Producer price indices for services

Service Producer Price Indices give relative measures on changes in prices over time for services produced by establishments registered in Norway.

Prices refer to observed prices received by producers. Taxes and dues are excluded, while received subsidies are included.

Price changes are calculated first by comparing the observed price a given quarter to the prices in the base period.

The indices refer to index reference period, in which the index value equals 100. The indices therefor express price change compared to this reference period.

The elementary level refers to the lowest level in the hierarchy of computing indices, the level below the lowest level in which weights are used. Elementary level indices are calculated based on the price observations for a given group of services, and higher-level indices are calculated by weighing together elementary level indices.

The Standard Industrial Classification used in Statistics Norway (SIC2007), is based on the EU standard NACE Rev. 2.1.

Name: Producer price indices for services
Topic: Prices and price indices

Division for Price Statistics

Only national level.

Frequency: Quarterly

Timeliness: Published within 57 days after the end of the reference period.

EUROSTAT

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The purpose of the producer price indices for services is to measure the price development for:

1. Legal activities (2005-)

2. Cleaning activities (2004-)

3. Accounting and auditing activities (2007-) (backcasted to 2006)

4. Business and management consultancy activities (2007-) (backcasted to 2006)

5. Architectural services (1998-)

6. Employment activities (2008-) (backcasted to 2006)

7. Civil engineering activities (2008-) (backcasted to 2006)

8. Advertising activities (2008-) (backcasted to 2006)

9. Technical testing and analysis (2009-)

10. Sea and coastal water transport (2006-)

11. Passenger air transport (2006-)

12. Freight transport by road (4th Quarter 2004-)

13. Storage (2006-)

14. Postal and courier activities (2006-)

15. Cargo handling (2006-)

16. IT services (2006-)

17. Telecommunication services (published first time in November 2007, with figures starting from 1st quarter 2006). The index for telecommunication services was updated from 1st quarter 2014. An index covering services to private households is published monthly as part of the Consumer Price Index (CPI).

18. The price index for Sea and coastal water transport was published in the period 1st quarter 2006 - 4th quarter 2012.

All indices developed later than 2006, apart from technical testing and analysis, has been estimated back to 2006, see chapter 3.6. For services without available historical data on prices, the Wage Index was used as an indicator on historical price development.

The Service Producer Price Index is produced according to the EU regulation on short-term statistics.

The Service Producer Price Indices show the price development in various service industries. It is primarily used as a deflator in the National Accounts of Statistics Norway. In addition, it can be used as an indicator in the formulation of monetary policy. Eurostat uses the statistics to compare price developments between European countries.

With regard to the use of statistics for contract adjustment, it is important to emphasize that Statistics Norway is not responsible for either the users' decision to adjust contracts or the choice of index. Statistics Norway, on the other hand, can provide information on available indices and details on these.

It is important to emphasize that the statistics measure price development for services in the various industries and it says nothing about the cost development in these industries. Various cost indices should be considered instead, or the consumer price index for adjusting wages and rents.

No external users can access the statistics before they are published and accessible simultaneously for all users on ssb.no at 8 am. and following a minimum of three months' advance notice given in the Statistics Release Calendar. This is one of Statistics Norway's key principles for ensuring that all users are treated equally

Statistics Norway also produces the Producer Price Index (PPI) which measures the price development of goods and services produced by Norwegian producers in SIC2007 section B-E.

Producer price indices for services should also be considered together with quarterly turnover statistics and annual structural statistics for the same services.

The producer price indices for services are also used in National Accounts.

Passenger air transport: An index describing price development on passenger air transport is also published as part of the CPI. When comparing the two price indices, careful consideration should be given to the following points:

• Different purpose: While the CPI measures the price development for products sold to consumers, the SPPI measures the price development on services sold by producers, which together with sales volumes give the producers turnover. The concepts differ in the sense that producers of services usually collect fees or taxes for a third party (e.g. VAT, airport taxes, etc).

• Differing price definitions: While the SPPI consists of listed prices and actual volumes, the CPI replicates a typical behaviour of consumers purchasing such services, hence, prices are observed on a given trip by airplane which is kept fixed between two periods.

Freight transport by road: Statistics Norway also publishes a monthly cost index for road goods transport.

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For business activities, the population are all establishments in Norway with the SIC2007 (NACE rev 2.1) codes:

Section H, Transportation and storage:

• Freight transport by road: All establishments within class 49.41
• Passenger air transport: All enterprises within group 51.1.
• Storage: All enterprises within group 52.1
• Cargo handling: All establishments within class 52.24.
• Postal and courier activities: All enterprises within division 50.

Section J, Information and communication:

• Telecommunication services: Active enterprises within division 61, telecommunications.
• IT services: Active enterprises in Norway within division 62, computer programming, consultancy and related activities.

Section M, Professional, Scientific and technical activities:

• Legal activities: All establishments in Norway within group 69.1.
• Accounting and auditing activities: All establishments in Norway within subclasses 69.201 and 69.202.
• Business and management consultancy activities: All establishments in Norway within subclass 70.220.
• Architectural services: All establishments in Norway within subclasses 71.111, 71.112 and 71.113.
• Civil engineering activities: All enterprises in Norway within subclass 71.121.
• Technical testing and analysis: All enterprises in Norway within group 71.2.
• Advertising activities: All establishments in Norway within class 73.11, advertising agencies.

Section N, Administrative and support service activities:

• Rental and leasing activities: All establishments in Norway within subclass 77.110, renting and leasing of cars and light motor vehicles.
• Employment activities: All enterprises in Norway within class 78.20, temporary employment agency activities.
• Cleaning activities: All establishments in Norway within class 81.21, general cleaning of buildings.

Section H, Transportation and storage:

The calculation is based on quarterly data from a survey and registers, and structural turnover data.

The Central Register of Establishments and Enterprises (CRE) is the main source for sampling. In addition, data from the vehicle registry from the Norwegian Public Roads Administration (NPRA) is used together with data from the CRE to establish samples for class 49.41.

The samples of most of the prices indices in this section is based on the principle of PPS.

In some cases, a lower threshold is set based on either turnover or number of employees to delineate the population. The sample is also rotated to ensure a fair distribution of the response burden for industries with a considerable population size.

Section J, Information and communication:

Producer price index for IT services:

The sample is established based on data from the CRE. Sampled enterprises report prices data and number of IT consultants, including the distribution of type of positions and competence. The sample size is about 60 enterprises and it is established based on the principle of Probability Proportional to Size (PPS).

Producer price index for telecommunication services:

The sample is established based on turnover data from Norwegian Communications Authority. Sampled enterprises report data for 4 types of services: ISDN/PSTN, IP, Mobile, Broadband.

Section M, Professional, Scientific and technical activities:

The sample is established based on data from the CRE. Prices are collected from enterprises via specific surveys. Turnover data is collected based on the specific surveys and/or structural statistics conducted by Statistics Norway.

Business and management consultancy activities:

A sample of about 160 establishments is selected from a total population of 6 825 establishments, and covers about 33.5 per cent of the total turnover in the industry.

Accounting activities:

A sample of about 90 establishments is selected from a total population of 4 250 establishments, and covers about 10 per cent of the total turnover in the industry.

Auditing activities:

A sample of about 90 establishments is selected from a total population of 1 100 establishments, and covers about 50 per cent of the total turnover in the industry.

Legal activities:

A sample of about 90 establishments is selected from a total population of 2 290 establishments, and covers about 25 per cent of the total turnover in the industry.

Architectural services:

The sample consists of all establishments in the population, with 10 or more employees. The sample size is 95 establishments from a total population of 2500, and covers about 50 per cent of the total turnover in the industry.

Civil engineering activities:

A sample of about 200 enterprises is selected from a population of 3 000 enterprises, and covers about 50 per cent of the total turnover in the industry.

Advertising activities:

A sample of about 120 establishments is selected from a population of 2 500 establishments, and covers above 40 per cent of the total turnover in the industry.

Technical testing and analysis:

The sample consists of all enterprises in the population, with 10 or more employees. The sample size is 80 enterprises from a population of 600 enterprises, and covers about 90 per cent of the total turnover in the industry.

Section N, Administrative and support service activities:

Employment activities:

The sample consists of the Confederation of Norwegian Enterprise (NHO) Services members. We have about 75 enterprises, which covers about 70 per cent of the total turnover.

Car rental:

The sample consists of 4 chains, which covers about 350 establishments, and covers most of the total turnover.

Cleaning activities:
A sample of about 90 establishments is selected from a total population of 2 500 establishments, and covers about 40 per cent of the total turnover in the industry.

The data collection is conducted using a quarterly questionnaire. Employment activity data is collected and delivered to Statistics Norway by the Confederation of Norwegian Enterprise (NHO).

Manual and automatic controls of data are performed.

In situations where data does not seem plausible respondents are contacted.

Indices are calculated using a chain-linked Young formula, which is a version of the Laspeyres formula. A Laspeyres formula is characterized by constant weights for a given period. The frequency of updating the weights for the different SPPIs vary. Weights are usually updated less frequent than once per year.

On the lowest level in the hierarchy of index calculations, a geometrical average of prices relative to the prices in the base period are calculated.

The index reference period is 2010=100.

The following price definitions are applied:

• Road freight transport: Prices are measured as invoiced prices on long-term contracts by type of goods, for example frozen and chilled goods, oil products, piece- or container goods and dry goods.
• Passenger air transport: Average price of tickets per price category is calculated based on turnover, number of sold tickets and price category. Based on the various price categories indices are calculated for business trips (B2B), leisure trips (B2C) and total index (B2A). The distinction between B2B and B2C reflects the different options related to ticket flexibility for various tickets. Flexible tickets are considered B2B whereas non-flexible tickets are considered B2C.
• Storage: Prices are measured as invoiced price on representative storage services, such as bulk, frozen or chilled goods, dry goods, containers or hazardous goods.
• Cargo handling: Prices are measured as invoiced prices on contracts related to various types of cargo handling, including wet bulk, dry bulk, container Lolo, container Roro, self-propelled Lolo and Roro and piece goods.
• Postal and courier activities: Prices are measured as invoiced prices on representative postal and courier activities.
• IT services: Prices are measured as average invoiced hourly price for IT consultants with different profiles. The different profiles are: IT architecture, system developers, IT project management, IT consulting and IT infrastructure. In addition, the IT consultants are classified according to four different competence levels within each profile based on education and professional experience.
• Telecommunication services: Unit prices are calculated based on turnover and volumes for the following services: Landline, mobile telephony, mobile and fixed internet broadband.
• Business and management consultancy activities: Prices measured are average hourly rates. Respondents are asked to report invoiced rates if available or alternatively report list prices, excl. VAT.
• Accounting and auditing activities: Price measured are average rates hourly rates. Respondents are asked to report invoiced rates if available or alternatively report list prices, excl. VAT.
• Architectural services: Prices measured are average hourly rates, excl. VAT.
• Legal activities: Prices are measured as average invoiced hourly rates, excl. VAT. Respondents are asked to report invoiced rates if available or alternatively list prices.
• Civil engineering activities: Invoiced hourly rates are calculated based on reported report turnover (excl. VAT) and number of hours worked, for different fields of activity.
• Advertising activities: In this industry prices are measured according to two distinct price definitions. For advertising agencies prices are measured according to average invoiced hourly rates, excl. VAT. For enterprises involved in advertising dissemination average invoiced prices are collected on repeated services.
• Technical testing and analysis: Average invoiced prices are measured on repeated services within six business services: certification of systems, certification of products/personnel, testing and analysis, inspections and controls, measuring and validation services and classification.
• Car rental: Prices are measured include any possible additions regarding extra rental periods/driving distance, insurance, airport fee or other additions. VAT, fuel expenditures and possible one-way fees are not included.
• Employment activities: Invoiced hourly rates are calculated based on invoiced turnover and number of hours worked for different fields of activity.
• Cleaning activities: Price are measured according to invoiced prices, excl. VAT, on long-term contracts within traditional cleaning services.

Not relevant.

Collected and disseminated data are treated according to provisions in the Statistics Act and principles of confidentiality, which ensures that sensitive information on individual enterprises is not identifiable.

The use of collected data from respondents are in accordance with provisions in the Statistics Act.

Norway Post (Norwegian postal Service) agreed that Statistics Norway is the responsible to publish a national index for postal services.

Starting with 1st quarter 2012 all indices were published on the website of Statistics Norway with 2010=100 as the index reference period. Earlier publications were published with 2006=100 as the index reference period. However, changing the index reference period only represents a change in the level of the index and does not have any impact on the rates of change.

In 1st quarter 2015, the index for passenger air transport was recalculated and revised for the period back to 1st quarter 2006. The revision was based on weights reflecting better the distribution of the turnover of the respondent in this industry. This revision had highest impact on the price development for the period 2013-2014.

Measurement errors could be caused by respondents possibly misinterpreting and thus not correctly answering the questionnaires. Processing errors are possible errors introduced during treatment and processing of data in Statistics Norway. Web-based reporting is designed to reduce such type of errors. At same time production processes include controls of both detailed and aggregated data.

Respondents are contacted in situations where the controls disclose possible errors in the reported data.

All sample-based surveys are associated with some non-response, either because of respondents not returning the questionnaires or because the questionnaire is inadequately completed. The response rate is normally above 95 per cent.

Sampling bias may occur in situations where some services or enterprises are poorly represented compared to actual situation in the market.

In order to reduce sampling bias, the largest enterprises are always included in the sample. In addition, the samples are stratified to ensure a representative sample. Furthermore, samples are renewed on a regular basis in order to minimize possible sample bias given that the population size is sufficiently large.

Sampling errors and sample variance are not calculated.

Not relevant.