Development and producton of an Aggregated SPP Fnal Techncal mplementaton Report Marcus Frdén, Ulf Johansson, Thomas Olsson Servces Producer Prce ndces, Prce Statstcs Unt, Statstcs Sweden 2010
ntroducton The Servce Producer Prce ndex (SPP) s a producer prce ndex that ams to measure the average prce development n the producer stage n Swedsh ndustres that provde servces. These are defned as sectons H to S (dvsons 49-96) n SN 2007 (The Swedsh verson of NACE Rev. 2). Servces Producer Prce ndces (SPPs) were prevously only calculated by product groups. As the product group ndces moved n dfferent drectons t was hard to get an overall pcture of the prce movements n the servce sector. Snce the begnnng of the current decade there has been a rapd development of new ndces. Because the number of SPPs has ncreased, the possblty to provde an overall pcture of the prce movements n the servce sector has mproved. Accordngl Statstcs Sweden started to calculate an aggregated SPP ( Total SPP ) that has been publshed snce the frst quarter of 2008. The aggregated ndex has a busness to all (B2A) approach and ncludes sales of servces to busnesses, publc sector and consumers. SPP manly measures prces for busness to busness (B2B) servces, snce servces sold to consumers are ncluded n the Consumer Prce ndex (CP). To cover as much as possble of the servce producton n the Swedsh economy the aggregated SPP conssts of a weghted and combned computaton of avalable prce ndces for busness servces (SPP), and a number of consumer prce ndces (CP) for servces. The CPs that are ncluded are requred to be relevant from a producer perspectve, and some ndces are therefore adjusted to fulfl ths requrement (for example by excludng effects of changed taxes). The ndex for Publshng, SPN 58.1, was prevously wthn the PP frame (as a part of the old SPN 22.1). t s stll beng produced by the PP group but s now ncluded n the aggregated SPP (and not n PP). The aggregated SPP covers the perod from 2005 untl the present date. t was frst calculated and publshed n accordance wth SPN 2002 (the Swedsh verson of CPA 2002) but snce 2009 t has been calculated and publshed n accordance wth SPN 2007 (CPA 2008). Durng the end of 2008 and the begnnng of 2009 much work was done on desgnng the new aggregates, calculatng new weghts etc. n 2009 sx new product group ndces (Rentng of machnery and equpment, ndustral cleanng, Market research, Techncal testng, Ralway transport, and Publshng) were ncluded n the aggregated SPP, and from 2010 two more product group ndces (Management consultancy and News agency actvtes) wll be ncluded. The ndex wll then cover around 70 percent of Sweden s servce output. Publshed aggregates The aggregated SPP has snce 2009 been bult wth seven aggregates whch n turn consst of a number of ndustres. The aggregates have been created n accordance wth the SN 2007 classfcatons to the greatest extent possble. Bankng servces s an excepton, whch n accordance wth SN 2007 s ncluded n secton K, but s lsted under secton M n the SPP.
Ths s due to confdentalty that exsts n the bank ndces of the Servce Producer Prce ndex and the CP. From 2009 the followng seven aggregates have been publshed: Transport and storage servces Hotel and restaurant servces nformaton and communcaton servces Real estate servces Professonal, scentfc, techncal and fnancal servces Admnstratve and support servces Other Servces The ncluded ndces are presented below. (S) means that the ndex s confdental and not publshed separately. 49-53 Transport and storage servces 491 CP Ral transport servces for passengers 492 SPP Ral transport servces for freght (S) 49319 SPP Publc Transport actvtes (S) 49311 CP Regonal bus traffc 4932 CP Tax servce 4941 SPP Road transport of goods 501&503 CP Water transport of passengers 502&504 SPP Water transport of goods 51101 SPP Ar transport of passengers 511 CP Ar transport 51102 CP Package tours/charters 51211 SPP Ar transport of freght (S) 521 SPP Warehousng and storage 5224 SPP Cargo handlng 5229 SPP Other transportaton support actvtes 52219 CP Parkng 531 SPP Postal actvtes under unversal servce oblgaton (S) 532 SPP Other postal and courer actvtes 55-56 Hotel and restaurant servces 551 SPP Hotels 553 CP Campng grounds 56 CP Food and beverage servce actvtes 58, 61-63 nformaton and communcaton servces 581 PP Publshng of books, perodcals and other publshng actvtes 5829 SPP Other software publshng 61 SPP Telecommuncatons 62 SPP Computer programmng, consultancy and related actvtes 6311 SPP Data processng, hostng and related actvtes
68 Real estate servces 68201 CP Rentng and operatng of own or leased real estate 68202-3 SPP Rentng of premses 68310 SPP Real estate agences 68320 SPP Property management 64, 69, 70, 71, 73 Professonal, scentfc, techncal and fnancal servces 6419 SPP Bankng servces 64 CP Bankng servces 691 SPP Legal actvtes 692 SPP Accountng, bookkeepng and audtng actvtes 702 SPP Management consultancy actvtes 711 SPP Archtectural and engneerng actvtes and related techncal consultancy 712 SPP Techncal testng and analyss 731 SPP Advertsng 732 SPP Market research and publc opnon pollng 77, 78, 80, 81 Admnstratve and support servces 771 SPP Rentng and leasng of motor vehcles 7722 CP Rentng of vdeo tapes and dsks 773 SPP Rentng and leasng of other machner equpment and tangble goods 732 SPP Temporary employment agency actvtes 80 SPP Securty and nvestgaton actvtes 95-96 Other servces 9511 SPP Repar of computers and perpheral equpment (S) 96011 SPP ndustral cleanng (S) 96012 CP Consumer laundry 96021 CP Hardressng 9603 CP Funeral and related actvtes 9604 CP Physcal well-beng actvtes Weghts The calculatons of the weghts for the aggregated Servce Producer Prce ndex for the new nomenclature requred a number of assumptons. Calculatons n accordance wth the old classfcaton manly used estmates of producton per product group/ndustry from the Natonal Accounts. The problem s that the Natonal Accounts wll contnue to calculate n accordance wth SN 2002 untl 2011. The soluton was to use a matrx that has been produced by Statstcs Sweden to estmate relatons between the two nomenclatures. The relaton between SN 2002 and SN 2007 was estmated n several stages. The frst step was to fnd the ndustres that corresponded to SN 2002 n SN 2007. The second step was to estmate how much of the value from each ndustry accordng SN 2002 was also n SN 2007. Ths was done by usng the matrx. n many cases the relatonshp was one to one but some ndustres were more complcated. The data processng ndustres were especally
problematc (man group 72 n SN 2002) snce they were dvded nto several dfferent ndustres wth several cross relatonshps. Both the producton values from the Natonal Accounts and the matrx refer to 2006 and therefore the weghts were re-calculated to the prce level of 2008. There were a number of specal cases because some ndces were mssng, especally for the early years 2005 and 2006. n those cases, the values were moved over to nearby ndustres. ndex calculatons The aggregated SPP s calculated n two ways: one calculaton s made n Excel and an equvalent calculaton s made n SAS. n both these calculatons, the ndex for the current quarter, the quarterly change, the annual change and the effect on the total ndex s calculated. The calculaton method s descrbed below. ndex ndces per aggregate are calculated by weghng together the product group ndces arthmetcally. Wth the help of the ndex fgures of the aggregates, an arthmetcally weghted average ndex (the total SPP) s calculated wth base quarter 4 year y-1. q V V q, where s the aggregate and V s the weght of the aggregate for year y. Ths s then rounded off to two decmals. The lnk (ndex fgure) s then chaned to the chaned ndex fgure for quarter 4 year y-1 Y 1 q 100 Y, q4 q 2005 4 Y 1, q4 y 1, q4. 1 2005, q Y 2005 4 q 1 2004, q4 The chaned ndex fgure that wll be publshed s then rounded off to one decmal. Quarterly change The quarterly change s calculated by dvdng the current chaned ndex fgure wth the chaned ndex fgure n the prevous quarter. The ndex fgures that are used are the same as those found n the Statstcal Database, so that users can calculate the same fgures of change. Quarterly change q q 1 q 1 100 Annual change The annual change s calculated by dvdng the current chaned ndex fgure wth the chaned ndex fgure of the prevous year for the correspondng quarter. The ndex fgures that are used are the same as those found n the Statstcal Database, so that users can calculate the same fgures of change.
Annual change q y 1, q y 1, q 100 Effect The effect of the aggregate's change quarterly change on the total ndex s calculated by standardsng the quarterly change n ndex unts between the current quarter and the prevous quarter to quarter four n year y-1. The chaned ndex numbers are used (2005=100). Ths standardsed change s then multpled wth the weght proporton of the aggregate (at the prce level n quarter four n year y-1).. Ths tells us how much (n ndex unts) each aggregate has nfluenced the total SPP. q, q 1, V Effect V y 1, q4, How the calculatons are made n Excel Every quarter the admnstrators enter ndex fgures for each ndustry (ncludng the CP ndces) nto an Excel fle. All ndex fgures must then be checked by another admnstrator and approved before calculatons are begun. The fle s named after the current quarter and the ndex that s entered has Quarter 4 of the prevous year as base. These ndex fgures are then exported to another Excel fle where the ndex for the seven aggregates and the total ndex wth Quarter 4 of the prevous year as base are calculated. Both the aggregates and the total ndex are weghted together arthmetcally. These ndces are then exported to another spreadsheet tab n the same fle where the calculatons of the ndex wth the base 2005=100 and the quarterly and annual changes for the aggregates and the total ndex are carred out. The ndex and changes are rounded off wth one decmal. n the producton of the fourth quarter each year, the average for the year s calculated for the aggregate and the total ndex. How the calculatons are made n SAS Data from the Excel fle where the admnstrators enter the quarterly ndex fgures s exported to a specal Excel fle that s used as an ndata fle to the SAS calculaton. Ths fle also contans weghts. Ths data s then read n the SAS program that calculates the ndex fgures for the current quarter and produces three reports: 1. G_1 - a lst of the ndex fgures for ndustres that are not approved by backup admnstrator n the ndata fle 2. G_2 - a lst of the ndustres that have a quarterly change greater than 5% 3. PM - shows how much each ndustry and the aggregate contrbute to the quarterly change of the total SPP. Ths s used as a bass for the press release.
Results 2005 2006 2007 2008 2009 Servce producer prce ndex Quarter 1 99,1 100,9 102,3 104,9 107,3 Quarter 2 99,9 101,0 102,8 106,0 107,0 Quarter 3 100,4 101,0 103,3 106,8 107,4 Quarter 4 100,6 101,4 104,0 107,2 107,7 Annual average 100,0 101,1 103,1 106,2 107,4 Transport and storage servces Quarter 1 98,3 102,5 103,6 108,3 112 Quarter 2 99,1 103,2 104,8 109,7 110,2 Quarter 3 100,6 103,5 106 111,8 110,9 Quarter 4 102,0 103,8 106,6 112,4 110,6 Annual average 100,0 103,3 105,3 110,6 110,9 Hotel and restaurant servces Quarter 1 99,1 102,0 104,9 109,0 113,3 Quarter 2 99,8 103,0 105,9 110,8 113,5 Quarter 3 100,0 102,5 106,2 112,0 113,9 Quarter 4 101,2 103,9 107,5 112,8 115,6 Annual average 100,0 102,9 106,1 111,2 114,1 nformaton and Quarter 1 100,5 98,7 97,7 99,3 98,8 communcaton servces Quarter 2 100,9 97,3 97,7 99,6 98,6 Quarter 3 99,5 96,9 98,0 99,5 99,2 Quarter 4 99,1 96,9 98,8 99,3 98,6 Annual average 100 97,5 98,1 99,4 98,8 Professonal, scentfc, Quarter 1 98,1 100,6 103,5 105,7 107,3 techncal and fnancal servces Quarter 2 99,7 100,5 103,0 106,0 105,6 Quarter 3 101,6 101,3 103,7 106,6 106,5 Quarter 4 100,6 101,4 104,7 107,3 107,7 Annual average 100,0 101,0 103,7 106,4 106,8 Real estate servces Quarter 1 99,6 101,1 102,9 104,2 107,5 Quarter 2 100,0 101,2 103,4 106,4 110,1 Quarter 3 100,1 101,4 103,4 106,6 110,3 Quarter 4 100,2 101,6 103,6 106,7 110,3 Annual average 100,0 101,3 103,3 106,0 109,6 Admnstratve and Quarter 1 97,9 102,3 105,5 107,4 110,8 support servces Quarter 2 101,8 103,5 107,6 108,4 111,3 Quarter 3 98,1 102,0 106,6 108,1 109,9 Quarter 4 102,1 103,9 107,9 109,0 111,2 Annual average 100,0 102,9 106,9 108,2 110,8 Other servces Quarter 1 98,8 101,5 103,2 106,4 109,3 Quarter 2 99,3 102,1 103,7 107,0 109,7 Quarter 3 100,9 102,2 103,9 107,6 110,0 Quarter 4 101,0 102,9 105,0 108,4 110,4 Annual average 100,0 102,2 104,0 107,4 109,9
Methodologcal consderatons The most dffcult work when adaptng the aggregated SPP to SPN 2007 was how to obtan adequate weght data. Snce NA wll not start usng the new nomenclature untl 2011 the weght calculatons wll contnue to be complcated untl at least 2012. For 2010 the weghts wll be calculated n the same way as for 2009, usng the matrx that has been produced by Statstcs Sweden to estmate relatons between the two nomenclatures. But nstead of updatng producton values from 2006 to 2008 s prce level, producton values from 2007 wll be updated to 2009 s prce level. The same procedure wll be used untl NA can delver producton values n accordance wth the new nomenclature. Apart from decdng how the aggregates should be desgned and how the weghts should be calculated, the man methodologcal consderaton was whether the aggregated SPP should have a busness to busness (B2B) or a busness to all (B2A) approach. When dscussng ths ssue wth colleagues from other European countres t seems lke the B2A approach wll be used n the future by most countres. Snce Statstcs Sweden wants to cover as much of the servce producton n the Swedsh economy as possble, and consderng that Eurostat has shown a large nterest n B2A prce ndces, we are certan that the B2A approach s the most adequate. Future plans Durng 2010 a new producton system wll be developed for SPP that s expected to ncrease the relablty of the calculatons. Startng n 2011 all calculatons for the SPP are expected to be made n ths system. Presentl there are no plans for any new ndces to be ncluded n the aggregated SPP. Perhaps an ndex for healthcare wll be developed n the comng years. f ths ndex s of good qualty t wll probably be ncluded n the aggregated SPP.