1. Federal Statistical Office of Germany FSO Germany - Peter Roemer - Division Prices - UNECE/ILO Meeting on Consumer Price Indices Geneva, 8 - 9 May 2008 The integration of CPIs and PPIs for services in Germany Joint UNECE/ILO Meeting on Consumer Price Indices

2. Federal Statistical Office of Germany FSO Germany - Peter Roemer - Division Prices - UNECE/ILO Meeting on Consumer Price Indices Geneva, 8 - 9 May 2008 Slide 2 EU legislation and the role of international cooperation Provision of harmonised indices of consumer prices (HICP) and of producer price indices for services (SPPI) is defined in detail by EU-regulations Voorburg Group (subgroup of UN) puts emphasis on developing methodology for service statistics Eurostat/OECD edited „methodological guide for developing producer price indices for services“ (in 2005)

3. Federal Statistical Office of Germany FSO Germany - Peter Roemer - Division Prices - UNECE/ILO Meeting on Consumer Price Indices Geneva, 8 - 9 May 2008 Slide 3 Methodological aspects of CPI and SPPI domestic producers foreign customers domestic customers domestic consumers SPPI indicate the development of output prices of domestic producers domestic consumers domestic producers and traders forgeign producers and traders CPI indicate the development of purchase prices of domestic consumers

4. Federal Statistical Office of Germany FSO Germany - Peter Roemer - Division Prices - UNECE/ILO Meeting on Consumer Price Indices Geneva, 8 - 9 May 2008 Slide 4 Some technical aspects: CPI vs. SPPI Consumer Price Index (CPI) Producer Price Indices for Services (SPPI) value-added tax includedexcluded periodicity monthlyquarterly base year 20052006

5. Federal Statistical Office of Germany FSO Germany - Peter Roemer - Division Prices - UNECE/ILO Meeting on Consumer Price Indices Geneva, 8 - 9 May 2008 Slide 5 Business to Business- and Business to All- approach OECD/Eurostat task force:  all sectors including the public sector or private householders EU-regulation 1158/2005 (concerning short term statistic  STS-regulation)  covers services delivered to customers that are enterprises all business to business to business Definitions for SPPI:

6. Federal Statistical Office of Germany FSO Germany - Peter Roemer - Division Prices - UNECE/ILO Meeting on Consumer Price Indices Geneva, 8 - 9 May 2008 Slide 6 List of SPPI activities covered by the STS- regulation Transport, storage and communication: 60.24 Freight transport by road 61.1 Sea and coastal water transport (freight, passengers) 62.1 Scheduled air transport (freight, passengers) 63.11 Cargo handling 63.12 Storage and warehousing 64.11/12 National post activities, courier services 64.2 Telecommunications

7. Federal Statistical Office of Germany FSO Germany - Peter Roemer - Division Prices - UNECE/ILO Meeting on Consumer Price Indices Geneva, 8 - 9 May 2008 Slide 7 Business activities: 72 computer and related activities 74.11 Legal activities 74.12 Accounting, bookkeeping and auditing activities; tax consultancy 74.13 Market research and public opinion polling 74.14 Business and management consultancy activities 74.2 Architectural and engineering activities 74.3 Technical testing and analysis 74.4 Advertising 74.5 Labour recruitment and provision of personnel 74.6 Investigation and security activities 74.7 Industrial cleaning List of SPPI activities covered by the STS- regulation

8. Federal Statistical Office of Germany FSO Germany - Peter Roemer - Division Prices - UNECE/ILO Meeting on Consumer Price Indices Geneva, 8 - 9 May 2008 Slide 8 activities concerned by the B to B and B to All- discussion: Telecommunications Postal and courier services Scheduled air transport (passengers) Sea and coastal water transport (passengers) Legal activities Tax consultancy an important activity outside the STS regulation is Transport via railways (passengers) B to B/B to A approach

9. Federal Statistical Office of Germany FSO Germany - Peter Roemer - Division Prices - UNECE/ILO Meeting on Consumer Price Indices Geneva, 8 - 9 May 2008 Slide 9 The European programme for the development of SPPI In 2003 Eurostat started a statistical development programme for SPPI First EU results shall be published by mid 2008

10. Federal Statistical Office of Germany FSO Germany - Peter Roemer - Division Prices - UNECE/ILO Meeting on Consumer Price Indices Geneva, 8 - 9 May 2008 Slide 10 The organisation of price statistics in Germany SPPI and specific parts of the CPI are both collected centrally at Destatis CPI and SPPI compiled/developed within the same unit and by the same persons (unit VA5) for the activities : telecommunication postal and courier services transport services legal activities tax consultancy

11. Federal Statistical Office of Germany FSO Germany - Peter Roemer - Division Prices - UNECE/ILO Meeting on Consumer Price Indices Geneva, 8 - 9 May 2008 Slide 11 The German work in CPI and SPPI Advantages of the organization The persons have + a good expertise of the markets + good contacts to companies concerned and + the confidence of partners within these companies Positive interactions for CPI and SPPI data collection: + dual use of information Disadvantages of the organization - separate calculation procedures for CPI and SPPI - additional workload for rebasing the CPI during the SPPI development

12. Federal Statistical Office of Germany FSO Germany - Peter Roemer - Division Prices - UNECE/ILO Meeting on Consumer Price Indices Geneva, 8 - 9 May 2008 Slide 12 Methodological work for SPPI in Germany started in 2003 First pilot studies on telecommunications (TC) and legal services, accounting, auditing, tax consultancy TC: only few companies volunteered in the pilot study At that time the STS-regulation concerning SPPI was not yet adopted and pilot surveys were on a voluntary base lack of legal obligation burden for companies sensitiveness of data reasons insufficient information to develop the SPPI for TC

13. Federal Statistical Office of Germany FSO Germany - Peter Roemer - Division Prices - UNECE/ILO Meeting on Consumer Price Indices Geneva, 8 - 9 May 2008 Slide 13 SPPS and CPI for TC as an example to compile price indices for TC is a very demanding task rapid changes in technology and the permanent introduction of new services are permanent challenges in TC. Particular challenges are quality adjustments for new services, bundling of services, changes in the condition of services.  a good timing for the introduction of new services and the dropout for old services is very important

14. Federal Statistical Office of Germany FSO Germany - Peter Roemer - Division Prices - UNECE/ILO Meeting on Consumer Price Indices Geneva, 8 - 9 May 2008 Slide 14 Calculation of the German CPI for TC data prices for certain services in fixed line telephony, mobile phone services and internet from a commercial data base information from TC companies quantity 2000 price quotations from 30 companies period per month base year 2005=100 weighting structure Laspeyres type construction (modified for rapid services changes)

15. Federal Statistical Office of Germany FSO Germany - Peter Roemer - Division Prices - UNECE/ILO Meeting on Consumer Price Indices Geneva, 8 - 9 May 2008 Slide 15 Development of the German SPPI for TC In 2006 coordinated work started to revise the CPI and to develop the SPPI Collision of rebasing works for various CPI and developement works for SPPI in 2007; priority on CPI work in two stages:  obtaining the weighting data for CPI and SPPI  developing the current surveys for SPPI the existence of a legal obligation to reply to surveys for CPI and SPPI made the work much easier than in 2003/2004

16. Federal Statistical Office of Germany FSO Germany - Peter Roemer - Division Prices - UNECE/ILO Meeting on Consumer Price Indices Geneva, 8 - 9 May 2008 Slide 16 In Germany the regulation authority is not allowed to pass individual statistical data to Destatis Destatis got technical advice from the regulator Regulators questionnaires were used as a basis for statistical questionnaires Statistical questionnaires contained weighting information required for CPI as well as for SPPI For the SPPI a unit value approach was chosen B to B information from the SPPI can be combined with B to C information of the CPI Development of the German SPPI for TC

17. Federal Statistical Office of Germany FSO Germany - Peter Roemer - Division Prices - UNECE/ILO Meeting on Consumer Price Indices Geneva, 8 - 9 May 2008 Slide 17 Conclusion + Expertise of qualified staff in the market for TC (or another activity) was a good starting point for SPPI work - Collision of work for rebasing the CPI and developing the SPPI was a major disadvantage for an integrated procedure in CPI and SPPI + Information obtained from the SPPI (for TC) can also be an input for CPI work: e.g. unit value information from SPPI as a basis for re-weighting the CPI

18. Federal Statistical Office of Germany FSO Germany - Peter Roemer - Division Prices - UNECE/ILO Meeting on Consumer Price Indices Geneva, 8 - 9 May 2008 Attentio n Thanks for your Please contact: Roemer Peter, FSO Germany Telefone: 00 49 611 72-4000 E-Mail: peter.roemer@destatis.depeter.roemer@destatis.de