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Structural business statistics introduced

From Statistics Explained

Summary

What are structural business statistics?

Structural business statistics (SBS) cover industry, construction, distributive trades and services. Presented according to the NACE activity classification, they describe the structure, conduct and performance of businesses across the European Union (EU). These statistics can be broken down to a very detailed sectoral level (several hundred economic activities). A subset of the SBS information is also available for European regions, as well as according to the size of enterprises.

The main indicators within SBS are generally collected and presented as monetary values, or as counts (for example, numbers of enterprises or persons employed); this is in contrast to short-term business statistics, where the data are presented as indices (generally in relation to a base year of 2005=100). Generally SBS does not collect information on products. The external trade and the production of specific products are covered by external trade statistics and/or PRODCOM. The exceptional presentation of products statistics within SBS concern for example multi-yearly data for products sold in distributive trades, or information on certain financial products (such as life assurance).

How are SBS measured?

SBS are based upon data for enterprises or parts of enterprises, such as local units which are often used for regional SBS data. Enterprises or other units are classified according to a classification of economic activities called NACE. An enterprise carries out one or more activities at one or more locations and may comprise one or more legal units. When an enterprise is active in more than one economic activity, then the value added and turnover that it generates, the persons it employs, and the values of all other variables will be classified under the enterprise’s principal activity; the principal activity is normally the one that generates the largest amount of value added.

Which parts of the economy does SBS cover?

SBS covers the ‘business economy’ (NACE Rev. 2 Sections B to N and Division 95) which includes:

  • industry;
  • construction;
  • distibutive trades;
  • services.

Note that financial services (NACE Rev. 2 Section K) are generally kept separate because of their specific nature and the limited availability of most types of business statistics in this area. As such, the term ‘non-financial business economy’ is often used to refer to economic activities covered by NACE Rev. 2 Sections B to J and L to N and Division 95.

SBS do not cover agriculture, forestry and fishing, nor public administration and (largely) non-market services such as education and health. For information on these areas of the economy, refer to national accounts by branch or other sector specific statistics.

Use and examples

SBS may be used to answer such questions as:

  • how much wealth is created in an activity and how many persons are employed?;
  • is there a shift from the industrial sector to the services sector and in which specific activities is this trend most notable?;
  • which countries are relatively specialised in the manufacture of a particular activity - for example, the manufacture of aerospace equipment?;
  • how productive is a particular activity, such as the chemicals sector, and how does it fare in terms of its operating profitability?

Legislation

SBS are compiled under the legal basis provided by Parliament and Council Regulation 0295/2008 and Council Regulation 0058/1997 (and later amendments) on structural business statistics, and in accordance with the definitions, breakdowns, deadlines for data delivery, and various quality aspects specified in their implementing regulations.

SBS consists of a horizontal module (Annex I), including a limited set of basic statistics for all market activities. Seven sector-specific annexes cover a more extended list of sector-specific characteristics. The sector-specific annexes are: industry (Annex II), distributive trades (Annex III), construction (Annex IV), insurance services (Annex V), credit institutions (Annex VI), pension funds (Annex VII) and business services (Annex VIII). Annex IX covers business demography statistics for all market activities.

SBS may be broken down by NUTS region or by enterprise size-class. In SBS, size-classes are defined by the number of persons employed, except for specific data series within retail trade activities where turnover size-classes are also used. A limited set of the standard SBS variables (for example, the number of enterprises, turnover, persons employed and value added) is available, mostly down to the three-digit (group) level of the NACE classification. The European Commission Recommendation (2003/361/EC), adopted on 6 May 2003, classifies SMEs according to their number of persons employed, annual turnover, and independence. For statistical purposes, SMEs are generally defined as those enterprises employing fewer than 250 persons. The number of size-classes available varies according to the activity under consideration. However, the main groups that are often used for analytical purposes and presenting the data include:

  • small and medium-sized enterprises (SMEs): with 1 to 249 persons employed, further divided into;
  • micro enterprises: with less than 10 persons employed;
  • small enterprises: with 10 to 49 persons employed;
  • medium-sized enterprises: with 50 to 249 persons employed;
  • large enterprises: with 250 or more persons employed.

Current legislation

Given the large number of revisions and amendments that have been made over time to the SBS Regulation, a process of recasting the legislation was concluded in March 2008.

The key implementing legislation includes the following:

Previous legislation

There have been considerable changes to the initial legislation adopted with respect to structural business statistics (SBS). The legislative history of the Regulation may be followed by referring to:

Although the following links have no legal value, they provide consolidated versions of the main implementing legislation prior to the recasting exercise:

Methodology

Classifications

As noted above, the enterprises which are surveyed for SBS are classified according to their principal activity and assigned to a particular NACE code. The revised NACE Rev. 2 classification was adopted at the end of 2006, and has since been progressively introduced. By 2010, the vast majority of SBS data were available according to the NACE Rev. 2 classification. Changes in the classification have allowed a broader and more detailed collection of information to be compiled on services, as well as providing the possibility to better identify new areas of economic activity (such as technology-producing sectors). The first reference year for which SBS data were collected under NACE Rev. 2 was 2008 (when some data were also collected using NACE Rev. 1.1). Starting with data for the 2009 reference year the information presented within SBS is displayed only in terms of NACE Rev. 2.

During 2010 data for the reference year 2008 based on NACE Rev. 2 was published for some of the SBS datasets. Existing SBS data presented in terms of NACE Rev. 1.1 will be maintained in the database for those users wishing to analyse historical series. Starting with data for the 2009 reference year the information presented within SBS will be displayed only in terms of NACE Rev. 2.

Policy context

The statistics collected within SBS are of use for following a number of policy areas which are generally under the auspices of the Directorate-General for Enterprise and Industry. The European Commission's enterprise policies aim to create a favourable environment for business to thrive within the EU, creating higher productivity, economic growth, jobs and wealth. Many of the policies that have been introduced in recent years have been aimed at reducing administrative burdens, stimulating innovation, encouraging sustainable production, and ensuring the smooth functioning of the EU’s internal market.

At the European Council meeting of 26 March 2010, EU leaders set out their plan for Europe 2020, a strategy to enhance the competitiveness of the EU and to create more growth and jobs. The latest revision of the integrated economic and employment guidelines (revised as part of the Europe 2020 strategy for smart, sustainable and inclusive growth) includes a guideline to improve the business and consumer environment and modernise Europe's industrial base. Additional information about the Europe 2020 strategy can be found on the Europe 2020 website. In October 2010, the European Commission presented a Communication on ‘An industrial policy for the globalisation era’, establishing a strategic agenda and proposing some broad cross-sectoral measures, as well as tailor-made actions for specific industries, mainly targeting so-called ‘green innovation’ performance of various sectors.

The central principles governing the internal market for services guarantee EU enterprises the freedom to establish themselves in other Member States, and the freedom to provide services on the territory of another EU Member State other than the one in which they are established. These central principles governing the internal market were set out in the EC Treaty. The objective of the Services Directive 0123/2006 of 12 December 2006 is to eliminate obstacles to trade in services, thus allowing the development of cross-border operations. It is intended to improve competitiveness, not just of service enterprises but also of European industry as a whole. In December 2006, the Directive was adopted by the European Parliament and the Council with transposition by the Member States required by the end of 2009.

Enterprise policy on small and medium-sized enterprises (SMEs) is centred upon screening all new EU laws for their friendliness to smaller enterprises, with an attempt to reduce red-tape. SMEs are often referred to as the backbone of the European economy, providing a potential source for both jobs and economic growth. In June 2008 the European Commission adopted a Communication on SMEs referred to as the ‘Small business act for Europe’. This aims to improve the overall approach to entrepreneurship, to irreversibly anchor the ‘think small first’ principle in policymaking from regulation to public service, and to promote SMEs' growth by helping them tackle the remaining problems which hamper their development. The Communication sets out ten principles which should guide the conception and implementation of policies both at EU and national level to create a level playing field for SMEs throughout the EU and improve the administrative and legal environment to allow these enterprises to release their full potential to create jobs and growth. It also put forward a specific and far reaching package of new measures including four legislative proposals which translate these principles into action both at EU and Member State level.

The Regional Policy Directorate-General is responsible for measures to assist the economic and social development of the less-favoured regions within the EU. Its aim is to promote a high level of competitiveness and employment by helping the least prosperous regions and those facing structural difficulties.

Indicator definitions for key structural business statistics

SBS contain a comprehensive set of basic variables describing business demography and employment characteristics, as well as monetary variables (mainly concerning operating income and expenditure, or investment). In addition, a set of derived indicators has been compiled: for example, ratios of monetary characteristics or per head values.

Statistical data

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