24/2012 Produced by: Hungarian Central Statistical Office www.ksh.hu Issue 6 of Volume 24 24 July 2012 Services producer prices, 1st quarter 2012 Contents 1 Introduction 3 Section H Transportation and storage 4 Section J Information and communication 5 Section M Professional, scientific and technical activities 6 Section N Administrative and support service activities Introduction The range of economic indicators published in the area of short-term statistics was extended in from 2011 with the gap-filling services producer price indices (SPPI) classified among the principal economic indicators of the European Union (PEEI) 1, concerning four sections. SPPI indices express the average price development of services provided in services divisions. Their production is required by the EU s Council Regulation on short-term statistics (STS Regulation) for determined services activities (see Appendix). Although the price indices calculated in national currencies should reflect both domestic and non-domestic price developments, the separate publication of SPPI indices by sales destinations has not been compulsory so far. The 14 new SPPI indices were first published in in two stages: in 2010 concerning the first and in 2011 the second group of services. The complete, already five-year time series together were presented in an analysis publication on the internet in July 2012 (http://www.ksh.hu/docs/hun/xftp/ idoszaki/pdf/szolgkiboar11.pdf). In at the level of the national economy the four sections concerned by price statistical observations accounted altogether 2 for 20 of gross value added and 16 of net sales in 2009, while services included in the STS Regulation covered 12 and 10 respectively. The presented price indices aggregate share of total GDP and net sales figures at basic prices of the four sections concerned by observations is around 60. In accordance with the STS Regulation the producer price indices of services provided to business partners (business to business B-B) have been published so far. as several other factors. In the 1st quarter of 2012 the price of diesel oil grew by 5.8, minimum wages as a consequence of the increase of HUF 15,000 on 1 January by 19 and the general measure of inflation by 3.3, while the exchange rate of the HUF against the EUR decreased, even if to a low extent (2.2) compared to the 4th quarter of 2011. Their aggregate effect influenced the pricing of the different services groups to differing degrees. The re-pricing of long-term contracts between companies in line with the inflation also occurs in the first quarter of the year in most of the divisions. The price change of the observed groups of services compared to the 4th quarter of 2011 varies in a band which is 2 percentage-points wide in the majority of divisions, except for the average price development of postal and courier activities (9.6), telecommunications services (-4.5) and advertising (-2.2). Figure 1 Quarterly services producer prices indices 1st quarter 2012 H53 H5210 N80 H5224 N78 N812 H501_502 H494 M71 M69_702 J62 J63 M73 J61 101,1,2 101,6 99,3 95,5 109,6 94 96 98 106 108 110 112 Notes: see the denomination of divisions in the Appendix. There are relatively large disparities in the 1st quarter of 2012 too among the price indices of the services groups laid down in the Regulation. The changes are first of all owing to the impacts of the market environment differing by activities and the different characteristics of services. The development of SPPI indices is influenced by the change of diesel oil prices, euro exchange rates, minimum wages and consumer prices, as well Compared to the corresponding quarter of the previous year the growth rate of the prices of freight transport by road was the most significant (8.2) in the 1st quarter of 2012, which exceeded by 4 percentage points that of postal and courier activities (4.2). The price change of telecommunications services was very different from that of the remaining areas. 1 Principal European Economic Indicators PEEI. 2 According to the STS Regulation the four sections concerned in the NACE Rev.2 classification are: H Transportation and storage, J Information and communication, M Professional, scientific and technical activities, N Administrative and support service activities.
2 Services producer prices, 1st quarter 2012 Statistical reflections 24/2012 Quarterly services producer prices indices 1st quarter 2012 (same quarter of previous year=)) Figure 2 Figure 3 Quarterly aggregate services producer price index required by STS Regulation, in EU countries, 1st quarter 2012 H494 H501_502 H5224 H5210 H53 N78 N80 M69_702 J62 M71 N812 J63 M73 J61,8,6,2 108,2 107,5 106,9 Eurostat (the Statistical Office of the European Union) publishes price index aggregates for the EU and the euro area only in case of an appropriate 3 coverage. In the period of preparation of this publication 4, price indices with such coverage were available in the database of Eurostat only for security and investigation activities (EU-15) and employment activities (EU-27). The basic goal of the continuous development of services price statistics is that the different countries should observe the prices of as many new areas as possible, allowing for the calculation of a services producer price index aggregate with an increasing coverage (of at lest the most important divisions), and at last a general services producer price index aggregate for both the EU and the particular member countries. To this end, Eurostat has made pilot calculations from spring 2012 and in parallel started to disclose from July the preliminary and estimated SPPI index aggregated at the level of the services groups required by the STS Regulation. The new indicator, tested so far, was accessible in case of 16 countries (including ) in the period of compilation of the publication. In in the aggregate services price index the relatively high price rise in the field of transportation and storage as well as postal and courier activities was offset by the decrease of the observed services prices of telecommunications services primarily as well as advertising and market research. Compared to the previous quarter it can be stated based on the SPPI indicator aggregated for the services groups required by the STS Regulation in quarter 1 of 2012 that the rate of increase of prices exceeded 1 in five countries, and to the highest extent in (1.5). The estimated value of the price index for (99.8) is identical with the value of the s and s indicator, indicating a 0.2 price decrease. The highest (2.8) decrease of prices was registered in. 97,2 82,9 80 85 90 95 105 110 115 Notes: see the denomination of divisions in the Appendix Untied Kingdom 99,7 97,2 97 98 99 101 103 In the majority of countries the average rise of prices in quarter 1 of 2012 was at most 2 the highest in compared to the same period of the previous year based on the SPPI indicator aggregated for the services groups defined in the STS Regulation. Prices decreased in four member states including (by 0.4), even though at a modest rate to the highest extent, by 1.1 in. Figure 4 Quarterly aggregate services producer price index required by STS Regulation, in EU countries, 1st quarter 2012 (same quarter of previous year=) 99,3 98,9 101,4 101,4 101,8 101,6 98 99 101 103 3 No less than 60 share of sales of member countries where the price index is available, relevant to the particular services area. 4 The data were queried from the Eurostat database until 12 July 2012. The database is continuously updated and changed.
Statistical reflections 24/2012 Services producer prices, 1st quarter 2012 3 Section H Transportation and storage Out of the areas under transportation and storage 5 HCSO publishes the price indices of four selected groups of services freight transport by road (4941), warehousing and storage (5210), cargo handling (5224) and postal and courier activities (53) at present. The largest share is represented by the performances of freight transport by road within the section, with about 29 of both gross value added and net sales in 2009 as well as a more than 50 share in the number of active enterprises. The fields of warehousing and postal and courier activities are more concentrated, a much smaller number of enterprises is paralleled by higher values of performance indicators. The share of enterprises engaged in warehousing does not reach 2, while it represents more than 9 of gross value added. The share of the number of enterprises performing postal and courier activities is 4, while their share of gross value added exceeds 11. Within the section cargo handling services have the lowest share though the number of active enterprises is similar to that of companies providing warehousing services, the shares of their performance indicators are lower than 1. Out of all services under the section of transportation and storage the divisions the prices of which are observed cover around 51 of gross value added and 43 of net sales altogether. Among these, freight transport by road is the largest for both performance indicators, accounting for nearly one-third of the section. The price indices of transportation and storage services are influenced by diesel oil prices and the euro exchange rate as well as several other factors. In the reference period the price of diesel oil increased by 5.8, while the euro exchange rate of the forint slightly decreased (2.2) compared to the 4th quarter of 2011. Annual increases compared to the 1st quarter of 2011 were 21 and 8.9 respectively. The aggregate effect of these was different on the price development of the different services groups. Compared to the previous quarter the price increase of postal and courier activities was the most marked (9.6) in quarter 1 of 2012 out of the observed areas, 3.8 percentage points higher than the rise of diesel oil prices (5.8). These are followed by the approximately 1.5 price rises of warehousing and cargo handling services, and then the 0.4 price increase of freight transport by road. The inflation is only surpassed by the price rise of postal and courier services (by 6.3 percentage points), while the price index of the remaining areas was 2 3 percentage points lower than that. Figure 5 Price indices of section H, consumer price index, and changes of diesel oil prices and euro exchange rate, 1st quarter 2012 115 110 105 95 Freight transport by road 105,8 103,3 101,6 Warehousing and storage price indices change of euro exchange rate Cargo handling 109,6 Postal and courier activities change of diesel oil prices consumer price index Compared to the same period of the previous year the most substantial price change over a year occurred in case of freight transport by road (8.2), while the prices of postal and courier activities grew at the lowest rate (4.2). In harmony with the already five-year trend the prices of freight transport by road gradually rise within the year, while the price development of postal and courier services varies seasonally the increase of prices in line with the inflation is typically recorded in the first quarter of the year. In the 1st quarter of 2012 producer prices were up in all the four areas compared to the corresponding period of the previous year. Figure 6 Price indices of transportation and storage activities, 1st quarter 2010 2012 (same period of previous year=) 110 108 106 98 96 94 96,3 101,9 108,2 107,5 98,9,6 Compared to the previous period s price indices for transportation and storage are in the middle of the rankings of EU member countries in quarter 1 of 2012. An especially high price change was only measured in postal and courier activities: based on the available data the domestic price rise was 6.5 percentage points higher than the second highest value, recorded for (3.1). The price indices of freight transport by road and warehousing were the lowest in case of Greece, while the prices of cargo handling increased at the highest rate (by 4.9) exactly in Greece. Figure 7 Price indices of cargo handling in the European Union, 1st quarter 2012 106,9,6,2 2010 2011 2012 2010 2011 2012 2010 2011 2012 2010 2011 2012 Freight transport by road Greece Latvia Warehousing and storage 94,3 98,3 98,0 Cargo handling,9 103,1,3,1 Postal and courier activities 92 96 108 5 The following divisions fall under section H in NACE Rev.2: 49 land transport and transport via pipelines, 50 water transport, 51 air transport, 52 warehousing and support activities for transportation, 53 postal and courier activities.
4 Services producer prices, 1st quarter 2012 Statistical reflections 24/2012 Compared to the same period of the previous year the price change of transportation and storage services in is especially high compared with other EU member countries. The increase of producer prices in freight transport by road and cargo handling in was 8.2 and 7.0 respectively. The price rise of postal and courier activities was higher in and only (9.2 and 7.3 respectively) than in (4.2). In case of warehousing services the highest values of indices were registered for (8.0) and (5.6), followed by the increase of prices in (4.6). Figure 8 Price indices of freight transport by road in the European Union, 1st quarter 2012 (same period of the previous year=) Latvia Greece 97,6 96,0 108,2 106,0 105,4,3 103,6 103,5 103,4,8,6,6,5,1 101,6 92 96 108 112 Section J Information and communication Within the section of information and communication, comprising six services divisions 6, HCSO produces and publishes SPPIs for three groups of services: telecommunications, computer programming, consultancy and related activities, as well as information service activities. The number of operating enterprises exceeded 33 thousand in the section of information and communication, more than the half of which nearly 18 thousand operated in computer programming, consultancy and related activities according to year 2009 data. The share of enterprises operating in the division of information service activities was nearly one third of that (17). Telecommunications are concentrated: some large enterprises have the dominant role. The share of the number of enterprises operating here is 3. 41.3 of the gross value added by the section was represented by telecommunications, while the contribution of computer programming, consultancy and related activities was 25.6, and that of information service activities less than 6. The largest share of net sales over 37 was also accounted for by telecommunications companies, the share of computer programming, consultancy and related activities was more than 27, while that of information service activities hardly exceeded 11. Compared to the previous quarter services producer prices decreased in all the three observed divisions in quarter 1 of 2012, the value of the price indices remained much below the value of the consumer price index. The prices of computer programming, consultancy and related activities and information service activities were cut by 0.2 and 0.7 on average respectively. In contrast, the prices of telecommunications activities were reduced at an even higher rate, by 4.5 compared to the 4th quarter of 2011. Figure 9 Quarterly price indices of observed services in section J and consumer price index in, 1st quarter 2012 98 96 94 95,5 Compared to the corresponding period of the previous year the prices of telecommunications services dropped considerably too, at a rate exceeding 17, the value of the price index in the 1st quarter of 2012 (82.9) was the lowest in the last three years. The decrease of producer prices of information service activities was 0.4, while computer programming, consultancy and related activities cost 1 more on average than in quarter 1 of 2011. Figure 10 Quarterly price indices of observed services in section J compared to euro exchange rate, 1st quarter 2010 2012 (same period of previous year=) 115 110 105 95 90 85 80 99,5 98,6 91,3 90,4 1st quarter 2010 The prices of information technology services were influenced by several factors such as hardening competition, the attempts of business partners to reduce prices because of the economic crisis, and the lack of newer projects. The impact of fluctuations in foreign currency exchange rates on price indices was substantial here as well. The prices of telecommunications services are to a certain extent regulated by authorities, and are cost-based, as required by regulations. The transaction fees depend on the composition of packages as well as individual deals made with clients. 99,3 103,3 Telecommunications Computer programming, consultancy and related activities Information service activities Consumer price index 99,5 92,1 1st quarter 2011 Telecommunications Computer programming, consultancy and related activities Information service activities Euro exchange rate 108,9 82,9 1st quarter 2012 6 The six divisions falling under section J in NACE Rev.2: 58 publishing activities, 59 motion picture, video and television programme production, sound recording and music publishing activities, 60 programming and broadcasting activities, 61 telecommunications, 62 computer programming, consultancy and related activities, 63 information service activities.
Statistical reflections 24/2012 Services producer prices, 1st quarter 2012 5 Compared to the previous quarter the decreasing trend of domestic telecommunications producer prices was similar to that of member states in the 1st quarter of 2012, but the fall of prices was the highest in (4.5). The highest price rise (1.7) was recorded in. Figure 11 Price indices of telecommunications activities in some EU countries, 1st quarter 2012 Italy 95,5 98,1 97,7 97,6 In quarter 1 of 2012 the producer prices of computer programming, consultancy and related activities increased moderately, by at most 2 compared to the previous quarter according the majority of available data. Prices rose at the highest rates in (2.0) and (1.8). Prices decreased in no less than six countries including (0.2) compared to the 4th quarter of 2011. The largest falls were registered in (4.4) and (2.8). Figure 12 Price indices of computer programming, consultancy and related activities in the European Union, 1st quarter 2012 99,1 99,0,3,2 90 95 105 110 97,2 95,6 99,7 99,7,3,3,1,1 101,8 94 96 98 In the observed countries the trend of change of telecommunications prices compared to the same period of the previous year was similar to that of indices based on the previous quarter. The highest price decrease (17.1) was measured in, while the highest rate of price rise was observed in (3.3). Section M Professional, scientific and technical activities Within section M HCSO produces and publishes services producer price indices for three areas: legal and accounting activities and management consultancy activities 7 as well as architectural and engineering activities and technical testing and analysis activities 8, and the services group of advertising and market research 9. The three areas involved in price observation cover some 80 of the basic-price GDP of and nearly 90 of the net sales within this section. Considering GDP at basic prices, net sales and the number of active enterprises, the largest weight is represented by the group of legal and accounting activities and management consultancy activities among the observed areas, followed by the share of architectural and engineering activities, and then that of the services group of advertising and market research. Compared to the previous quarter the producer prices of legal and accounting activities and management consultancy activities practically stagnated (-0.1) in the 1st quarter of 2012, which was the aggregate impact of several factors. The re-pricing of services typically occurs at the beginning of the year though in the course of this, service providers did not manage to enforce substantial price increases. On the other hand, the modest price rise was offset by the conversion of fees typically given in EUR into HUF according to the quarterly mean exchange rate of the National Bank of, because of the more than 2 strengthening of the exchange rate. In the period of observation the producer prices of architectural and engineering activities and technical testing and analysis grew by 0.2 compared to the previous quarter. This slight price change indicates the lack of price increase stemming from the re-pricing of contracts, usual at the beginning of the year. With the 2.2 decrease of prices in the area of advertising and market research compared to the previous quarter the declining trend observed in the first quarter of former years continued, which refers to the still perceivable negative effect of the financial and economic crisis on the division. Figure 13 Price indices of observed areas in section M compared to consumer price index and euro exchange rate, 1st quarter 2012 98 96,2 103,3 Legal and accounting activities; management consultancy activities Architectural and engineering activities; technical testing and analysis Advertising and market research Consumer price index Euro exchange rate (quarterly average) 7 NACE Rev.2: 69_702 legal and accounting activities; management consultancy activities, 6910 legal activities, 6920 accounting, bookkeeping and auditing activities; tax consultancy, 702 management consultancy activities 8 NACE Rev.2: 71 architectural and engineering activities; technical testing and analysis, 7111 architectural activities, 7112 engineering activities and related technical consultancy, 7120 technical testing and analysis
6 Services producer prices, 1st quarter 2012 Statistical reflections 24/2012 Compared to the corresponding period of the previous year prices decreased continuously in case of the services group of advertising and market research in quarter 1 of 2012, similarly to the 1st quarter of the past two years. In the other two observed areas of the section (the services group of legal and accounting activities and management consultancy activities, furthermore, the division of architectural and engineering activities and technical testing and analysis) both the increase and decrease of prices were recorded when examining the data of the corresponding periods: in the 1st quarter of 2012 the rate of increase was 0.9 and 1.5 respectively in case of the two groups of services compared to the first quarter of the previous year. Prices changed in different directions only in the 1st quarter of 2010 in these two areas: prices in the services group of legal and accounting activities and management consultancy activities fell by 0.4, while the services prices of architectural and engineering activities and technical testing and analysis were up by 1.5 compared to quarter 1 of 2009. Figure 14 Price indices of observed areas in section M, 1st quarter 2010 2012 (same period of previous year=) 98 96 98,1 97,4 97,2 1st quarter 2010 1st quarter 2011 1st quarter 2012 Legal and accounting activities; management consultancy activities Architectural and engineering activities; technical testing and analysis Advertising and market research Figure 15 Price indices of legal and accounting activities as well as management consultancy activities in the European Union, 1st quarter 2012 Estonia 98,1 98,6 98,4 98,9,1 101,1 97 98 99 101 103 When comparing the time series of EU countries to the previous quarter it can be stated that the price indices of legal and accounting activities and management consultancy activities along with relatively moderate increases and decreases changed nowhere to a higher extent than 2. An increase reaching or exceeding 1 was measured in four countries only (, Estonia,, ), and a decrease exceeding 1 was also registered in four countries (,, the, ) compared to the 4th quarter of 2011. Compared to the same period of the previous year reached the highest price increase of nearly 10 in the division of advertising and market research, while a price decrease of more than 5 was observed in. A slight price change within a band of 1 was recorded in several countries (, and ) over a year, while prices remained unchanged in compared to the corresponding quarter of the previous year. Figure 16 Price indices of advertising and market research in the European Union, 1 st quarter 2012 (same period of previous year=) Greece 94,6 94,4 97,5 97,2 96,9,2 105,3,3 109,9 90 95 105 110 115 Section N Administrative and support service activities The law on the production of services producer price indices requires the compilation of price indices for three areas among the administrative and support service activities under section N: employment activities 10, security and investigation activities 11 and cleaning activities 12. Considering all of the services groups under the section the total of divisions involved in the price observation cover 44 of gross value added and more than one third of net sales. Regarding the distribution by gross value added within the section the share of employment activities is 16, that of security and investigation activities is 18 and that of cleaning activities is 10. In the shares within net sales there are larger differences between the share of security and investigation activities (18) and the share of the other two areas (9 each), half that each. Compared to the previous quarter the producer price indices of the three observed services groups follow a similar trend in quarter 1 of 2012. The staggered movement of prices, which with the indexation of contracts at the beginning of the year refers to the attempts of companies to keep pace with inflation, is common in them. The rate of price change was 10 NACE Rev.2: 78 employment activities, 7810 activities of employment placement agencies, 7820 temporary employment agency activities, 7830 other human resources provision. 11 NACE Rev.2: 80 security and investigation activities, 8010 private security activities, 8020 security systems service activities, 8030 investigation activities. 12 NACE Rev.2: 812 cleaning activities, 8121 general cleaning of buildings, 8122 other building and industrial cleaning activities, 8129 other cleaning activities.
Statistical reflections 24/2012 Services producer prices, 1st quarter 2012 7 markedly influenced by the development of minimum wages too, however, the pace of increase of services producer prices was significantly lower than the trend reflecting the development of the consumer price index and minimum wages compared to the 4th quarter of 2011. Figure 17 Price indices of observed areas in section N compared to consumer price index and minimum wages, 1st quarter 2012 125 120 115 110 105 95 90 101,1 Employment activities 119,2 103,3 Security and investigation activities Cleaning activities Services price indices Consumer price index Minimum wages When comparing the three above-mentioned areas the prices of security and investigation activities increased the most (1.3) and those of cleaning activities the least (0.9). The 1.1 price rise of employment activities may be consistent with the wage compensation and wage increase because of the abolishment of tax refund made at the beginning of the year, and with the change of minimum wages. Compared to the corresponding period of the previous year the rate of increase of the prices of security and investigation activities diminished continuously when examining the first quarter of the past three years. The prices of employment activities rose at about the same rate in the 1st quarter of 2010 and 2012 (3 and 2.2 respectively) as those of the above-mentioned group of services, but rose to a lower extent (0.4) in quarter 1 of 2011. The prices of cleaning activities increased at a more modest rate compared to the other two groups of services in the 1st quarter of the last three years, except for 2011, when the rate of price change of the former (1.0) was somewhat higher than that of employment activities. Figure 18 Price indices of observed areas in section N, 1st quarter 2010 2012 (same period of previous year=) 103 101 103,0,8,5,8 1st quarter 2010 1st quarter 2011 1st quarter 2012 To gain an international outlook on security and investigation activities 19 countries data were available from the database of Eurostat in the period of compilation of the publication. Compared to the previous quarter the Hungarian value of the price index of security and investigation activities (101.3) differs only by 0.4 percentage point from the average of the old member states of the Community (EU-15). Prices increased the most dynamically in (6.5), and out of the larger countries that of also rose by 1.6. The development of Spanish prices is identical with the EU-15 average, while n, n and Polish prices increased at almost the same rate (0.7, 0.6 and 0.6 respectively). Prices hardly changed in (0.1), were unchanged in the, and decreased in Croatia and the compared to quarter 4 of 2011. Figure 19 Price indices of security and investigation activities in some European countries, 1st quarter 2012 European Union (EU-15) Greece Latvia Croatia,1 99,7 99,5 99,4 98,4,9,7 101,6 106,5 96 98 106 108 Compared to the same period of the previous year the two most extreme price changes were recorded in (6.3) and the (-8.5) out of the 19 member states supplying data on employment activities. The Hungarian figure is 1.2 percentage points higher than the EU-27 average (1.0). Prices were up by almost 3 in and, while in at a comparable rate (2.1) to s. The values of the n and Spanish indicators (both 0.9) are closest to the EU-27 average, while prices stagnated in the compared to the corresponding period of the previous year. Employment activities Security and investigation activities Cleaning activities
8 Services producer prices, 1st quarter 2012 Statistical reflections 24/2012 Figure 20 Price indices of employment activities in some European countries, 1st quarter 2012 (same period of previous year=) European Union (EU-27) Norway 91,5 96,2 101 106,3 103,9 103,4 103,0,9,8,6,1,1 101,8 Appendix Services activities observed in NACE Rev.2 49.4 Freight transport by road and removal services 50.1 + 50.2 Sea and coastal passenger and freight water transport 51 Air transport 52.1 Warehousing and storage 52.24 Cargo handling 53.1 Postal activities under universal service obligation 53.2 Other postal and courier activities 61 Telecommunications 62 Computer programming, consultancy and related activities 63 Information service activities 69_702 Legal and accounting activities; management consultancy activities 71 Architectural and engineering activities; technical testing and analysis 73 Advertising and market research 78 Employment activities 80 Security and investigation activities 81.2 Cleaning activities 90 95 105 110 Further information, data (links) see in the annual publication http://www.ksh.hu/docs/hun/xftp/idoszaki/pdf/ szolgkiboar11.pdf Contact details: Ildiko.Holocsy@ksh.hu Telephone: (+36-1) 345-6646 reka.szabokis@ksh.hu Telephone:(+36-1) 345-6649 Information services Telephone: (+36-1) 345-6789 www.ksh.hu HUNGARIAN CENTRAL STATISTICAL OFFICE, 2012 All rights concerning the layout, graphics and design work of this publication are reserved for HCSO. Any kind of reproduction of them has to be approved by HCSO. Any secondary publication is allowed only by the indication of source.