Services turnover index overview

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Data extracted in May 2018.

Planned article update: September 2019.

Highlights


EU-28 and EA-19, turnover in services (STS), quarterly data, seasonally and calendar adjusted (2015=100), Source: Eurostat (sts_setu_q)

This article provides an overview of the development of the services turnover indicator in the European Union (EU), the euro area and the European Member states over recent years and describes how it is calculated. The index of turnover in (other) services is a business cycle indicator which measures the development of turnover in the European service industries with the exception of financial services and services in retail and wholesale trade for which a separate indicator exists (hence "other" services; in this article the "other" will be omitted for easier readability).


Full article

Services turnover: development since 2005

Unlike the two other turnover indicators in short-term statistics for industry and for retail trade the services turnover indicators has only a mandatory reference period of a quarter. However, a number of countries transmit monthly data to Eurostat on a voluntary basis. On the basis of these voluntary data monthly several EU-28 and EA-19 aggregates are produced by Eurostat (see below) in addition to the mandatory quarterly data.

The data presented in this article are taken from European short-term statistics (STS). The data on services collected under the short-term statistics regulation encompass mainly – but not only (see below) – services consumed by businesses, therefore they are often referred to as "business services".

Between 2000 and 2008 the turnover of European service industries (as covered by the STS regulation, see below) expanded on a relatively steady growth path. A rapid decline set in during the last quarter of 2008 and within half a year the service turnover index for the EU-28 declined by several percentage points. In the second half of 2009 a recovery set in. Between 2011 and 2014 the level of service turnover in the euro area increased only moderately. Since 2014 however the growth of the indicator was rather dynamic.

Figure 1: EU-28 and EA-19, turnover in services (STS), quarterly data, seasonally and calendar adjusted (2015=100), Source: Eurostat (sts_setu_q)

Short-term statistics cover – with some exceptions – the following five service industries according to NACE Rev. 2 (NACE code in brackets): transportation and storage (H), accommodation and food services (I), information and communication services (J), professional, scientific and technical activities (M) and administrative and support services (N). The development of the turnover for these main service activities is represented in Figure 2. Transport and storage, professional, scientific and technical as well as administrative and support services show a rather similar development. They are also the biggest of the five service industries in terms of value added and therefore largely influence the development of turnover for total services. Accommodation and food services and likewise information and communication services show a somewhat steadier turnover development.

Figure 2: EU-28, Turnover in main service industries, quarterly data, seasonally and calendar adjusted, (2015=100), Source: Eurostat (sts_setu_q)

Table 1 provides a breakdown of the development (annual rates of change) of the service turnover in the Member States of the EU. In 2009 all EU Member States experienced a decline in services; in many countries the negative rates of change even reached double-digit level. In Spain service turnover already began to decline in 2008.

Table 1 also indicates very different dynamics in the turnover development between Member States. On average the service turnover in the EU-28 increased by well over 50 % between 2005 and 2017. An example of a country with a relatively low turnover growth is Spain; in Greece and Portugal the total service turnover even declined. Member States with an exceptionally fast growth were Bulgaria, Poland, Romania, Slovakia, and the Baltic countries.

Table 1: Annual rates of change for the turnover in services (%), 2005 - 2017, calendar adjusted data, Source: Eurostat (sts_setu_a)

Figure 3 shows the development of EU-28 service turnover according to the level of knowledge-intensity of the underlying service industries between 2005 and 2015 (this breakdown is not available for more recent data). While all these service industries show a generally comparable development pattern it is apparent that for knowledge intensive services the development is much more dynamic.

Figure 3: EU-28, Turnover according to knowledge intensity of industry, quarterly data, seasonally and calendar adjusted, (2010=100), Source: Eurostat (sts_setu_q)

Monthly service turnover data

According to Council Regulation (EC) No 1165/98 of 19 May 1998 (the STS Regulation) data on service turnover have to be made available by the National Statistical Institutes at least on a quarterly basis. However, around half of the Member States collect these data (at least for some service industries) on a monthly basis. Not in all cases can these dates be published by Eurostat (e.g. for reasons of confidentiality).

Figure 4 shows the development of the total service turnover indicator (as defined by STS) for the countries for which monthly date are available and not confidential. In order to better show the different developments of the national series the data are displayed with the base year 2010. Data are however also available in the Eurostat database with the new base year 2015.

Figure 4: Total service turnover in selected countries, monthly data, seasonally adjusted, (2010=100), Source: Eurostat (sts_setu_m)

Depending on the specific service industry the available monthly country data cover between just under 50% and 70% of the EU-28. On the basis of these data Eurostat now publishes estimates of aggregated EU-28 and even for EA-19 indices (for a more detailed description the the article on the STS index compilation)

Despite the fact that the monthly EU-28 aggregates are not based on a full coverage of European countries the estimates give a good first indication of the development of the EU-28 service turnover. To demonstrate this Figure 5 compares the quarter on quarter growth rates calculated on the basis of the complete European data and the quarter on quarter growth rates based on the monthly data series (which, for this purpose, were first aggregated to quarterly data) on the basis of around half the European countries.

Figure 5: Total service turnover in the EU-28 (quarterly) and in selected countries (aggregated monthly data), seasonally adjusted, (2010=100), Source: Eurostat (sts_setu_m) and (sts_setu_q)

All results for the indicator of turnover in services are published on the Eurostat website.

Data sources

Data sources, aggregation and availability

The definition of turnover is rather straightforward. It comprises basically what is invoiced by the seller. Rebates and price deductions are taken into account as well as special charges that the customer might have to pay. Turnover does not include VAT or similar deductible taxes.

Information on service turnover is most often collected by business surveys. However, quite a number of National Statistical Institutes rely on administrative sources, i.e. VAT declarations, to obtain the data. There are also cases where both methods are used; for example bigger enterprises might be asked to contribute to a survey whereas the data for smaller enterprises area collected from VAT registers.

European aggregates are calculated by summing up weighted national indices for individual service activities. The weights correspond to the share of the countries in the turnover of service activities in the base year.

Context

The turnover index for services is one of the Principal European economic indicators (PEEIs). It is one of the relatively few available indicators for services and is used to analyse business cycle trends in the service industry and as input for national accounts statistics.

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Trade and services (t_sts_ts)
Services (t_sts_ser)
Turnover in services (teiis 700)

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Trade and services (sts_ts)
Services (sts_os)
Turnover in services (sts_os_t)

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