Services turnover indicator overview

From Statistics Explained

Data from January 2012, most recent data: Further Eurostat information, main tables and database.

This article provides an overview of the development of the services turnover indicator in the European Union (EU), the euro area and the European Member states over recent years and describes how it is calculated. The index of turnover in other services is a business cycle indicator which measures the quarterly development of turnover in the European service industries with the exception of services in retail and wholesale trade for which a separate indicator exists (hence "other" services; in this article the "other" will be omitted for easier readability).

The data presented in this article are taken from European short-term statistics (STS). The data on services collected under the short-term statistics regulation encompass mainly – but not only (see below) – services consumed by businesses, therefore they are often referred to as "business services".

Figure 1: Turnover in services (seasonally adjusted), EU-27 and Euro area (2005=100), Source: Eurostat (sts_setu_q)

Figure 2: Turnover in main service groups (seasonally adjusted), EU-27 (2005=100), Source: Eurostat (sts_setu_q)

Table 1: Annual growth rate for the turnover in services (%), Source: Eurostat (sts_setugr_a)

Main statistical findings

In 2000 and early 2001 the turnover of European service industries covered by the STS regulation expanded rather quickly and afterwards moved on a somewhat slower but still steady growth path. A rapid decline set in after the second quarter of 2008 and within a bit more than a year turnover in the EU-27 (and likewise in the euro area) declined by almost 8 %. In the last quarter of 2009 a steady recovery set in and the latest data (third quarter 2011) indicate that the pre-crisis level has already been regained for the EU-27 (Figure 1).

Short-term statistics cover – with some exceptions – the following five groups according to NACE Rev. 2 (NACE code in brackets): transportation and storage (H), accommodation and food services (I), information and communication services (J), professional, scientific and technical activities (M) and administrative and support services (N). The development of the turnover for these main service activities is represented in Figure 2. Transport and storage, professional, scientific and technical as well as administrative and support services show a rather similar development. They are also the biggest of the five service industries in terms of value added and therefore largely influence the development of turnover for total services. Accommodation and food services and likewise information and communication services show a steadier turnover development.

Table 1 provides a breakdown of the development (growth rates) of the service turnover in the Member States of the EU. In 2009 all Member States experienced a decline in services, in many countries the negative rates of change even reached double-digit level (in the Baltic countries negative rates even surpassed -20 %). In Spain, Estonia and Latvia service turnover already began to decline in 2008.

Table 1 also indicates very different dynamics in the turnover development between Member States. On average the service turnover increased by around 45 % between 2000 and 2010. In Malta, the country with the lowest growth, it increased by only 8.3 % over ten years, i.e. 0.8 % per year on average. Other examples of countries with a relatively low turnover growth were Germany (average 1.8 %), Austria (average 2.68 %), Spain (average 2.6 %) and France (average 2.9 %). In Romania, the country with the fastest growth, the turnover index increased by more than 520 % over ten years or 20.0 % on average. Other countries which experienced a rapid growth were Luxembourg (average 13.1 %), Latvia (average 11.5 %), Lithuania (average 10.2 %) and Bulgaria (average 10.3 %).

In most countries the indicator of service turnover peaked around the second quarter of 2008 and reached a low about five quarters later. After reaching a bottom around the second quarter 2009 service turnover recovered again relatively steadily. Two years after the crisis (third quarter 2011) several countries are already close the pre-crisis levels (e.g. Latvia, Lithuania, Luxembourg, Finland) or have surpassed it (Belgium, Germany, France, Austria, Sweden, United Kingdom). Rather special developments can be observed in Greece were the level of turnover has steadily declined since 2008 and in Poland where the crisis only caused a rather shallow dip in the development of service turnover and where the current levels are already more than 20 points above the pre-crisis high.

Data sources, aggregation and availability

The definition of turnover is rather straightforward. It comprises basically what is invoiced by the seller. Rebates and price deductions are taken into account as well as special charges that the customer might have to pay. Turnover does not include VAT or similar deductible taxes.

Information on service turnover is most often collected by business surveys. However, quite a number of National Statistical Institutes rely on administrative sources, i.e. VAT declarations, to obtain the data. There are also cases where both methods are used; for example bigger enterprises might be asked to contribute to a survey whereas the data for smaller enterprises area collected from VAT registers.

According to the short-term statistics regulation data on service turnover have to made available by the National Statistical Institutes at least on a quarterly basis. However, around half of the Member States collect these data (at least for some services) on a monthly basis. Not in all cases can these dates be published by Eurostat (e.g. for reasons of confidentiality). Countries for which aggregated monthly data are published are the Czech Republic, Spain, France, Luxembourg, Portugal, Slovenia, Finland and the United Kingdom. European aggregates are calculated by summing up weighted national indices for individual service activities. The weights correspond to the share of the countries in the turnover of service activities in the base year.

All results for the indicator of turnover in services are published on the Eurostat website.

Context

The turnover index for services is one of the Principal European economic indicators. It is one of the relatively few available indicators for services and is used to analyse business cycle trends in the service industry and as input for national accounts statistics.

Further Eurostat information

Publications

• Business services: Recent economic developments - Statistics in focus 35/2011
• Quarterly panorama of European business statistics

Database

• Short-term business statistics (sts), see:

Trade and services (sts_ts)

Other services (sts_os)

Turnover index (NACE Rev.2) (sts_os_t)

Dedicated section

• Short-term business statistics

Methodology / Metadata

• Methodology of short-term business statistics – interpretation and guidelines
• Methodology of short-term business statistics – associated documents
• STS Metadata in SDMX format
• More information on metadata in Eurostat

See also

• Retail trade and repair statistics - NACE Rev. 1.1
• Services statistics - short-term developments
• Short-term business statistics - background articles