Progress in development of producer price indices for the service industries in Europe

Abstract

This paper presents an inventory study of progress made in developing producer price indices for services in Europe. The report makes a brief historical look at the situation from 1999 and the impact of the requirements of the systems of national accounts is discussed. The report will also describe both the guiding/determining instruments (such as existing manuals, handbooks, international regulations in the field, country-specific development reports) and the official and unofficial institutions that promote and make possible cooperation and information exchange. There are several reasons why some European countries have more developed producer price index (PPI) for services than others. The country-by-country inventory of the present situation in Europe summarises the results of the questionnaire sent to 23 European countries in February/March this year. It is presented in the Annex to this paper.

The findings clearly demonstrate that different countries in Europe are at different stages in the development of PPIs for services. The current development process can be shortened and made more effective with the help of international exchange of information and international cooperation within both the official institutions for cooperation and the unofficial networks. The development process in countries with relatively little experience must, however, be allowed to develop at their own pace because the conditions may vary.

In conclusion, this report outlines some general wishes and recommendations:

- increase of national financial resources in the field;

- higher status for PPI for services in the price index family;

- increased cooperation between experts in the field of price statistics and those in the field of national accounts.

Efforts to increase awareness of the value of PPI for services as deflators for production values in the SNA (System for National Accounts) are necessary so that their value is recognised among the government financial officers.

Developments in Sweden, which can be of interest for other countries, are presented in the concluding section of this report. (This part is written by Petra Jansson and Maria Martinsson, statisticians, Service Price Index, Price Statistics unit, Statistics Sweden.)