Nominal unit labour cost (tipslm)

Reference Metadata in Euro SDMX Metadata Structure (ESMS)

Compiling agency: Eurostat, the statistical office of the European Union


Eurostat metadata
Reference metadata
1. Contact
2. Metadata update
3. Statistical presentation
4. Unit of measure
5. Reference Period
6. Institutional Mandate
7. Confidentiality
8. Release policy
9. Frequency of dissemination
10. Accessibility and clarity
11. Quality management
12. Relevance
13. Accuracy
14. Timeliness and punctuality
15. Coherence and comparability
16. Cost and Burden
17. Data revision
18. Statistical processing
19. Comment
Related Metadata
Annexes (including footnotes)



For any question on data and metadata, please contact: EUROPEAN STATISTICAL DATA SUPPORT

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1. Contact Top
1.1. Contact organisation

Eurostat, the statistical office of the European Union

1.2. Contact organisation unit

Eurostat, C1, National accounts methodology. Indicators

1.5. Contact mail address

Office address:
Joseph Bech building
5, Rue Alphonse Weicker
2721 Luxembourg

Functional mail box: ESTAT-MIP@ec.europa.eu


2. Metadata update Top
2.1. Metadata last certified 20/11/2018
2.2. Metadata last posted 20/11/2018
2.3. Metadata last update 20/11/2018


3. Statistical presentation Top
3.1. Data description

Unit labour cost (ULC) measures the average cost of labour per unit of output. It is calculated as the ratio of labour costs to labour productivity. ULC represents a link between productivity and the cost of labour in producing output.

Input data are obtained through official transmissions of national accounts' country data in the European system of accounts - ESA 2010 - transmission programme.

Nominal ULC (NULC) is calculated as: [ D1 / EEM] / [ B1GM / ETO], where:
     D1 = Compensation of employees, all industries, in current prices
     EEM = Employees, all industries, in persons (following the domestic concept)
     B1GM = Gross domestic product at market prices in millions, chain-linked volumes reference year 2010
     ETO = Total employment, all industries, in persons (following the domestic concept).

The MIP scoreboard indicator is the Nominal unit labour cost - 3 year % change.

In the MIP domain, are also published annual figures on:

  • NULC - 1, 3, 5 and 10 year % change and index 2010=100
  • Real labour productivity - 1, 3, 5 and 10 year % change and index 2010=100
  • ULC performance related to the Euro area – 1 and 10 year % change

and quarterly data:

  • NULC – 1 year % change and index 2010=100
  • Real labour productivity – 1 year % change and index 2010=100
3.2. Classification system

The classification system follows the European System of Accounts 2010 edition (ESA2010).
For the calculation of the NULC, employees and employed persons are counted according to the domestic concept used in national accounts. The same applies to the auxiliary indicators for employment.
The ESA 2010 distinguishes two employment concepts depending on geographical coverage: resident persons in employment (i.e. national scope of employment) and employment in resident production units irrespective of the place of residence of the employed person (i.e. domestic scope).

3.3. Coverage - sector

Annual national accounts refer to the whole economy. For further information on institutional sectors and sub-sectors, see European System of Accounts 2010 edition (ESA2010).

3.4. Statistical concepts and definitions

The MIP scoreboard indicator is the percentage change over three years of nominal unit labour cost (NULC). The indicative threshold is 9% for the euro area countries and 12% for the non-euro area countries. The scoreboard indicator is calculated using the formula: [ (ULCt – ULCt-3) / ULCt-3 ] * 100.

The annual national accounts domain encompasses the main aggregates on national accounts. Its main variables are: GDP and its components, employment, final consumption aggregates, gross capital formation aggregates, income, exports and imports. These variables are calculated on an annual basis but the majority of them is available on a quarterly basis as well as certain breakdowns.
The key concepts captured by National accounts and related to the calculation of the NULC cover the definition of the Gross domestic product (GDP) and employment. More detailed explanations on methodology can be found in Annex A of Regulation (EU) No 549/2013.

 

Gross domestic product (GDP) at market prices, is the final result of the production activity of resident producer units. GDP is defined in three ways:

a. GDP Output (production) approach
From the production point of view, GDP can be measured as the sum of the following components:
GDP = Total Gross Value Added (B.1G) + Taxes (D.21) - Subsidies on products (D.31),   
          where Gross Value Added (GVA) = Output (P.1) - Intermediate consumption (P.2)

b. GDP Expenditure approach
GDP = Household and non-profit institutions serving households final expenditure (P.3 in S.14_S.15)
          + Government final consumption expenditure (P.3 in S.13)
          + Gross Fixed Capital Formation (P.51)
          + Changes in inventories (P.52)
          + (Acquisition - disposal of valuables) (P.53) 
          + Exports (P.6) - Imports (P.7).

c. GDP Income approach 
GDP = Compensation of employees (D.1)
          + Gross operating surplus and mixed income (B.2g + B.3g)
          + Taxes les subsidies on production and imports (D.2 + D.3) 

 

The employment variables are widely used in the national accounts context. Employment covers all persons engaged in some productive activity (within the production boundary of National accounts). Employed persons are either employees (working by agreement for another resident unit and receiving remuneration) or self-employed (owners of unincorporated enterprises).

Employment and its components are important economic indicators in their own right. They serve in the construction of derived indicators, turning monetary aggregates from absolute into relative indicators, thus allowing for the comparison of economies of very different size.

More detailed explanations on methodology are provided in the Internet dedicated section on the European System of Accounts (ESA 2010) and in the Annex A of Regulation (EU) No 549/2013.

3.5. Statistical unit

National accounts aim to capture economic activity within the domestic territory. They combine data from a host of base statistics, and thus they have no common sampling reference frame. The elementary building blocks of ESA 2010 statistics are statistical units and their groupings. ESA 2010, defines two types of units, institutional units and local kind-of-activity units.

3.6. Statistical population

National accounts combine data from many source statistics. The concept of statistical population is not applicable in a national accounts context.

3.7. Reference area

The scoreboard presents national data for each EU28 Member State.

3.8. Coverage - Time

According to the legislation, EU countries should transmit data from 1995 onwards. However, the lengths of series vary according to country and its derogations. Information on derogations for each country is published in the Commission implementing decision of 26 June 2014 on granting derogations to Member States with respect to the transmission of statistics pursuant to Regulation (EU) No 549/2013 concerning the European system of national and regional accounts in the EU.

Details on time coverage under the links:
tipslm10 Nominal unit labour cost - 3 year % change;
tipslm20 Nominal unit labour cost - annual data, % changes and index (2010 = 100);
tipslm40 Nominal unit labour cost (NULC) - quarterly data;
tipslm50 Unit labour cost performance related to the Euro area - annual data;
tipsna70 Real labour productivity per person employed - annual data;
tipsna71 Real labour productivity per person employed - quarterly data. 

3.9. Base period

Not applicable


4. Unit of measure Top

Data are expressed as 1, 3, 5 and 10 year % change and index 2010=100.


5. Reference Period Top

The reference period is the calendar year.


6. Institutional Mandate Top
6.1. Institutional Mandate - legal acts and other agreements

National Accounts are compiled in accordance with the European System of Accounts (ESA2010) implemented as from September 2014: from that date onwards all data transmission from Member States to Eurostat follow ESA2010 rules. Compilation rules are further explained in the following document: European system of accounts - ESA2010 - Transmission programme of data (multilingual).

The indicator Nominal unit labour cost forms part of the Macroeconomic Imbalance Procedure (MIP) Scoreboard indicators set up under Regulation (EU) No 1176/2011 of the European Parliament and of the Council.

6.2. Institutional Mandate - data sharing

Data received via the transmission programme are shared with other institutions in accordance with specific agreements, notably with the ECB and OECD. A Protocol for co-operation between Eurostat and the OECD in the area of National Accounts signed in June 2013 specifies agreed data exchange and data validation arrangements. Further data sharing between international organisations is currently tested.


7. Confidentiality Top
7.1. Confidentiality - policy

Regulation 2015/759 of 29 April 2015, amending Regulation (EC) No 223/2009 on European statistics of 11 March 2009 [recital 24 and Article 20(4)], stipulates the need to establish common principles and guidelines ensuring the confidentiality of data used for the production of European statistics and the access to those data with due account for technical developments and the requirements of users in a democratic society.

7.2. Confidentiality - data treatment

Not available


8. Release policy Top
8.1. Release calendar

Data are released on Eurostat Reference Database as soon as received from national authorities. The rules for basic data transmission are defined in:

Annual accounts data also covered by quarterly accounts are usually updated on the occasion of new quarterly releases (which are released according to a pre-announced calendar). Figures for a new year usually become available with the first release of quarterly accounts for the fourth quarter of the reference year. The main GDP aggregates annual data are disseminated: T+2 months and T+9 months.

8.2. Release calendar access

A release calendar for MIP scoreboard indicators is not available. The release calendar for European quarterly national accounts data are published in accordance with the Eurostat release calendar.

8.3. Release policy - user access

The MIP Regulation stipulates that “the Commission shall make the set of indicators and the thresholds in the scoreboard public” (Art. 4, para. 6, Regulation (EU) No 1176/2011 of 16 November 2011 on the prevention and correction of macroeconomic imbalances) and that “the Commission shall update the values for the indicators on the scoreboard at least on an annual basis” (Art. 4, para. 8).

In line with the Community legal framework and the European Statistics Code of Practice Eurostat disseminates European statistics on Eurostat's website (see §10 'Accessibility and clarity') respecting professional independence and in an objective, professional and transparent manner in which all users are treated equitably. Detailed arrangements are governed by the Eurostat protocol on impartial access to Eurostat data for users.


9. Frequency of dissemination Top

Annual


10. Accessibility and clarity Top
10.1. Dissemination format - News release

News releases on-line

10.2. Dissemination format - Publications

The indicators are part of the MIP Scoreboard used to identify emerging or persistent macroeconomic imbalances in the EU-28 countries. The Scoreboard is part of an annual exercise, where the first step is the compilation of an Alert Mechanism Report (AMR).

10.3. Dissemination format - online database

See data availability for the different tables: tipslm10; tipslm20; tipslm40; tipslm50; tipsna70; tipsna71

10.4. Dissemination format - microdata access

Not available

10.5. Dissemination format - other

Not available

10.6. Documentation on methodology

European legislation and guidelines are explained in European System of Accounts 2010 edition (ESA 2010) - for details see §6.1.

10.7. Quality management - documentation

Eurostat's mission is to provide the European Union with a high-quality statistical information service – see: Eurostat quality framework.

Moreover, the statistics underlying the Scoreboard indicators are subject to a specific quality assurance framework developed within the MIP context.


11. Quality management Top
11.1. Quality assurance

Quality is assured by strict application of European System of Accounts 2010 edition (ESA2010) concepts and by thorough validation of the data delivered by countries. Additional checks are performed on MIP indicators.

11.2. Quality management - assessment

Data are collected from reliable sources applying high standards with regard to methodology and ensuring high comparability. Eurostat conducts an annual compliance exercise for all the Member States.

Member States are to provide the Commission with a report on the quality of the transmitted data on national and regional accounts. The modalities, structure, periodicity and assessment indicators of the quality reports on data transmitted have been specified in a Commission Implementing Regulation 2016/2304 of 19 December 2016. These reports will be implemented in a staged approach in 2017, 2019 and 2021. Eurostat plans to publish annual summaries on the quality of ESA data transmissions and report to the European Parliament and the Council on a 5 year basis.

The quality assurance framework for the Macroeconomic imbalance procedure (MIP) follows a three-level structure [link]:

The first level assesses the reliability and comparability of MIP underlying statistics and addresses relevant quality issues; it also enhances the communication on quality assurance of MIP statistics towards the European Parliament and Council, policy makers and the public at large. This level draws on the information gathered in levels two and three (see below).

The second level consists of domain-specific quality reports produced by Eurostat and the ECB summarising the main findings for the euro area or the EU Member States. Reports assess the underlying compilation process and its robustness, describe its legal basis and evaluate whether the statistics are in line with international statistical standards.

The third level consists of national quality reports (self-assessments) produced by the institution compiling the national statistics. Most of these reports are voluntarily published by Members States on the CMFB’s website and their availability depends upon the statistical domain.


12. Relevance Top
12.1. Relevance - User Needs

The indicator Nominal unit labour cost is one of the headline indicators of the MIP Scoreboard. The MIP Scoreboard is used as an early warning system in the context of the macroeconomic surveillance of the EU Member states. The MIP Scoreboard consists of a set of fourteen indicators, covering the major sources of macroeconomic imbalances. The aim of the scoreboard is to trigger in-depth studies, which will analyse whether potential imbalances identified in the early-warning system are benign or problematic.

12.2. Relevance - User Satisfaction

Not available

12.3. Completeness

According to the legislation, EU countries should transmit data from 1995 onwards. However, the lengths of series vary according to country and its derogations. Information on derogations for each country could be found in the Commission implementing decision of 26 June 2014 on granting derogations to Member States with respect to the transmission of statistics pursuant to Regulation (EU) No 549/2013 concerning the European system of national and regional accounts in the EU.

The Introduction of the Statistical annex of each Alert mechanism report provides detailed information on data completeness.


13. Accuracy Top
13.1. Accuracy - overall

The indicators are associated with a high level of overall accuracy. Data transmitted by each Member State are checked in Eurostat for their consistency and plausibility. If any problem is detected, Eurostat asks the relevant Member State to check the figures or to confirm the changes. Quality reports on national accounts, including revision analyses are published by some Member States.

13.2. Sampling error

Not available

13.3. Non-sampling error

Not available


14. Timeliness and punctuality Top
14.1. Timeliness

Member States are required to transmit their data to Eurostat in compliance with the European System of Accounts ESA 2010 transmission programme, subject to derogations. Annual ULC data have to be transmitted at T+70 days in March and T+9 months.

14.2. Punctuality

Punctuality depends on the delivery of basic data used for the calculation of the MIP indicators. Member states' data are revised according to national schedules, and revisions are applied to Eurostat’s online database as soon as they become available to Eurostat.


15. Coherence and comparability Top
15.1. Comparability - geographical

Comparability is assured by the application of common definitions: see European System of Accounts ESA 2010.

15.2. Comparability - over time

By using a common framework, the European System of Accounts 2010 edition (ESA 2010), data are comparable over time. Information on data, breaks in series, flags are provided in the footnotes, published under each data table.

15.3. Coherence - cross domain

Unit labour cost forms part of an integrated set of national accounts. Therefore, consistency checks are possible with the component data and with other national accounts tables submitted to Eurostat.

15.4. Coherence - internal

In between Eurostat releases, Member States may revise their figures - typically with each quarterly figures (until T+70 days).


16. Cost and Burden Top

Not available


17. Data revision Top
17.1. Data revision - policy

National data are revised according to national schedules, and revisions are applied to Eurostat's online database as soon as they become available to Eurostat.

17.2. Data revision - practice

National accounts data are subject to continuous routine revisions as new input data become available. This will typically also entail revisions of the MIP domain indicators, which are derived from these data, but updated data are only released on specific dates (as announced in the Release calendar). Annual data might be revised twice every quarter with the release of quarterly figures.
In addition, exceptional revisions will result from major changes in methodology. These major changes will be implemented with legislation, and therefore announced in the Official Journal of the European Union and other publications.


18. Statistical processing Top
18.1. Source data

Data published in the MIP domain are national accounts data for EU Member States, where all data are produced by statistical offices of the respective countries then transmitted to Eurostat.
Countries use many sources to compile their national accounts, among them administrative data from government, population censuses, business surveys and household surveys. No single survey can hence be referred to. Sources vary from country to country and may cover a large set of economic, social, financial and environmental items, which need not always be strictly related to national accounts. In any case, there is no single survey source for national accounts.
In particular, different sources are used for calculating the different approaches of GDP mentioned above under §3.4 'Statistical concepts and definitions'. If more than one of these approaches is used, their results are usually balanced, i.e. forced to be coherent, so that a single value for GDP is obtained.
For further information about sources and collection methods in National Statistical Institutes (NSIs), please refer to National Statistical Institutes and National Central Banks.

18.2. Frequency of data collection

Member States should transmit national accounts data to Eurostat upon national publication and/or in line with the deadlines specified in the European System of Accounts (ESA 2010) transmission programme. Member State's annual main aggregates are generally transmitted at t+2 and t+9 months. Data are collected from national sources. As the breadth of the sources varies, so does the frequency of collection, from monthly to annually, and in the case of population censuses they are mostly collected every decade.

18.3. Data collection

Once data are compiled by national authorities in the reporting format (following the ESA 2010 transmission programme requirements) they are transmitted to Eurostat. Data in ESA 2010 are transmitted via SDMX, which introduced standardised codes.
National Accounts combine data from many source statistics. Techniques of data collection vary widely, depending on the compilation approach, the source statistics available, the particular account in the system of accounts, the timeliness of data release and other factors.

18.4. Data validation

Source data undergo a sequence of checks within NSIs. Eurostat checks national data mainly for completeness (coverage of reference periods and variables) and consistency (accounting consistency, time-consistency between quarterly and annual accounts and consistency over time) and follows up with NSIs on any lack of quality in this respect. Validation against data from other domains and validation of statistical tools used are done on an ad-hoc basis.

18.5. Data compilation

The rules on data compilation are established according to ESA 2010.

18.6. Adjustment

To avoid data discrepancies when calculating European annual accounts, Eurostat use some variables to adjust for any possible lack of additivity between the total and the sum of its components, i.e. these variables are effectively used as balancing items. NSIs may provide explicit balancing adjustments for their national accounts. These are recorded as "discrepancy items" in the appropriate tables.


19. Comment Top

Not applicable


Related metadata Top
nama10_esms - Annual national accounts
namq_10_esms - Quarterly national accounts


Annexes Top