User Guide to the Economi Tendency Survey
Contents
1. Repair of computers and personal and household goods Other personal activities 23 52 53 55 1 56 exkl 56 3 55 1 56 1 2 58 59 60 61 62 63 64 66 64 65 66 68 2 exkl 68 204 68 3 69 70 71 71 1 71 11 71 12 71 2 73 74 77 78 78 1 78 2 3 79 80 81 82 95 96 95 96 Appendix 2 Coverage in the Business Tendency Survey Construction 5 9 S 10 19 2 387 54 2 31 936 714 2 20 49 1581 151 10 45 998 4 546 10 50 99 294 133 45 19 469 8 976 46 100 199 89 89 100 11 673 11 673 100 gt 199 59 59 100 65 500 65 500 100 Total 4 410 486 11 174 576 91 409 52 Manufacturing 5 9 gt gt 10 19 z x 20 49 2112 484 23 65 088 15 221 23 50 99 770 266 35 53 309 18 192 34 100 199 429 429 100 59 462 59 462 100 2199 415 415 100 295 095 295 095 100 Total 3726 1 594 43 472 954 387 970 82 Trade Nace Rev 45 47 exkl retail sale in non durable goods Nace Rev 47 11 47 2 5 9 3 484 156 4 22 411 1 036 10 19 3 078 108 4 40 552 1 360 20 49 1 876 169 9 55 616 4 852 50 99 525 271 52 36 088 18 735 52 100 199 211 211 100 28 537 28 537 100 gt 199 203 203 100 133 746 133 746 100 Total 9377 1118 12 316 950 188 266 59 Private service sectors Nace Rev 49 96 exkl Nace Rev 55 56 and 68 21 5 9 gt gt 10 19 67 67 100 897 897 100 20 49 3 379 710 21 100 697 21 186 21 50 99 1 072 372 35 73 401 25 871 35 100 199 507 507 100 70 253 70 253 100 gt 199 446 446 100 432 1072. tors were revised There was also a separate questionnaire for the wholesale trade SNI 46 up until the third quarter of 2005 which was then integrated with the questionnaire for the retail trade as part of the overhaul This overhaul of the questionnaires was performed partly to increase harmonisation within the EU and partly to simplify the questions and make it easier to complete the ques tionnaires Enlarged monthly sample In May 2010 the monthly sample was enlarged by just over 50 per cent from around 4 000 firms to just over 6 000 The change was made to obtain better coverage at industry level and have the same sample size for the monthly and quarterly surveys Before May 2010 the sample for the quarterly surveys was substantially larger than that for the monthly surveys 6 3 2 CONSUMER TENDENCY SURVEY This survey was originally conducted by Statistics Sweden but was taken over by GfK Sverige AB in 2002 The results for 1993 2001 have been adjusted by the NIER to increase comparability with the results for 2002 onwards Since October 2009 the survey has been conducted by CMA Research AB From October to December 2009 CMA and GfK carried out parallel surveys The time series reported from October 2009 onwards are CMA s figures while the net balances for December 2001 to September 2009 are the result of GfK s surveys Results for the questions on the Swedish economy personal finances and unemployment in the next year are avai
3. 1071 1072 1074 1075 1076 1077 201 202 203 204 Trade Selling volume in the last 3 months Present sales situation Goods purchases in the last 3 months Goods in stock at present Number of employees in the last 3 months Shortage of labour at present Selling prices in the last 3 months Current profitability Selling volume within the next 3 months Goods purchases within the next 3 months Number of employees within the next 3 months Selling prices within the next 3 months Sales situation within the next 6 months Private service sector Development of the firms business situation the last 3 months Demand for the firms services in the last 3 months Volume of assignments on hand orders at present Selling prices in the last 3 months Current profitability Number of employees in the last 3 months Shortage of labour at present If demand increases is it possible to increase production with present resources If yes how much increased good increased too large increased yes increased good increase increase increase increase get better improved increased relatively large increased good increased yes yes ee percent Main factor currently limiting the firms activity one alternative none insufficient demand shortage of labour shortage of space and or equipment financial restrictions other factors Demand for the firms services within the next 3 months Selling prices w
4. 46 2 46 3 46 4 46 5 46 6 46 7 47 11447 2 47 19447 3 7 exkl 47 73 47 9 47 19 47 3 47 4 47 5 47 6 47 7 47 9 49 96 49 exkl 49 5 49 4 49 1 3 50 51 Warehousing and support activities for transportation Postal and courier activities Hotels and restaurants Hotels Restaurants Publishers Motion picture video and television programme production sound recording and music publishing activities Programming and broadcasting activities Telecommunications Computer programming and consultancy companies etc Information service activities Financial institutions and insurancecompanies Companies for renting and operating own or leased real estate Real estate activities on a fee or contact basis Legal and accounting firms Management consultancy companies Architectural and engineering activities technical testing and analysis Technical consultancy companies and architects s Architects s Technical consultancy companies Technical testing and analysis Advertising and market research companies Other professional scientific and technical activities Renting companies Employment placement agencies temporary employment agencies etc Activities of employment placement agencies Provision of personell activities Travel agencies and tour operatiors Security and investigation activities Services to buildings and landscape activities Office administrative and office support companies Other service companies
5. 432 107 100 Total 5 471 2 102 38 677 355 550 314 81 1 SNI 43 2 NIER divides some larger firms in Retail Sale in non durable goods SNI 47 11 47 2 and creates a panel including both Kind of activity units and Local Kind of activity units 3 NIER also makes a further division of the largets hotels and restaurands SNI 55 56 on the basis of their Local Kind of activity units 4 SNI 68 2 has a different sample unit read more in chapter 2 3 24 Appendix 3 Questions in the Business Tendency Survey Manufacturing The production volume in the last 3 month increased The production capacity in the last 3 month increased Current production capacity more than sufficient Current capacity utilization CA ist percent Selling prices on the domestic market in the last increased 3 month Selling prices on the export market in the last increased 3 month Orders received on the domestic market in the increased last 3 month Orders received on the export market in the last increased 3 month Total orderbooks at present relatively large Export orderbooks at present relatively large Number of production weeks covered by current orderbooks about weeks How has the firms competitive situation changed over the last 3 months on the domestic market improved on the EU market improved outside the EU improved Current profitability good Number of employees in the last 3 months increased Shortage of at present skilled workers
6. ate weighted together on the basis of the number of employees in the population in 6 each sub sector These population weights are obtained from Statistics Sweden s Business Register In this way the results for the sub sectors ate weighted according to each sub sector s relative size in the overall population 2 5 2 TOTAL BUSINESS SECTOR Some questions are the same for all four main sectors manufacturing construction trade and pri vate service sector These questions are used to produce a weighted result for the total business sector The weighting is based on the number of employees in the population in each sector The questions that are calculated for the total business sector are e Confidence indicator e Number of employees outcome and expectations e Demand assessment of present situation e Labour shortages quarterly questions e Prices outcome and expectations quarterly questions 2 6 Size categories Firms are assigned to size categories based on the number of employees Table 2 6 1 Size categories 5 9 10 19 20 49 50 99 100 199 2200 N Oo Ui A U 2 7 Number of firms and cut offs Certain limits are set for how many employees a firm in a particular industry must have for it to be included in the population and so eligible for inclusion in the sample These cut offs depend on the structure of the industry The number of firms in the sample varies somewhat from year to year 1 Consists of the net ba
7. consumers assessment of their personal finances and the Swedish economy expectations for interest rates and inflation and plans for major purchases and savings The target population is the Swedish general public aged 16 84 Interviews are conducted in the first 15 days of each month and are evenly distributed over this period The sample of households is selected randomly each month from the PAR Konsument consumer database which covers around 4 5 million individuals divided into around 3 6 million households The records are based on information from the country s telecommunications operators and in clude both landline and mobile telephone numbers The records are updated daily Telephone in terviews are conducted using computer assisted telephone interviewing CATT software which permits logic checks on responses and manages all call backs With each monthly sample a comparison is made with the population statistics in the PAR Spar database which contains information on all individuals registered in Sweden Any differences be tween the samples are corrected by creating a matrix based on the gender age and regional distribu tion in PAR Spar This matrix is then used during data collection to ensure that age gender and region are correctly represented Once a quota is filled data collection in that group is discontinued The survey continues until 1 500 responses have been received It is not therefore possible to per form any analysis
8. for people to make major purchases furniture washing machines TV sets etc at the present time Yes now is the right time It is neither the right time or the wrong time No it is the wrong time purchase should be postponed Don t know 9 Over the next 12 months how do you think the amount of money you will spend on ma jor purchases will compare with what you spent over the last 12 months Will it be Much more A little more About the same A little less Much less Don t know 10 In the view of the general economic situation do you thing this is A very good time to save Quite a good time to save Neither a good nor an unfavourable time to save Rather an unfavourable time to save A very unfavourable time to save Don t know 11 Over the next 12 months how likely are you to be able to save any money Very likely Fairly likely 29 Pairly unlikely Very unlikely Don t know 12 Which of these statements best describe the present financial situation of your house hold We are saving a lot We are saving a little We are just managing to make ends meet on our income We have to draw on our savings We are running into debt Don t know 13 How likely are you to buy a car within the next 12 months Very likely Fairly likely Pairly unlikely Very unlikely Don t know 14 Are you planning to purchase or build a home within the next 12 months to live in yourself for a member of your famil
9. is possible that there is a risk of a degree of under coverage in other words that the survey miss es firms that are not included in the sampling framework due to them being misclassified or not being registered There is also a risk of over coverage due the inclusion of misclassified firms or dead firms that have not yet been removed These firms do not receive the questionnaire but remain part of the sample and are treated as non responders 3 The Business Tendency Survey s implementation 3 1 Data collection 3 1 1 QUESTIONNAIRE The questionnaire is addressed to the firm s management and designed in such a way that it can be answered quickly and easily The covering letter sent out together with the questionnaire contains a brief description of the purpose of the survey an instruction to ignore seasonal variations and an assurance that the answers will be kept anonymous The questionnaire also specifies the response deadline and states that participation 1s voluntaty 2 Percentage calculated on the basis of the firms included in the survey s population see table showing cut offs in Section 2 7 8 The survey uses different questionnaires for each main sector Every third month the question naires contain additional questions 3 1 2 QUESTIONS The questions asked are of three types Outcomes and expectations The first type of question concerns outcomes and expectations One example of such a question is whether the firm s
10. of non response When the selected individuals are contacted the database records are checked With landline calls the next birthday method is then used to decide who will represent the household Where the se lected individual is part of a multi person household the person interviewed is the next person in the household aged 16 84 to have a birthday This is done to avoid bias due to who is responsible for the telephone account tendency to answer the phone etc The results of the Consumer Tendency Survey are reported both as an aggregate for all consumers and broken down by gender age and region 5 Concepts and definitions 5 1 Net balances Net balances are used to make it easier to present and analyse the results of the tendency survey The net balance is the difference between the percentages of respondents responding positively and negatively to a question 13 For example if 40 per cent of firms reply that output volume has increased 10 per cent that it has decreased and 50 per cent that it has been unchanged the net balance will be 40 10 30 The net balance is therefore always between 100 all respondents responding negatively and 100 all re spondents responding positively Where the only possible answers to a question are yes and no the net balance is the percentage of firms answering yes In this case the net balance will be a value between 0 all respondents answer ing no and 100 all respondents answering y
11. the firm s services outcome Demand for the firm s services expectations Consumers Financial situtation of the household now Financial situtation of the household within 12 months Swedish economy now Swedish economy within 12 months good time to buy consumer durables now 5 4 Micro Index and Macro Index The Micro Index summarises consumers view of their personal finances and is calculated as the mean of the net balances seasonally adjusted and standardised for the following questions finan cial position of household assessment of present situation financial position of household ex pectations right time to make major purchases assessment of present situation major pur chases by household expectations The Macro Index summarises consumers view of the Swedish economy and is calculated as the mean of the net balances seasonally adjusted and standardised for the following questions Swe dish economy assessment of present situation Swedish economy expectations unemploy ment expectations Finally these time series are standardised into new series with a mean of 100 and a standard devia tion of 10 for the period since 1996 5 5 Situation The term situation is used as a simple way of showing an upturn or downturn in an industry Assuming a normal distribution around 68 per cent of observations will be within one standard deviation of the mean and around 95 per cent within two standa
12. within the next 1 3 months increase unchanged decrease Orders received on the export market en within the next P 3 months increase unchanged decrease Number of employees within the next 3 months increase unchanged decrease Production volume within the next 6 months increase unchanged decrease Construction Building activity in the last 3 months increased unchanged decreased Tender prices in the last 3 months increased unchanged decreased Order books in the last 3 months increased unchanged decreased Order books at present relatively large Just right too small Duration of assured order books about weeks Number of employees in the last 3 months increased unchanged decreased Factor currently limiting the firms production one alternative none insufficient demand shortage of machinery capacity and or materials shortage of labour weather conditions financial constraints other factors Building activity within the next 3 months increase unchanged decrease Tender prices within the next 3 months increase unchanged decrease Order books within the next 3 months increase unchanged decrease Number of employees within the next 3 months increase unchanged decrease Outlook for the construction market a year ahead improve unchanged get worse 26 Q 101 102 103 104 105 106 1071 1072 1074 1075 1076 1077 201 202 203 204 205 201 202 203 204 205 206 207 208 202 203 204 M 101 102 103 104 106
13. 8 Normalised UME SENES aio aa A namakamu masam 16 6 Points to note when interpreting the results eto rettet eere ere eire re dove rep 17 6 1 Industty sttuctute icone inna ea NN o QOO UD pO ODD Dod Na 17 6 2 Leto Line T MH 17 6 3 Compara bility OVCE E iois rin nian en e aE NE NN BNN nore un 17 7 Economie Tendency Indicatot sanii iet i i E EEA EA eere tees E E E eta 18 TA Putpose and hiStOfY Lian nd bsa 18 Tale Caleulation abu tuhan Anna ana 19 A LEPE tA ORS e eth Bu 19 BA alla ili yargi nasa una deed ted ede bled san an 20 Appendix 1 Industries in the Business Tendency Survey sss 21 Appendix 2 Coverage in the Business Tendency Survey sss 24 Appendix 3 Questions in the Business Tendency SutvVey ooooooocooooo 25 Appendix 4 Questions in the Consumer Tendency Sutvey sss 28 1 Administrative information 1 1 Background and purpose The Economic Tendency Survey is a survey of Swedish firms and consumers conducted by the National Institute of Economic Research NIER to capture trends in various economic variables The questions look partly at recent trends and the present situation and partly at expectations of the future The sutvey is qualitative which means that it does not ask for absolute numbers such as amounts of money ot numbets of units Respondents reply solely using qualitative response op tions such as increased unchanged decreased The questionnai
14. User guide to the Economic Tendency Survey Foreword This manual presents the background to the NIER s monthly Economic Tendency Survey of Swe dish consumers and firms and how it is conducted It explains the process from sampling and data collection to calculation methods and the end results There are also tips on what should be borne in mind when interpreting the results of the survey Section 1 presents the background purpose and administrative information such as reference peri ods and frequencies Sections 2 4 then look in greater depth at how the samples are chosen and how data are collected and processed Finally Sections 5 8 run through how the results are present ed and interpreted Contents locu Me 2 1 Administrative information sasa nda abah ana totot tes teo obedit oed rek doo etd tool bees deo eb diee o eer ea deed paga 4 t 1 Background and putpo8E aiananaabaananahanananehanabahahanahabahasehanabanahakani 4 VZ FreguEn ey c Q 4 1 3 Reference periodS ML 4 1 4 Confidentiality and duty of disclosute essent 4 1 5 Official St tlStiCSu seem rte tette tete an ne anna anna ant 5 1 6 EU Narmonisationi csicscssssisssscasisssstssaisssstssessssessisssicvsssssesaiussscssdedvssassesaisssguansesadeansgsadssvabusdadassanigaadessguayies 5 1 7 Comparison with quantitative statistics sesssss
15. and installation companiesfor machinery and equipment Construction Building and civil engineering Construction of buildnings Civil engineering Specialised construction activities Trade Retail trade incl wholesale and retail trade and repair of motor vehicles Wholesale and retail trade and repair of motor vehicles Wholesale trade except of motor vehicles and motorcykles Wholesale of agricultural raw materials and live animals Wholesale of food beverages and tobacco Wholesale of household goods Wholesale of information and communication equipment Wholesale of other machinery equipment and supplies Other specialised wholesale Retail sale of non durable goods Retail trade except of motor vehicles and motorcykles and retail sale of non durable goods Other retail sale in non specialised stores Retail sale of automative fuel Specialised stores for information and communication equipment Specialised stores for other household equipment Specialised stores for cultural and recreation goods Specialised stores for other goods Retail trade not in stores stalls or markets Private service sectors Lnad transport and transport via pipelines Road haulage companies and removal companies Water transport Air transport 22 26 1 26 8 26 2 3 26 5 6 27 27 5 27 1 4 27 9 28 29 30 30 9 30 1 4 31 32 32 5 32 1 2 S249 ap 89249 33 41 43 41 42 4i 42 43 45 47 45447 45 45 1 45 2 4 46
16. ce from which the sample is drawn is Statistics Sweden s Business Register FDB a comprehensive database of all firms in the country 2 3 Sample units Kind of activity unit KAU is the sample unit in all industries with the exception of Operating of own real estate SNI 68 2 where the sample unit is the enterprise In most cases the KAU is the same as the enterprise except for the largest conglomerates where a KAU may be just part of the enterprise Reporting at kind of activity level ensures a more industry specific picture 2 4 Industry classification according to SNI 2007 The industries in the Economic Tendency Survey ate defined on the basis of the Swedish Standard Industrial Classification SNI SNI 2007 is the standard used by Statistics Sweden since January 2008 to assign a firm s activities to one or more industries SNI 2007 corresponds to the interna tional classification NACE Rev 2 The Business Tendency Survey switched from SNI 2002 to SNI 2007 in May 2010 The industry classification is based on four main sectors e Manufacturing industry SNI 10 33 Construction industry SNI 41 43 Retail trade SNI 45 47 Private service sector SNI 49 96 A list of all industries and their SNI codes can be found in Appendix 1 2 5 Other composites 2 5 1 TOTAL TRADE PRIVATE SERVICE SECTOR To calculate the results for the entire trade and the entire service sector the results for the constitu ent sub sectors
17. conomic Tendency Indicator provides information on a calendar quarter between two and five months before GDP figures for the same quarter are published by Statistics Sweden The quantitative relationship between the Economic Tendency Indicator and the change in GDP is interpreted such that an increase in the indicator of 10 points in a quarter corresponds to an increase in the estimated annual rate of GDP growth of just over 1 percentage point The general conclusion is that the Economic Tendency Indicator exhibits rela tively strong covariance with the change in GDP 8 Availability The results are published at the end of the month roughly a week after data collection is complet ed All of the tendency series are available as time series on the NIER s website www konj se There are also various charts for each sub sector The entire report is available in PDF format to gether with an English summary and newsletters are sent to users when new results are published Firms responding to the Business Tendency Survey are sent results and analysis for their particular industry and those responding by e mail are sent an e mail message at the time of publication with a link to the results The results of the Consumer Tendency Survey are also available through Statistics Sweden www scb se 20 Appendix 1 Industries in the Business Tendency Survey Manufacturing Intermediate goods Investment goods Consumer goods Non durable consu
18. count of the industry s struc ture An ideal sample would consist of large numbers of equal sized firms but most industries do not look like this Some consist of a small number of large firms while others feature a relatively large number of small firms but are dominated by a small number of larger ones In the ideal sample there is a clear connection between the size of a net balance and the size of the quantitative increase in a variable In industries with a small number of large firms this relationship is less certain In the pulp industry or the supermarket trade for example which meet these criteria and also have a relatively uniform product range large net balances do not necessarily mean large changes in volumes or prices 6 2 Zero line Another factor to be borne in mind when interpreting the results is the zero line in the charts If the curve for a flow variable such as new orders is rising and above the zero line this means that new orders are increasing and are increasing more quickly than before If however the curve is rising but below the zero line this means that new orders are decreasing only not as quickly as before With some variables the zero line should not be assigned its absolute value This applies particular ly to the questions where firms are asked to assess theit own order book and stocks Here their assessment should be compared with a historic average rather than the zero line 6 3 Comparability o
19. eaker growth than normal This is also illustrated by the plus and minus signs shown under situation read more about this concept in Section 5 5 above 7 3 2 HIGH LEVEL OF TRANSPARENCY One important role of the Economic Tendency Indicator is to summarise the underlying business and consumer surveys in a way that is as easy as possible to interpret The net balances underlying the Economic Tendency Indicator are therefore the same as those underlying the individual confi dence indicators in the different surveys After processing the net balances ate aggregated using the weighting system described above which means a high level of transparency 3 The mean is already 100 but the standard deviation may differ from 10 A linear combination of variables with a mean of 100 will also have a mean of 100 but the standard deviation will differ because it is based on a non linear quadratic calculation 19 7 3 3 COVARIANCE WITH GDP The Economic Tendency Indicator is intended to provide an overall measure of current sentiment in the Swedish economy The starting point for the indicator the questionnaire surveys of firms and consumers provides a broad base of information but not sufficiently broad to cover the entire economy For example there is no information on the public sector The NIER has analysed how the Economic Tendency Indicator can be used to assess GDP growth The change in GDP has been chosen as the yardstick because the E
20. es In the consumer survey where the questions generally contain more than three possible answers the net balances are calculated on the basis of the following response options Table 5 1 1 Calculation of balances in the Consumer Tendency Survey 1 4 a lot better a little better a little worse a lot worse 5 very much higher quite a bit higher a little higher lower 6 increase faster increase at a slower rate stay about the same fall slightly Z increase sharply increase slightly fall slightly fall sharply 8 yes now is the right time no it is the wrong time purchase should be postponed 9 much more a little more a little less much less 10 a very good time to save quite a good time to save rather an unfavourable time to save a very unfavourable time to save 11 very likely fairly likely fairly unlikely very unlikely 12 we are saving a lot we are saving a little wWe have to draw on our savings we are running into debt HS BU very likely 4 fairly likely fairly unlikely very unlikely 14 yes definitely possibly probably not definitely not 16 a lot greater a little greater a little less a lot less The results of the consumer survey s questions on perceived and expected inflation deflation as a percentage rate and on expected wage increases and mottgage rates are reported as means includ ing and excluding extreme values 5 2 Gross values The gross value is the percen
21. eseeeeeneneene tette tenete tenente nnne tnnenis 5 2 The Business Tendency Survey s sample sse eterne tenentes 5 2 1 OPE 6 2 2 wires MEN 6 2 3 Sample NIS 6 2 4 Industry classification according to SNI 2007 6 2 5 Other CODDOSI eS 2e noeh qae EE ER IERI OTRO RT ERI TITRE RE 6 2 6 SIZE CACEROTIES MM M 7 27 Number of fitms and c t offs retro tton toii 7 2 8 COM RM M 8 3 The Business Tendency Survey s implementation sssseeenenetete tentent 8 5 1 Data collection oit tet tte teitse tette ete iie ei reiten tpe ite tg tiger tees 8 32 Calculation sists PEL G 10 33 WIGS ID M 12 34 Response frequency coerente ete edere redeat eda 12 4 The Consumer Tendency Survey s sample and implementation sss 13 5 Concepts and definitions ettet orit oor tee ce tara oo e eso ob bebe eek adeo e sepe oca 13 Baird 13 ACH M 14 5 3 Confidence 1ndic tots netter terrre a n ER ER TOP SERE oe Eripe esed 14 5 4 Micro Index and Macro Index eene RR eR RR R RIEF RES 15 SEORSIM Nec 15 5 6 Seasorially adjusted time Seriesissa eiii 16 5 7 Trerided time seties u i esossescseei mene banana ms naa 16 5
22. fraction is used here in other words the inverted probability of each sample element being selected N n where N is the number of firms in the population and n is the number of firms in the sample The results for all industries are calculated in the same way before being added together 3 2 2 FORMULA The formula used for the sub sectots is W n y 2 2 Sw n y n L me j f LW i l m J SW Total weight for stratum j for response i l nj gt VW Total weight for all firms in the sample for stratum j i l nj Swe Total weight for all firms in stratum j answering the question i l 11 Nj Number of firms in the population for stratum j nj Number of firms in the sample for stratum j 3 3 Weights The weights used to weight answers according to firms size vary between industries and questions In the manufacturing industry the main weight used is value added but number of employees is used to weight questions on employment In the other sectors number of employees is used with the exception of Operating of own real estate SNI 68 2 where the taxable value of the proper ties is used The weights are updated annually when the sample is updated It might seem most natural to use different weights for different questions in other words for ques tions on output to be weighted according to firms share of output in their industry and questions on employment to be weighted by number
23. ies are aggregated using a weighting system where the net bal ances for the manufacturing industry are weighted at 40 per cent the private service sector at 30 per cent the retail trade and the construction industry at 5 per cent each and consumers at 20 per cent Note that the weights for each question depend on how many questions are included in each sec tor For example there are five questions from the consumer survey which are each assigned a weight of 20 100 5 0 04 Three questions are used for the manufacturing industry which means that each question is given a weight of 40 100 3 0 13 Note that some net balances are included in the aggregation with reversed signs 7 2 3 FURTHER STANDARDISATION Finally this time series is standardised into a new series with a mean of 100 and a standard devia tion of 10 3 7 3 Interpretation 7 3 1 ECONOMIC GROWTH The Economic Tendency Indicator is constructed in such a way that it has a mean of 100 and a standard deviation of 10 Assuming a normal distribution values between 90 and 110 will be seen in 68 per cent of cases while values above 110 and below 90 will each occur in 16 per cent of cases The interpretation of the results of the Economic Tendency Indicator is then that values over 100 correspond to stronger economic growth than normal and values over 110 to much stronger growth than normal Similarly values below 100 and 90 will be interpreted respectively as weaker and much w
24. ithin the next 3 months Number of employees within the next 3 months Demand for the firms services within the next 6 months increase increase increase increase 27 unchanged satisfactory unchanged large enough unchanged no unchanged satisfactory unchanged unchanged unchanged unchanged unchanged unchanged unchanged large enough unchanged satisfactory unchanged no no unchanged unchanged unchanged unchanged decreased bad Decreased too small decreased decreased poor decrease decrease decrease decrease get worse worsened decreased too small decreased poor decreased decrease decrease decrease decrease Q 101 102 103 104 105 106 107 108 201 202 203 204 205 101 102 103 104 105 106 107 108 109 110 111 112 113 114 115 201 202 203 204 M 101 102 103 104 201 203 204 202 205 101 102 103 104 105 201 202 203 Appendix 4 Questions in the Consumer Tendency Survey 1 How does the financial situation of your household now compare with what it was 12 months ago Has it Got a lot better Got a little better Stayed the same Got a little worse Got a lot worse Don t know 2 How do you think the financial position of your household will change over the next 12 months Will it Get a lot better Get a little better Stay the same Get a little worse Get a lot worse D
25. l statistics 1 6 EU harmonisation The Economic Tendency Survey forms part of DG ECFIN s Joint Harmonised EU Programme of Business and Consumer Surveys This entails a common framework across the EU for conducting these surveys in terms of the timing of data collection the industries covered and the formulation of questions All EU member states conduct monthly tendency surveys A complete list of all ques tions and industries presented by DG ECFIN can be found in the Joint Harmonised EU Programme of Business and Consumer Surveys User Guide DG ECFIN 2007 Each month the NIER submits the results of its monthly survey to DG ECFIN in accordance with the latter s guidelines for questions and industry classification The results for the EU as a whole are published monthly on DG ECFIN s website DG ECFIN co finances the member states tendency surveys The time series published by the NIER may differ from the corresponding series from DG ECFIN because the two use different methods to seasonally adjust the time series The NIER uses X 12 ARIMA while the EU uses Dainties 1 7 Comparison with quantitative statistics While quantitative statistics show changes in objective measures and levels the results of the Eco nomic Tendency Survey show how different economic actors interpret and assess these changes Quantitative statistics are often published with a significant time lag whereas outcome data from the tendency survey for recent deve
26. lable only a quarterly basis from 1973 to 1976 7 Economic Tendency Indicator 7 1 Purpose and history The Economic Tendency Indicator aims to measure current sentiment in the Swedish economy using information from the NIER s various tendency surveys and presenting it in a transparent manner The questions included and the weights used have been chosen to ensure a high degree of correlation with GDP growth The Economic Tendency Indicator was first published in February 2007 The model is the European Commission s Economic Sentiment Indicator ESI The EU also publishes an ESI for Sweden but the Economic Tendency Indicator is not based on exactly the same values as the ESI mainly for technical reasons Not only is the Consumer Confidence Indica tor defined differently but the seasonal adjustment method also differs 18 7 2 Calculation 7 2 1 SEASONAL ADJUSTMENT AND STANDARDISATION OF NET BALANCES The starting point for the Economic Tendency Indicator is the questions in the monthly Business Tendency Survey and the Consumer Tendency Survey These questions are also included in the individual confidence indicators in the tendency surveys The Economic Tendency Indicator is based on the questions net balances All net balances are seasonally adjusted using X 12 Arima and then transformed standardised to a mean of zero and a standard deviation of 1 7 2 2 AGGREGATION OF SECTOR NET BALANCES In the next step the standardised ser
27. lances for total order book in the manufacturing industry order book in the construction industry sales situation in the retail trade and volume of assignments on hand in the private service sector 7 Table2 7 1 Cut offs and number of firms 2013 Manufacturing 10 33 220 1594 Construction 41 43 2201 486 Trade 45 47 1 592 Trade and repair of motor vehicles 45 220 199 and motorcycles Wholesale trade 46 210 319 Retail trade except of motor vehicles 47 3 9 47 19 25 600 and motorcykles Retail sale of food beverages and 47 2 47 11 250 474 tobacco Private service sector 49 96 2 207 2 799 Total business sector 6 471 1 Public works civil engineering Nace 43 has a cut off of 10 employyes 2 Restaurants architects and letting of own property have different cut offs 2 8 Coverage In the manufacturing industry around 43 per cent of firms in Statistics Sweden s Business Register are included in the survey sample The corresponding figures for the construction industry retail trade and private service sector are 11 12 and 38 per cent If we also take account of firms size in terms of number of employees coverage rises to 82 per cent for the manufacturing industry 52 per cent for the construction industry 59 per cent for the retail trade and 81 per cent for the private service sector The size categories covered vary somewhat from sector to sector A table showing coverage by sector and size category can be found in Appendix 2 It
28. lopments are available much more quickly Compared with quantitative statistics which usually cover variables reflecting just one aspect of a firm s activity the tendency surveys gather information on multiple variables to obtain a more complete picture of a sector of the economy The Economic Tendency Survey measures non quantifiable variables such as assessments of current order book and stocks as well as variables that illustrate departures from the desired level such as various limiting factors for supply or de mand This type of survey is also unique because it includes questions on plans and expectations 2 The Business Tendency Survey s sample The Economic Tendency Survey is a panel survey for which a random sample of around 6 500 firms is selected each year However all firms with more than 100 employees are automatically 5 selected which means that these firms are included in every sample Only firms that come below this threshold for automatic inclusion in other words small businesses are replaced when the sam ple is updated but all firms are then assigned new weights read more about weights in Section 3 3 below The sample is stratified by size and industry 2 1 Population The population that the Business Tendency Survey aims to cover is firms with activities in Sweden in the relevant industries see Appendix 1 with a certain number of employees see Table 2 7 1 2 2 Sampling frame The sampling frame the sour
29. ly adjusted time series are submitted to the EU which uses a different software pack age Dainties for seasonal adjustment One of the big differences when using Dainties is that the time series are not revised retrospectively as new observations are added The argument in favour of this is that the answer reflects the respondent s view at a certain point in time and cannot be corrected in hindsight The advantage of X 12 Arima is that the estimation of seasonal factors can be performed using more information and so attain greater precision These differing seasonal ad justment methods mean that the seasonally adjusted time series published by the NIER may differ from the equivalent series from the EU 5 7 Trended time series A trended time series shows the long term trend in a series removing more noise than the sea sonally adjusted series The trended series are relatively smooth and the reduction in noise makes it easier to identify turning points in the business cycle for example The trended series in the Busi ness Tendency Survey are calculated at the same time as the seasonally adjusted series using X 12 Arima 5 8 Normalised time series A normalised time series is a time series that has been transformed in such a way that it has a mean of 0 and a standard deviation of 1 16 6 Points to note when interpreting the results 6 1 Industry structure When interpreting the results for an industry it is important to take ac
30. mer goods Durable consumer goods Manufacture of food beverages and tobacco Manufacture of textiles clothing and leather products Industry for wood and products of wood and cork Industry for paper and paper products Printers other industry for recorded media Industry for coke and refined petroleum products Industry for chemicals and chemical products Industry for basic pharmaceutical products and preparations Industry for rubber and plastic products Industry forother non metallic mineral products Industry for fabricated metal products Industry for computer electronic and optical products 21 10 33 10 6 10 9 13 1 3 16 1 2 17 11 12 17 2 20 1 3 20 5 6 22 23 24 1 5 25 5 9 26 1 26 8 27 1 4 27 9 25 1 4 26 2 3 26 5 6 28 29 30 1 4 32 5 10 1 5 10 7 8 11 12 13 9 14 15 18 20 4 21 26 4 7 27 5 30 9 31 32 1 4 32 9 10 1 5 10 7 8 11 12 13 9 14 15 18 20 4 21 32 3 4 32 9 26 4 7 27 5 30 9 31 32 1 2 10 12 10 10 6 10 9 10 1 5 10 7 8 11 12 13 15 13 13 1 3 13 9 14 15 16 16 1 16 2 17 17 11 17 12 17 2 18 19 20 20 4 20 1 3 20 5 6 21 22 23 24 24 1 3 24 4 5 25 25 1 4 25 5 9 26 26 4 26 7 Industry for electrical equipment Industry for machinery and equipment n e c Industry for motor vehicles trailers and semi trailers Industry for other transport equipment Furniture industry Other manufacturing industry Repair shops
31. of employees and so on This procedure is used by tradition in the manufacturing industry but not in the other sectors However it has turned out that the net balances are not especially sensitive to the choice of weighting variable and in practice it is sufficient to use a single variable that reflects the general economic significance of a firm when weighting all questions 3 4 Response frequency A weighted response frequency is calculated for all sectors The sum of the responding firms weights is divided by the sum of the weights for all firms in the sample xw Response frequency EL x 100 n 2 Wi i 1 where n number of firms responding n number of firms in the sample Wi weight for firm 7 The weighted response frequency 1s normally around 70 per cent for the manufacturing industry and the construction industry and around 50 60 per cent for the retail trade and the private service sector For each survey a check is made that the very largest firms have responded In industries dominat ed by one particular firm or a small number of firms a check is made that these firms have re sponded All units that do not respond are treated as a non responders even units that no longer have any activities or have left the sampling frame for another reason 12 4 The Consumer Tendency Survey s sample and implementation The Consumer Tendency Survey interviews 1 500 Swedish households each month The questions cover
32. on t know 3 How do you think the general economic situation in this country has changed over the last 12months Has it Got a lot better Got a litde better Stayed the same Got a little worse Got a lot worse Don t know 4 How do you think the general economic situation in this country will develop over the next 12 months Will it Get a lot better Get a little better Stay the same Get a little worse Get a lot worse Don t know 5 Compared with 12 months ago do you find that prices in general are Very much higher Quit a bit higher A little higher About the same Lower Don t know 5a b Compared with 12 months ago how much higher in percent do you think that prices are now Average Including extreme values Excluding extreme values 28 6 Compared to the situation today do you think that at in the next 12 months prices in general will Increase faster Increase at the same rate Increase at a slower rate Stay about the same Pall slightly Don t know 6a b Compared with today how much in percent do you think that prices will go up i e the rate of inflation 12 months from now Including extreme values Excluding extreme values 7 How do you think the level of unemployment in the country will change over the next 12 months Will it Increase sharply Increase slightly Remain the same Fall slightly Fall sharply Don t know 8 Do you think there is an advantage
33. output volume has increased been unchanged or decreased over the past three months These questions contain well known concepts and do not ask for quantities respondents are instead allowed to make their own interpretations Assessments The second type of question concerns assessments where the answers will normally be the re spondent s own subjective assessment of a particular economic variable One example of such a question is whether the firm s order book is relatively latge sufficient or too small Quantitative questions The last type of question is quantitative questions One example is the question on capacity utilisa tion as it needs to be answered with a percentage Again respondents are allowed to make their own interpretations Appendix 3 contains a full list of the questions in the Business Tendency Survey 3 1 3 COMPOSITE QUESTIONS The questions on selling prices and new otders in the manufacturing survey are divided into the domestic market and the export market The results for these questions are then weighted together to obtain total selling prices and total new orders The weights used are the percentages of the firm s sales at home and abroad 3 1 4 INFLATION EXPECTATIONS The quarterly survey also includes a question on firms expectations for prices in general The ques tion is forward looking and formulated in the same way as the equivalent question in the Consumer Tendency Survey It has two parts and is
34. rd deviations of the mean Against this background the indicator for the month in question is assigned a sign of Of Table 5 5 1 The situation The situation is very strong the confidence indicator is above 110 The situation is strong the confidence indicator is between 101 1 and 110 The situation is normal the confidence indicator is between 99 and 101 The situation is weak the confidence indicator is between 90 and 98 9 The situation is very weak the confidence indicator is below 90 The probability of and is then 30 per cent each and the probability of and is 16 percent each The probability of is 8 percent Note that the validity of the assumption that the time series are normally distributed has not been subjected to detailed analysis The situation in the private service sector should be interpreted with particular caution as the time series here are significantly shorter than in the other sectors and situation may take on a different meaning to the other sectors 15 Many of the questions included in the confidence indicators concern changes such as the expected change in output As a result the situation will to a great extent describe the size of a change growth relative to the average In other words the situation does not describe the level of out put relative to normal output so much as the level of growth relative to normal growth The situa tion doe
35. res do not include detailed definitions The questions contain well known concepts such as number of employees without defining what exactly is meant by employees for exam ple whether this includes full time and part time positions temporary staff etc The idea is that the questions can be answered without a great deal of research The need for a rapid response is re flected throughout the survey Speed is important so that the results are as close as possible to the current situation This enables the results to be published before the corresponding traditional sta tistics in order to provide an early indication of the possible outcome The NIER began conducting quarterly business surveys on a limited scale the textile industry back in the 1950s The entire manufacturing industry has been covered since 1964 and these days almost all sectors of industry are included The main exceptions are agriculture amp forestry and mining amp quarrying Since 1996 there have also been monthly surveys which were introduced when Sweden joined the EU and are a requirement of the European Commission s Directorate General for Eco nomic and Financial Affairs DG ECFIN The Consumer Tendency Survey began in 1973 on a quarterly basis and has been performed monthly since 1993 1 2 Frequency The Economic Tendency Survey is conducted monthly Every third month the business surveys contain additional questions To distinguish between the different surve
36. s not therefore describe the economic situation as defined by the NIER in other con texts The economic situation reflects the level of output relative to normal output 5 6 Seasonally adjusted time series Respondents to the business survey are asked to ignore seasonal variations With some industries and some questions however respondents find it difficult to distinguish between seasonal and cyclical patterns This means that respondents own allowance for seasonal variations is not always adequate and so the data may contain seasonal variations All time series in the Business Tendency Survey other than the price questions are therefore seasonally adjusted The seasonal adjustment of time series involves eliminating variations and effects in the time series that are due to seasonal factors All results of the Business Tendency Survey presented in charts are seasonally adjusted except for the price questions The Business Tendency Survey is seasonally adjusted using X 12 Arima When seasonally adjusting questions with two possible answers yes no where a negative value is not reasonable a method is used whereby the time series is transformed prior to seasonal adjustment and the seasonally adjust ed series is then transformed back This process avoids negative seasonally adjusted values Net balances running from 100 to 100 are similarly transformed so that the seasonally adjusted values do not fall outside this interval Non seasonal
37. scanning to ensure that the respondent has not selected more than one answer to a particular question If so an assessment is made of which an swer is most likely Various logical checks are also performed When responding electronically it is not possible to select more than one answer to a particular question Answets are not systematically verified or inspected for consistency except for the question on firms inflation expectations see Section 3 1 4 above However uncertainties and major deviations in the processed results are always investigated 3 2 Calculation 3 2 1 WEIGHTED RESPONSES Firm size The significance of a firm s responses 1s assumed to be related to the firm s size Responses from a large firm are given more weight than those from a small firm Once a firm s responses have been received they are therefore weighted according to the firm s size Imagine that the distribution of responses to a question is as follows Increase 108 27 Unchanged 216 54 Decrease 76 19 Sum 400 100 If we assume that the question concerns the change in output volume and that the firms answeting decreased are on average three times the size of those replying increased and that those re sponding unchanged are twice the size of those replying increased it is reasonable to conclude that the average decrease in output for those answering decreased is larger than the average in 10 crease in output for those repl
38. tage of respondents giving a particular answer For example if 40 per cent of firms reply that output volume has increased 10 per cent that it has decreased and 50 per cent that it has been unchanged the gross values will be 40 10 and 50 5 3 Confidence indicators Confidence indicators are used as an aggregate measure of the situation in each industrial sector and the household sector The confidence indicator is a mean of the net balances seasonally adjusted and standardised for selected questions Finally this time series is standardised into a new series with a mean of 100 and a standard deviation of 10 for the period since 1996 The choice of ques tions included in each confidence indicator has been harmonised with EU guidelines and is de signed to obtain the greatest possible correlation with a particular reference series This does not apply to the Consumer Confidence Indicator however which is defined slightly differently to EU guidelines 14 Table 5 3 1 Questions included in the confidence indicators Manufacturing Order books present situation assessment stock of finished goods present situation assessment production volume expectations Construction Order books present situation assessment number of employed expectations Trade Selling volume outcome stock of goods present situation assessment selling volume expectations Private service sector The firm s business situation outcome Demand for
39. ver time 6 3 1 BUSINESS TENDENCY SURVEY Past changes that may affect the time series include SNI updates Most SNI updates have brought only minor changes and had little impact on the industry classification in the tendency survey However the latest update from SNI 2002 to SNI 2007 in May 2010 entailed more extensive changes The change of sample unit from enterprise business registration number to kind of activity unit from the year 2000 sample update Minor changes to the questions in the business survey In this type of survey which is intended to show developments in economic variables over time changes to the questions need to be limited Sometimes however it is necessary to make changes Only minor alterations were made from the 1960s to the 1990s the questions about shortages of other professional staff and other tech nical salaried staff were merged into a single question about shortages of other 17 staff a sixth answer was added to the question about the main obstacles to in creased production in the manufacturing industry and the construction industry and the question about the number of employees in the construction industry and the manufacturing industry was altered previously it was divided into num ber of workers and number of salaried staff e Major changes to the questionnaires and merging of time series In 2002 2005 there was a major review of the survey and the questionnaires for all of the sec
40. worded as follows 1 How do you expect prices in general i e Swedish consumer prices to develop in the next 12 months inctease unchanged decrease 2 By what percentage do you expect them to increase decrease An interval may be stated The values reported are calculated as unweighted means of firms responses Where an interval is given the average of the upper and lower values is used If a firm replies decrease to the first question and gives a positive percentage in the second ques tion the percentage is interpreted as negative If a firm replies unchanged to the first question and does not answer the second this is interpreted as a response of 0 per cent If a firm answers the second question with a percentage below 5 or above 15 the response is treated as extreme and filtered out when calculating the mean 3 1 5 COLLECTION METHOD Responses to the surveys are collected both by post and by e mail electronically Electronic ques tionnaires were introduced in the year 2000 and around 50 per cent of the questionnaires are now completed electronically From the time the questionnaires are sent out respondents normally have just over a week to reply before a reminder is sent After a further week the largest firms are given a telephone reminder All in all the responses are collected over a period of almost three weeks 3 1 6 CHECKS AND VERIFICATION Questionnaires are checked during registration
41. y as a holiday home to let etc Yes definitely Possibly Probably not Definitely not Don t know 15 Over the next 12 months how likely are you to spend any large sums of money on home improvements such as central heating sanitary ware etc Very likely Fairly likely Pairly unlikely Very unlikely Don t know 16 Compared with 12 months ago is the risk that You will become unemployed A lot greater A little greater About the same A little less A lot less No opinion 30 National Institute of Economic Research Kungsgatan 12 14 Box 3116 SE 103 62 Stockholm Sweden Phone 46 8 453 59 OO Fax 46 8 453 59 80 E mail ki konj se Website www konj se
42. yes technical employees yes other employees yes Stocks of raw materials at present too large Stocks of finished goods in the last 3 month increased Stocks of finisched goods at present too large Factor currently limiting the firms production one alternative none insufficient demand shortage of capacity or materials shortage of labour financial constraints other factors The table continues on the next page 25 unchanged unchanged Sufficient unchanged unchanged unchanged unchanged just enough just enough unchanged unchanged unchanged satisfactory unchanged no no no just enough unchanged just enough decreased decreased not sufficient decreased decreased decreased decreased to small to small worsened worsened worsened poor decreased too small decreased too small Q 101 102 103 104 105 106 107 108 109 110 111 112 113 114 115 116 117 118 119 120 121 122 123 124 125 126 127 128 M 101 102 103 104 105 107 106 Manufacturing continuing Pproduction volume within the next 3 months increase unchanged decrease Production capacity within the next 3 months increase unchanged decrease Selling prices on the domestic market within the next 3 months increase unchanged decrease Selling prices on the export market within the next 3 months increase unchanged decrease Orders received on the domestic market
43. ying increased The relative response frequencies above do not therefore give an accurate picture of the change in output volume If however we assume that on average the changes are proportional to firms size and weight the responses received according to firms size the unweighted response frequency above is trans formed as follows Increase 1 27 1 27 14 54 2 19 3 14 Unchanged 2 54 2 27 14 54 2 19 3 56 Decrease 3 19 3 27 14 54 24 19 3 30 Sum 100 The weighted responses thus give a slightly different picture to the unweighted responses Non responders The weighted responses for each size category and industry are added together and then extrapolat ed to the level they would have been if all firms in the sample had responded to the question If for example the question is answered by firms with a combined weight of 90 per cent 90 100 of the weight of the entire sample for a particular size category in a particular industry the firms weighted responses will be multiplied by a factor of 100 90 Extrapolation As firms in different strata are selected with different probabilities responses need to be extrapolat ed to the level they would have been if all firms in the population in a particular stratum had been surveyed A larger weight is given to small sample units as they represent other small units that were not included in the sample The inverted value of the respective stratum s sampling
44. ys they are referred to as the quarterly and monthly tendency surveys The results of the quarterly surveys are published in April first quarter July second quarter October third quarter and January fourth quarter 1 3 Reference periods The questions in the Business Tendency Survey relate to the past three months and the next three months apart from a few questions concerning expectations for the next six months In the con sumer survey the reference periods are the past 12 months and the next 12 months 1 4 Confidentiality and duty of disclosure The disclosure of information for the Economic Tendency Survey is voluntary and the information is privileged under chapter 24 section 8 of the Public Access to Information and Secrecy Act 2009 400 The automated processing of personal data is covered by the rules of the Personal Data 4 Act 1998 204 and there are also special rules on the processing of personal data for statistical purposes in the Official Statistics Act 2001 99 and Official Statistics Ordinance 2001 100 1 5 Official statistics The government has made the NIER responsible for the statistics in the Consumer Tendency Sur vey Official statistics must always be available in electronic form This responsibility for official statistics includes ensuring that the statistics are objective documented and quality assured Statis tics Sweden s website www scb se contains more information on the country s officia
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