12 October 2009 EU-OECD Workshop Introducing NACE rev 2 in EU Short-term business Statistics Brian Newson Head of STS unit Eurostat

12 October 2009 EU-OECD Workshop Coverage of Short-term business Statistics STS Regulation 4 annexes: A. Industry B. Construction C. Retail trade D. Other services

12 October 2009 EU-OECD Workshop A. Industry Industrial production Turnover New orders received Employment (number, hours worked, wages) Output prices Import prices All broken down by NACE except import prices CPA 4-digit for big countries, 2-digit for smaller.

12 October 2009 EU-OECD Workshop B. Construction Production (Building / civil engineering) Building permits Employment (number, hours worked, wages) Construction costs (materials, labour costs) Just NACE F Construction –New component “Development of building projects”.

12 October 2009 EU-OECD Workshop C. Retail trade Turnover current prices Turnover volume (deflated) –Breakdown food / non-food, 6 more detailed product categories Employment New component “Retail sale of automotive fuel”

12 October 2009 EU-OECD Workshop D. Other services “Other services” defined by NACE list (covers most market services, except banking, insurance, R&D) Turnover (current prices) Output prices (SPPI) – shorter list of NACE Employment Classification basically 2-digit NACE. “Other services” is where new NACE rev 2 introduces most extra detail

12 October 2009 EU-OECD Workshop Introducing NACE rev 2 into Regulations NACE rev 2 as classification Regulation 2006 Specified changeover dates for each statistical area Changeover STS first monthly data for January 2009 Or Q for quarterly indicators Note Structural business statistics 2008 data late 2009 Note National accounts changeover 2011.

12 October 2009 EU-OECD Workshop Preparatory steps in STS STS Regulation modified to fix exact target (coverage of industries and level of detail) task force which made recommendations –Micro methods (reclassifying enterprises) –Macro methods (matching old and new NACE headings) Benefitted non-EU experience Quarterly monitoring reports on progress in countries 2008 “Backcasting” Regulation – back to at least 2000 Compromise between –needs of users and seasonal adjustment –reliability of backcasting.

12 October 2009 EU-OECD Workshop Micro methods 1. Micro method Start with double coded business register (one year or several) Recode all enterprises and rework survey results Time-consuming. Difficult for long series (restructuring, reclassification) Many MS adopted micro approach for

12 October 2009 EU-OECD Workshop Macro methods 2. Macro method Start from published data (4-digit) Transition matrix maps headings NACE rev 1 to rev 2 Half cases 1:1. Several almost 1:1 (  2/3 headings) Correspondence better at 2-digit than 4-digit NACE Many MS macro method Linking micro and macro

12 October 2009 EU-OECD Workshop Conversion process

12 October 2009 EU-OECD Workshop New base year 2005 At the same time as introducing new NACE modify weights from “2000” to 2005 Complicated by the fact Structural Business Statistics will only adopt NACE rev 2 for the data of 2008 in late So 2005 weights had to be estimated by mapping old NACE into new. Weights apply within countries to aggregate up to total industry and between countries to calculate EU total indices.

12 October 2009 EU-OECD Workshop Work in countries Countries had most of the work. Generally very successful. Congratulate countries. Most data for January 2009 on time (or 3-4 days late) February transmission all normal. Few areas impossible. Some services NACE rev 2 more detailed – in a few cases data was never collected in the past. Begins Eurostat web site entirely NACE rev 2 since April 2009 (monthly) or June 2009 (quarterly indicators)

12 October 2009 EU-OECD Workshop Total industry – a comparison of old and new

12 October 2009 EU-OECD Workshop Next steps Problems with seasonal adjustment –Caused by NACE rev 2, or abrupt change in trend ? Currently collecting detailed information from EU countries on how they did backcasting and the weights for 2005 –Could be interesting for statisticians and a summary for users. –Ready at end of 2009