Communication from the Commission - Joint harmonized EU programme of business and consumer surveys
Date: 2000-11-29
Institutions: European Commission
Subjects: approximation of laws, economic indicator, economic survey, short-term economic prospects

COMMISSION OF THE EUROPEAN COMMUNITIES

Brussels, 29.11.2000
COM(2000) 770 final

COMMUNICATION FROM THE COMMISSION

JOINT HARMONIZED EU PROGRAMME OF BUSINESS AND CONSUMER
SURVEYS

COMMUNICATION FROM THE COMMISSION

JOINT HARMONIZED EU PROGRAMME OF BUSINESS AND CONSUMER
SURVEYS

1.

INTRODUCTION

The Ecofin Council’s report, an “Economic policy co-ordination”, to the Helsinki
European Council underlined the point
that for effective monitoring and co-
an improved understanding of economic
ordination of economic policies,
developments is of major importance. Moreover, as regards the euro area, there is a
need to enhance the visibility of this relatively new economic entity.

The Commission co-ordinates regular harmonised business and consumer surveys in
different economic sectors in the EU. In recent years, the service sector has been
included in the programme and the surveys have been extended to the applicant
countries. The results are used as such or summarised in synthetic indicators
(confidence indicators). They are published in a press release at the beginning of the
month following the data collection according to a fixed time schedule.

2.

THE NEED FOR A JOINT HARMONISED EU PROGRAMME

Business and consumer surveys are qualitative economic surveys, intended for short-
term economic analysis. While conventional econometric models of the economy
perform reasonably well when the economy is on a stable growth trend, their
performance is not so good for signalling changes of direction in the economy. There
is an increasing interest in the use of economic surveys for predicting turning points
in the economic cycle. Therefore, business and consumer surveys are a necessary
complement of quantitative statistical surveys, from which they differ in methods
and use. The frequency, rapidity and continuous harmonisation of the surveys in the
framework of the Joint Harmonised EU Programme of Business and Consumer
Surveys are some of their main qualities.

The harmonised business and consumer surveys in the European Union were
initialised in 1961 by the Commission. The first survey was the harmonised business
survey in industry conducted in 1962. Since then, both the scope and the sectors
covered by the surveys have expanded considerably.

institutes work with harmonised questionnaires elaborated in co-
The national
operation between the national experts and the Commission. Harmonisation is
essential to allow the comparison of business cycles in the different Member States,
and to make possible the calculation of a meaningful business cycle index for the
euro area and for the EU as a whole, in order to inform the EU authorities, the
Member States and the various economic agents of the present economic situation.

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Today, business and consumer surveys following the EU harmonised scheme are
carried out in more than 40 countries world-wide, including the applicant countries
of Central and Eastern Europe. Integration of their surveys in the EU programme will
be in line with their integration into the Union.

3.

IMPLEMENTATION OF THE PROGRAMME

The surveys are addressed to managers in the following sectors:

• industry,

• construction,

• retail trade,

• services,

• as well as to consumers.

All surveys are monthly surveys, except for the investment survey, which is
conducted twice a year. The data is collected by the national institutes in the first half
of the month and the results are published by the Commission at the beginning of
the next month. Some 50 000 firms and 20 000 consumers are surveyed each month
in the Community; the samples vary according to the size of the Member Countries.
The industry survey covers 56 sectors whereas the other surveys include 5 to 9
different sectors. 4 to 6 monthly questions are addressed to the managers in each
sector. The consumers are split in 25 socio-economic categories and asked for their
opinion on 12 different topics.

A quarterly world-wide survey addressed to economic experts, the Economic Survey
International, is also included in the programme.

In addition, ‘ad hoc’ surveys are conducted on issues of particular interest. As an
example, ‘ad hoc’ surveys concerning the labour market have been carried out in
1985, 1989, 1994 and 1999. The results of the most recent survey will be published
by the end of this year with special focus on labour flexibility and the impact of new
technologies on the performance of the EU labour market.

Meetings of business survey experts take place twice a year in order to evaluate the
results of the surveys. All questionnaires are constantly updated to meet
the
requirements of the economic analysts.

Due to the rising importance of services in the European economy, the coverage of
the programme has recently been extended to the service sector.

The integration of the applicant countries into the programme is necessary in order to
provide reliable and comparable data to follow their economic evolution at present,
and for the elaboration of an aggregate of the EU when these countries are granted
accession. A joint project between the OECD and the Commission was started in
1991 aiming at the implementation of the harmonised EU programme of consumer
and business surveys. The results are now regularly published in European Economy,
Supplement B.

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4.

SOURCE OF INFORMATION

The fact that the business and consumer survey results are available rapidly and that
they contain information about economic agents’ expectations makes them valuable
for forecasting purposes. The Commission has been using an econometric model, the
BUSY model, based on the survey results since 1982. In 1996 a new model, BUSY
II, incorporating recent developments in modelling techniques, was constructed to
forecast GDP and its main components.

The results of the surveys are intensively used by the Directorate General for
Economic and Financial Affairs as an indispensable tool of economic surveillance
inside and outside the EU.

In addition, these surveys have become a fundamental source of information for
monitoring the evolution of the European Monetary Union. The European Central
Bank uses these results as significant input for the implementation of monetary
policy in the Euro area.

The results of the programme are published each month in “First Results” by means
of a press release and a mailing (electronic mail and fax) to a selected group of news
agencies and clients. Later in the month “European Economy, Supplement B” is
published with a more complete set of data, graphs and comments. Both publications
are also available as on-line versions on the homepage of the Directorate General for
Economic and Financial Affairs:

http://europa.eu.int/comm/economy_finance/document/eesuppb/firstresults.htm

http://europa.eu.int/comm/economy_finance/document/eesuppb/eebidxen.htm

5.

INDICATORS

The presentation of survey results needs to be easily accessible, preferably by means
of a single measure, a confidence indicator. For the economic sentiment indicator
and other sector indicators to be useful, they must possess a series of properties such
as consistency, timeliness, comparability, etc.

The tracking quality of the indicators is proven by the very high values obtained for
the correlation between consumer confidence and the growth in private consumption,
between construction confidence and the growth in construction investment, and
between industrial confidence and the growth in industrial production.

Given the new set of data available at present, the indicators have to be evaluated and
improved in order to enhance their usefulness. Therefore the Commission has placed
a contract for a study to evaluate the existing indicators and to develop an alternative
Economic Sentiment Indicator and leading indicators, including those for the retail
trade sector and the service sector. Various research projects are being undertaken to
develop new sector indicators or improve the existing ones in order to better follow
the economic evolution.

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6.

CONCLUSION

those

concerned with economic

The results of the harmonised business and consumer surveys in the EU are useful
for
trends: government departments,
all
management,
and all decision-makers. They have become an
indispensable tool of economic surveillance in the EU, and for monitoring the
evolution of the European Monetary Union as well as the development of the
applicant countries’ economies.

researchers,

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Annex I: Indicators of Economic Sentiment

Graph:

Indicators of economic sentiment -European Union (s.a.)

▬

EU — EUR-11

Economic sentiment indicator

EU: Sep. 103.2
EUR-11: Sep. 103.2

EU average 1990-1999

1995 =100

106

104

102

100

98

96

94

Balances %

Industrial confidence indicator

EU: Sep. 4
EUR-11: Sep. 6

10

0

-10

-20

-30

EU average 1990-1999
EU average 1990-1999

Balances %

Construction confidence indicator

EU: Sep. -1
EUR-11: Sep. -1

10

0

-10

-20

-30

-40

-50

-60

EU average 1990-1999

Average
89/98

Balances %

Consumer confidence indicator

EU: Sep. -3
EUR-11: Sep. -3

0

-10

-20

-30

EU average 1990-1999

Balances %

Retail trade confidence indicator

EU: Sep. -1
EUR-11: Sep. -1

10

5

0

-5

-10

-15

-20

-25

EU average 1990-1999

85

86

87

88

89

90

91

92

93

94

95

96

97

98

99

00

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ANNEX II: List of Institutes Participating in the Programme

A

B

D

INDUSTRY +
INVESTMENT

WIFO
Österreichisches Institut
für Wirtschaftsforschung
Arsenal, Objekt 20
A-Wien 3

BNB
Banque Nationale de
Belgique
bd. de Berlaimont 5
B-1000 Bruxelles

IFO
Institut für
Wirtschaftsforschung
Poschingerstrasse 5
D-81679 München

CONSTRUCTION

SERVICES

RETAIL TRADE

CONSUMERS

WIFO

WIFO

WIFO

Fessel + GFK
Gesellschaft m.b.H.
Hainburger Strasse 33
A-1030 Wien

BNB

BNB

BNB

BNB

IFO

IFO

IFO

GFK Gmbh AG
Postfach 2854,
Nordwestring 101
D-90319 Nürnberg

INDUSTRY +
INVESTMENT

DK

E

DS
Danmarks Statistiks
Sejrøgade 11 – Postbox
2550
DK-2100 København Ø

MIE
Ministerio de Industria y
Energía
Estudios y Promoción
Industrial
Paseo de la Castellana 160
E- 28071 Madrid

FIN

CFIE

Confederation of Finnish
Industry & Employers
Eteläranta 10
FIN-00130 Helsinki

CONSTRUCTION

DS

MIE

SERVICES

GFK Danmark
Sylows Allé 1
DK-2000 Frederiksberg

INTERGALLUP
Princesa 47, 6°
E-28008 Madrid

RETAIL TRADE

GFK Danmark

INTERGALLUP

CONSUMERS

DS

INTERGALLUP

CFIE

CFIE

FEDERATION OF
FINNISH COMMERCE
& TRADE
Mannerheimintie 76A
FIN-00251 Helsinki

STATISTICS FINLAND
Työpajakatu 13
FIN-00580 Helsink

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F

GR

IRL

INDUSTRY +
INVESTMENT

INSEE
Institut National de la
Statistique et des Etudes
Economiques
18, boulevard A. Pinard
F-75675 Paris Cedex 14

FEIR/IOBE
Foundation of Economic
& Industrial Research
11, Tsami Karatasou
GR-11742 Athens

ESRI
Economic & Social
Research Institute
4, Burlington Road
IRL-Dublin 4

CONSTRUCTION

SERVICES

RETAIL TRADE

CONSUMERS

INSEE

INSEE

INSEE

INSEE

FEIR

FEIR

FEIR

PAN MAIL
Poseidonos 1-2
GR-175 61 Paleo Faliro,
Athens

ESRI

ESRI

ESRI

ESRI

IT

L

NL

INDUSTRY +
INVESTMENT

ISAE
Istituto di Studi e Analisi
Economica
Piazza dell'Indipendenza 4
I-00185 Roma

STATEC
Service Central de la
Statistique et des Etudes
Economiques
19-21 boulevard Royal
L-Luxembourg

CBS
Centraal Bureau voor de
Statistiek
Prinses Beatrixlaan 428
NL-Voorburg

CONSTRUCTION

ISAE

STATEC

SERVICES

ISAE

EIB
Economisch Instituut voor
de Bouwnijverheid
De Cuserstraat 89
NL-1081 CN Amsterdam

NIPO
Grote Bickersstraat 74
PO Box 247
NL-1013 KS Amsterdam
NL-1000 AE Amsterdam

RETAIL TRADE

CONSUMERS

ISAE

ISAE

STATEC

NIPO

CBS

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P

S

UK

INDUSTRY +
INVESTMENT

CONSTRUCTION

INE
Instituto Nacional de
Estatística
Av. Antonio José de
Almeida
P-1078 Lisboa Codex

AECOPS
Associação de empresas
de construção e obras
públicas do sul
Rua Duque de Palmela 20
P-1250 Lisboa

NIER
Konjunkturinstitutet,
National Institut of
Economic Research
Kungsgatan 12-14; Box
3116
S-103 62 Stockholm

NIER

SERVICES

INE

NIER

RETAIL TRADE

CONSUMERS

INE

INE

NIER

NIER

CBI
Confederation of British
Industry
Centre Point
103 New Oxford street
UK-London WC1A 1DU

CFR
Construction Forecasting
& Research
140 Minories
UK-London EC 3N 1NT

GFK Great Britain
Limited
10 Fitzroy Square
UK-London W1P 5AH

CBI

GFK Great Britain
Limited

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