientific and technical activities; Division 80: security and investigation activities; Group 81.2: cleaning activities; and Division 82: office administrative, office support and other business support activities.

The indicators (see Table 1 below) do not cover all the activities mentioned. For example, in the case of services, the turnover variable does not cover computer and business services, while the indicator for the number of persons employed is covered. STS requirements, available only in English, gives a detailed list of all the indicators which the Member States must transmit to Eurostat.

Since the end of 2008, price indices are not only available for industrial output but for some services activities as well. However, the coverage of the service producer price indices is not yet fully implemented.

All features of transmission of short-term indicators to Eurostat, including coverage, are defined in Regulation EC No 1165/98, as amended by Regulation EC No 1158/2005 and the regulations implementing and amending these two instruments.

Table 1: Indicators covered by the STS Regulation, by domain or annex

Annex/domain	List of indicators
A-Industry	Production Turnover, domestic turnover, non-domestic turnover Number of persons employed, hours worked, gross wages and salaries Output prices, domestic output prices, non-domestic output prices Import prices
B-Construction	Production, production of buildings, production of civil engineering Number of persons employed, hours worked, gross wages and salaries Construction costs, material costs, wage costs Construction permits: number of dwellings, building permits: useful floor area in m2
C-Retail trade and repair	Turnover Number of persons employed Deflator of sales
D-Other services	Turnover Number of persons employed Producer prices

STS indicators are tools for formulating and monitoring the economic and monetary policy of the European Union and the euro area. They are generally supplied with a monthly frequency and cast light on recent developments in each Member State and in the European Union as a whole. STS data are in great demand for economic analysis in the European Commission and European Central Bank (ECB), national governments and central banks, companies and financial markets. STS indicators facilitate monitoring and decision-making and are also used in conjunction with other economic datasets, such as the national accounts (for example, gross domestic product).

Basically, STS data are derived from surveys of businesses. Use is also made of administrative data or other sources outside the national statistical systems.

Since the primary unit is the business or the production unit, preparing STS indicators involves maintaining business registers in the Member States.

Each Member State is obliged to transmit time-series relating to STS indicators to Eurostat, using a specified format. These data are compiled on the basis of elementary data (at the level of businesses, for production units) and aggregated by the countries to take account of the national industrial structure. A large majority of the indicators are published both nationally and in the Eurostat database, when they are not subject to confidentiality rules (Regulation (EC) No 223/2009 of 11 March 2009).

The STS regulations lay down the scope of short-term indicators, their definition, their form, their reference period, their level of detail, the deadlines for transmission, and the date that series should start. The methodological framework and data harmonisation are ensured by applying methods and definitions specified both in the Commission regulations and in a methodological manual for short-term indicators.

Moreover, the great majority of definitions of short-term indicators in the STS Regulation are consistent with international definitions, including value added, price indices, etc.

Eurostat assesses the Member States’ compliance with the STS Regulation twice a year.

The purpose of the STS Regulation is to harmonise the concepts used by the Member States. However, national requirements may lead the statistical institutes to calculate and publish nationally indicators with slightly different definitions. For example, the concept of the output price index in the STS Regulation refers to a price excluding value-added tax (VAT) or any other turnover tax. However, certain Member States use both this index and an index including VAT.

 

The index values in the national publications may also differ from those in European publications due to the fact that some Member States apply a methodology of chaining certain indicators, or apply a different base year than the one used by Eurostat.

Within industry, the STS Regulation defines the main industrial groupings (MIGs), which are intermediate goods, capital goods, durable and non-durable consumer goods and energy. These groupings are specific to Eurostat publications. Many countries apply the same groupings, while other countries and other organisations have adopted similar, but somewhat different definitions for groupings.

The European indices are based on a weighted average of the countries' indices. The weights correspond to each Member State's share in the total for the European Union or the euro area in respect to each activity. The weighting variables differ from one indicator to another. Hence, for the index of industrial production, the weights are based on value added; for the indices of turnover and prices, the weights are based on turnover; for the indices of number of persons employed and hours worked, the weights are based on the number of persons employed and hours worked, respectively; finally, for the wages and salaries index, the weights are based on wages and salaries. The weights are established for a base year, which is currently 2005.

Certain weights are confidential within a specified activity and/or a Member State. However, the national indices still contribute to the European aggregates.

Member States are obliged to transmit data at a certain level of detail. If one or two of the lower levels (NACE 4-digit level, for example) are lacking, Eurostat aggregates the national data to produce an aggregate index (at 3-digit level, for example) for the Member State, provided that the lowest levels (4-digit level) are available for 80 % of the weighted variables. The latest missing months are then estimated using an ARIMA model. The estimates contribute to the European aggregate.

For a given activity, Eurostat calculates European indices when real national data exceeds 60 % of the EU or euro area total weight. The missing countries data are estimated using an ARIMA model and are included in the estimates for European aggregates.

The timetable for publishing STS indicators for a given calendar year is normally announced in the Euro-Indicators release calendar in November of the preceding year. It meets the deadlines laid down in the STS Regulation and also the timetable of the Principal European Economic Indicators. For example, the index of industrial production must be transmitted for most of the large European countries within one month and 10 calendar days following the end of the reference period (e.g. the January index must be transmitted before 10 March). Eurostat prepares a press release for publication of the European results a couple of days later.

Revisions may be caused by several factors: additional information, methodological changes, changes in the base year, corrections of errors, or re-estimation of the seasonal adjustment coefficients. The data transmitted by the Member States may be revised several months after their first transmission in order to integrate new data. Eurostat processes the data received within 24 hours (one working day). Since the Member States are not synchronised in publishing their data and transmitting them to Eurostat on the same date, short-term indicators at the European Union level are thus revised very frequently.

The policy of certain Member States is to revise their data for the last x months, while others do not revise the data and treat them as final as soon as they have been published. National data revision policies may also vary from one indicator to another.

The time-series relating to short-term indicators are available on the Eurostat website, under the heading Industry, trade and services, in a database with more user-friendly tables for the most widely consulted indicators.

A dedicated section for short-term statistics brings together a newsletter which presents an overview of the latest developments in the European business economy, the Quarterly Panorama of European Business statistics publication, the latest press releases, and the data themselves, together with methodological information and links to STS regulations.

The time-series for short-term indicators published at a European level are used by other organisations such as the OΕCD and the ECB. Many countries also have links to the EU short-term statistics on their national statistical office Internet sites.

An index measures trends in a time-series. In the case of short-term business statistics, the indices represent the movements in an indicator (for example, industrial production) between a base year (2005 in the case of STS) and the current period. The index average is 100 for the base year. An index of 110 means that there has been a 10 % increase since the base period. An index of 90 means that there has been a 10 % decrease since the base period. Index movements may be expressed in index points (simply the difference between the two index levels) but it is more useful to express them as a percentage change. Index points are sensitive to the level of the index itself, while percentage changes are not.

Pursuant to the STS Regulation, Member States must provide Eurostat with good quality data. However, the national data transmitted are sometimes the result of statistical estimates which may be revised or which were imperfect at the time of transmission. These values are indicated in the database: certain data are estimated values (e) or provisional values (p) or sometimes estimates made by Eurostat itself (s). Some data are confidential and replaced by (c); these figures are used by Eurostat in calculating the EU or euro area totals.

A seasonally adjusted series is a time-series from which the effects of regular seasonal influences have been removed. Seasonal effects usually reflect the influence of the seasons themselves or social conventions (such as Christmas). In general, the seasonally adjusted series is smoother than the gross series and this further facilitates month-to-month comparisons. For example, gross figures for retail sales are higher in December than in November; the seasonally adjusted series allows for generally higher sales at Christmas and makes it possible to compare the December figures with those of preceding months. Eurostat calculates the adjustment only if nationally adjusted data are not available. Eurostat also calculates seasonally adjusted series for the European Union and the euro area on the basis of the Member States' working-day adjusted series.

For some economic activities, the number of weekdays has a significant impact on the level of a series. For example, monthly activity in retail trade depends on the number of Saturdays during the reference month. Series are working-day adjusted when the effects linked to the number of days of different types occurring in the reference month are removed from the series.

Most STS indicators are adjusted for working days and/or seasonally adjusted by using TRAMO and SEATS software, once the influence of working days or seasonal variations has been detected. During these adjustments, other calendar effects such as Easter or leap years are also taken account of.

Each Member State’s share in the European aggregates (EU or euro area) in terms of weights is given for each activity or group of activities. The files containing these weights are available on the Eurostat website and can be consulted here.

The weights are updated every five years or whenever there are new Member States in the composition of the EU or euro area aggregates.

The weights indicate the share of each Member State in the EU or euro area totals for the indicator in question. The weights currently relate to 2005 and to the EU-27 and euro area of 16.

The short-term statistics collected under the STS Regulation are exclusively indices.

Hence, the STS indicators provide no information as to level of prices or the level of turnover but only information as to how prices or turnover have risen or fallen in the previous month, the previous quarter, or the previous 12 months. For structural data, which provide a snapshot of the economy at a specific moment, please consult the annual structural business statistics data (see the section on Structural Business Statistics on the Eurostat website).

It is the objective of the production index to measure changes in the volume of output. It provides a measure of the volume change in value added over a given reference period [*]. The production index is disseminated in various ways: seasonally adjusted, corrected for working days, but also the trend. This final form thus reflects the trend in volume of value added (at constant prices).

[*] The term production index is understood to be the index of changes in value added, and does not correspond to the definition of production as used in the framework of national accounts or structural business statistics, it is however traditionally used in this field of short-term business statistics. The term index of value added is never used in practice. Since the index tracks changes in output at constant prices, it is sometimes referred to as the production volume index. In STS, the term production index refers to a volume index, i.e. based on constant prices.

Even though both the output price index and the consumer price index measure price trends for goods and services, they differ mainly because of their coverage, i.e. the type of prices and goods for which the prices have been collected.

The index of industrial output prices covers goods manufactured by domestic industries, while the all-items consumer price index covers both goods and services which are consumed by domestic households, regardless of whether they stem from national production or from imports.

The output price index for an economic activity measures the average price development of all goods resulting from that activity that are sold on the domestic market and/or foreign markets. The price used is the basic price, which excludes VAT and similar deductible taxes directly linked to turnover, as well as all duties and taxes on the goods and services invoiced by the unit.

For an identical product of national origin, the prices paid by households include not only the price when the good left the factory but also taxes as well as trade and transport margins.

The consumer price index measures changes in prices of consumer goods and services acquired, used or paid for by households. The coverage of the HICP is defined in terms of household final monetary consumption expenditure, by reference to the national accounts concepts of the European System of Accounts (ESA 1995). The prices measured are those actually faced by consumers, so, for example, they include sales taxes on products, such as VAT, and they reflect end-of-season sales prices.

The Member States' price indices are calculated on the basis of the prices of products or services in their national currency. For countries belonging to the euro area, the currency used between 1999 and 2002 may have been the national currency or the euro, or both. Certain enterprises adopted the euro as from 1 January 1999, others later. Given that the rate of exchange between the national currency and the euro was fixed during this period (1999-2002) price trends remain unchanged whether the prices are expressed in euros or in the national currency. For countries which have not adopted the euro, price indices are expressed in national currency terms.

The retail sales index is a business cycle indicator which shows the monthly activity of the retail sector, both in value and volume terms. It is a short-term indicator for final domestic demand. In order to eliminate price effects on turnover in retail sales, the STS Regulation also requires a deflator of sales. The deflator of sales is an index reflecting price changes in the goods retailed. The deflated turnover index thus represents a volume index of retail sales.

The STS Regulation requires national data on the number of persons employed. However, this indicator may be approximated on a temporary basis by using the number of employees.

The number of persons employed is defined as the total number of persons who work in the observation unit (factory, shop, office, etc.) as well as persons who work outside the unit who belong to it and are paid by it. It includes persons absent for a short period and also those on strike, but not those absent for an indefinite period. It also includes part-time workers who are regarded as such by the laws of the country concerned and who are on the payroll, as well as seasonal workers, apprentices and home workers on the payroll.

The number of persons employed excludes manpower supplied to the unit by other enterprises, persons carrying out repair and maintenance work in the observation unit on behalf of other enterprises, as well as those on compulsory military service.

The main difference between the number of persons employed and the number of employees results from the number of unpaid persons employed who are included in the first indicator but not in the second.

Full definitions of these two indicators are to be found in a Commission regulation.

Most of the data on employment are available on the Eurostat website under Population and social conditions; they are derived from the Labour Force Survey (LFS). For this survey, the statistical unit is the individual living in a private household. Employment data (for the number of persons employed, hours worked, etc.) are derived from the quarterly LFS.

The definition of persons employed is the same for labour market statistics and STS data, as is the definition of hours worked. The main difference between these two types of data lies in their sources: labour market data are collected from individuals in households, asking them in which industry they work, while STS directly relate to employment by businesses.

However, some countries use the labour force survey to estimate the number of persons employed and the hours worked for a given activity.

STS make it possible to monitor trends in employment within economic activities and are available only as indices, while other labour market data are based on absolute figures (e.g. the number of persons employed, or the number of hours worked).

The variable relating to the number of building permits is designed to anticipate trends in construction activity in terms of numbers of units. A building permit is an authorisation to commence work on a construction project. Hence it is the final stage before construction begins. This indicator can give a fair idea of the construction sector's workload in the near future. However, this may not be the case when a large number of permits are unused or are withdrawn. The data are not adjusted after the withdrawal of permits. Moreover, double counting may occur if the same construction project is recommenced later, with the issuance of a new permit, the first permit having expired.