Short-term business statistics - legal base
From Statistics Explained
This article gives an overview of the legal texts underlying the calculation and dissemination of European Union (EU) short-term statistics (STS). It starts off with the first and most important one, Council Regulation 1165/98 of 19 May 1998, the so-called STS Regulation.
Since 1998 many aspects of the STS Regulation have been amended in subsequent Regulations (see below), but a major change took place in 2005 with Regulation 1158/2005
Basis: the 1998 STS Regulation
Regulation 1165/98 in its present form outlines as a general aim the establishment of a common European framework for the analysis of the business cycle by collecting information on the supply and demand, on production factors and prices (article 1).
It defines and limits the principal scope of STS by stipulating that STS shall cover market activities of statistical units in mining, quarrying, manufacturing, wholesale, retail trade, services, and several other economic sectors which are identified by reference to the Statistical classification of economic activities in the European Community (NACE rev. 2) (article 2) and how such a collection should take place. In particular it allows Member States to use different sources to obtain the data (article 4).
The Regulation also defines how often data have to be produced (periodicity, article 5) and in what detail (article 6 and annexes, see below). It prescribes that data are to be processed according to common rules to ensure comparability (article 7), how they are transmitted to the EU's statistical office Eurostat (article 8) and how confidentiality of sensitive data is guaranteed (article 9). The Regulation demands that national statistical authorities ensure the quality of the data (i.e. that they truly reflect real developments, article 10) and that the weighting system of indicators is renewed every five years (article 11).
Apart from such strictly statistical issues the STS Regulation also deals with a number of procedural questions. It demands the publication of a manual at regular intervals (article 12) and also the presentation of regular reports on the costs and benefits of STS (article 14). Transition periods during which new STS rules have to be implemented must not be longer than five years (article 13). Concrete implementing measures are decided with a special committee procedure regulating the roles of the European Commission and the Member States (articles 17, 18). The Regulation also ensures coordination within Member States (article 15) and foresees the possibility of pilot studies (article 16).
Annexes to the STS Regulation
Annexes A – D of Regulation 1165/98 (article 3) stipulate in detail the specific requirements for the production of the statistical variables under the STS Regulation. The annexes provide detailed requirements as regards:
- scope (economic activities);
- observation unit (statistical unit from which data are collected);
- list of variables;
Policy backgrounds and historical overview
The evolution of short-term statistics has followed that of European Union policies. For the first 40 years, most Community policies were structural and accordingly EU statistics mainly represented structural facts which also meant that they were in most cases only published annually or sometimes even less frequently. With the gradual development and implementation of the economic and monetary union, short-term statistics were needed in order to manage monetary policy.
Council Regulation 1165/98, the STS Regulation, established the legal basis for the production of short-term indicators for manufacturing industry, construction, retail trade and services. The 1998 Regulation already provided most of the basic STS elements described above.
In 2001 two important implementing measures for short-term statistics were adopted:
- Regulation 586/2001 defined main industrial groupings (MIGs) for the purpose of short-term statistics;
- Regulation 588/2001 provided more precise definitions for the variables covered by STS, e.g. production, turnover, sales etc.
By the early 2000s, the European Commission and the European Central Bank (ECB) were focusing on short-term developments in the newly-created single market and the euro area. It was clear that better data were needed. In addition, the ever-increasing importance of services in European economies could not remain largely unmeasured. In 2002 Eurostat started to take initiatives towards amending the STS Regulation, with two major objectives: to accelerate the transmission of data and to include output prices for services, missing in the 1998 Regulation. The STS Regulation was amended on 6 July 2005 with Regulation 1158/2005 requiring Member States to provide a service producer price index (SPPI) (output price index for services) broken down by type of service, on a quarterly basis, from 2006 onwards (although there longer transition periods were foreseen for smaller countries). In addition to the output price index for services a new indicator for industrial import prices was introduced.
Regulation 1158/2005 modified several articles of the 1998 STS Regulation. It also introduced the possibility of European sample schemes as one method to obtain the data for some of the variables under STS. The details for European sample schemes in the framework of STS were later set out more specifically in Regulation 657/2007 of 14 June 2007 (see below).
- Regulation 1503/2006 replaced Regulation 588/2001 (see above) and provided new definitions of STS indicators. For the construction sector (annex B) the new orders received, new orders received for building construction and new orders received for civil engineering were deleted from the list of STS indicators.
- Regulation 1502/2006 provided new rules with regard to derogations for individual Member States, in order to facilitate the introduction of the changes required by Regulation 1158/2005.
- Regulation 656/2007 amended Regulation 586/2001 (see above) on main industrial groupings in order to take into account the transition from the classification of economic activities NACE Rev.1 to NACE Rev.2.
- Regulation 657/2007 implemented rules for the use of European sample schemes in STS. European sample schemes could be used for the indicators industrial non-domestic new orders, industrial output prices of the non-domestic market and for industrial import prices.
- Regulation 472/2008 specified a number of technical details related to the introduction of the new statistical classification of economic activities, NACE Rev. 2, into short-term statistics. These details included the first base year to be applied (2005), and the features of historical data recalculated in terms of NACE Rev. 2 (level of detail, form, first reference period, reference period)
- Regulation 1178/2008 introduced further adaptations for European sample schemes with relation to the new economic classification.
- Regulation 329/2009 introduced hours worked and gross wages and salaries for retail trade and services as new short-term statistics indicators (to be provided from 2013 onwards, with time series going back to at least 2010).
Other legal acts impacting STS
Some other Regulations, although not specifically drafted in the context of short-term statistics, nevertheless had important repercussions for their collection and calculation:
- Regulation 696/93 of 15 March 1993 on the statistical units for the observation and analysis of the production system in the Community;
- Regulation 1893/2006 of 20 December 2006 establishing the statistical classification of economic activities NACE Revision 2 and amending Council Regulation (EEC) No 3037/90 as well as certain EC Regulations on specific statistical domains Text with EEA relevance.