Terminology for the
Index of Service
Production
STESEG Task Force on Services
Bernard Lefrançois (presenter)
June 28, 2004
Statistics
Canada
Statistique
Canada
Background
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Compilation Manual for ISP
Common terminology required
Previous meetings
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STESEG 2003
Task Force meeting February 2004
E-mail discussions
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Sources
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Generally accepted definitions
Sources
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SNA 1993/ESA 1995
Eurostat Concepts and Definitions Database
(CODED)
OECD Glossary of Statistical Terms
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Services – sources
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SNA 1993: 6.8, 6.9
Eurostat: based on SNA 1993
OECD: based on SNA 1993
Recommendation: OECD version.
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Services – recommendation
Services are outputs produced to order and which
cannot be traded separately from their production.
Services are not separate entities over which
ownership rights can be established. They cannot
be traded separately from their production. Services
are heterogeneous outputs produced to order and
typically consist of changes in the conditions of the
consuming units realized by the activities of
producers at the demand of the consumers. By the
time their production is completed they must have
been provided to the consumers.
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Service sector – sources
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There are important variations
NACE 1.1
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Sections G to K and M to O
Exclusions:
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L: Public administration and defence; compulsory
social security
P: Activities of households
Q: Extra-territorial organizations and bodies
ISIC 3.1
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Sections G to Q
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Service sector –
recommendation
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ISIC 3.1 – Sections G to Q
 G Wholesale and retail trade; repair of mot. veh., motorcycles
and personal and household goods
 H Hotels and restaurants
 I Transport, storage and communications
 J Financial intermediation
 K Real estate, renting and business activities
 L Public administration and defence; compulsory social security
 M Education
 N Health and social work
 O Other community, social and personal services
 P Activities of households
 Q Extra-territorial organizations and bodies
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Service sector – notes
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ISP to measure domestic activity
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Establishments in Section Q are not domestic by
convention (SNA 1993)
Section Q will be excluded
ISP Manual will use ISIC Rev. 4
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Still require discussion and near final version
 e.g. Should Service Sector includes some classes of
Section E: Water supply; sewerage, waste management
and remediation activities?
ISIC Rev. 4 Draft structure of May 12, 2004
 http://unstats.un.org/unsd/cr/registry/isic-4.asp
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Service sector – ISIC Rev. 4
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ISIC Rev. 4 Draft sections
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G:
H:
J:
K:
L:
M:
N:
O:
P:
Q:
R:
S:
T:
U:
Trade
Transportation and storage
Accommodation and food service activities
Information and communication
Financial and insurance activities
Real estate, rental and leasing activities
Professional, scientific and technical activities
Administrative and support service activities
Education
Health and social work
Arts, entertainment and recreation
Other service activities
Public administration and defence; compulsory social security
Activities of households as employers; undifferentiated goods- and servicesproducing activities of households for own use
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Service sector – notes (cont’d)
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Sector defined in terms of industry classes
Includes all activities of each class, whether
they are goods- or service-producing
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Market/Non-market activities
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Definitions as per SNA 1993/ESA 1995
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Main difference is that ESA 1995 definitions are
more operational
Economically significant prices
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Prices are said to be economically significant
when they have a significant influence on the
amounts the producers are willing to supply and
on the amounts the purchasers wish to buy
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Market/Non-market producers
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SNA 1993 (4.58, 6.52)
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Market producers are producers that sell most or all of their
output at prices that are economically significant
ESA 1995 (3.19, 3.24, 3.27-3.40)
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Market producers are producers that sell their output at
economically significant prices. Non-market producers are
producers that provide most of their output to others free or
at prices that are not economically significant. (…) by
convention all the output of unincorporated enterprises
owned by households sold to other institutional units is (…)
to be regarded as market output. For other institutional
units, output is only sold at economically significant prices
when more than 50% of the production costs is covered by
sales.
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Market/Non-market ISP
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ISP to include market and non-market
activities
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Bulk of non-market activities in Sections L, M, N
(ISIC 3.1)
ISP to be presented with
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Breakdown by ISIC sections
Market and non-market sub-indexes if feasible
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Index of service production
(ISP) – recommendation
An Index of Service Production (ISP) measures
changes over time in the gross value added
in real terms of the Service sector. More
precisely, it is defined as the ratio of the
volume of output produced by the service
industries in a given time period to that
produced in a specified base period. (…)
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Output (Gross output) –
SNA 1993 6.38
Output consists of those goods or services that
are produced within an establishment that
become available for use outside that
establishment, plus any goods and services
produced for own final use.
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Output – context
Such output may be:
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sold;
entered into the producer's inventories prior to sale, barter, etc.
supplied to other establishments belonging to the same
enterprise for use as intermediate inputs
retained by their owners for own final consumption or own gross
fixed capital formation
supplied free, or sold at prices that are not economically
significant to other institutional units
provided to their employees as compensation in kind or used for
other payments in kind
bartered in exchange for other goods, services or assets
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Receipts/Sales/Turnover...
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No universal definition of “turnover”
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Receipts/Sales/Turnover may be used
interchangeably by the same organisation
Some valuation boundaries:
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e.g. not used in Canada and United States
Own products vs consignments
Taxes
Subsidies
Rebates, discounts, returns
Work-in-progress payments
Task Force has set aside this issue for now
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Questions to STESEG –
chap. B of Manual
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Any strong preference on statistical units?
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If not, the following combination will be recommended
either
 establishment and/or enterprise
or
 Kind of Activity Unit (KAU) and/or enterprise
Would comparability across member states be reduced?
Should ISIC be the primary industrial classification
used?
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If yes, should it be Rev. 3.1 or Rev. 4?
If Rev. 4, should ISP Manual be prepared after 2007?
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Questions to STESEG –
chap. C of Manual
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Coverage of ISP
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Market ISP: monthly
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Non-market ISP: monthly, quarterly or no need?
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How to distinguish market and non-market services?
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Should there be a guideline or be left to be determined by member
states?
In many cases, there is more than one definition for concepts
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Should only one definition be kept? If so:
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Should all the definitions be taken from a single source (e.g.
EU/SNA/UN)?
OR
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Should a definition be created from a mixture of several sources?
Differences between receipts/sales/turnover
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Theoretical clarification needed?
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If yes, how?
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