Services producer price index for Industrial cleaning

Transcription

1 Services producer price index for Indusrial cleaning Indusry descripion for SNI group 74.7 SPPI repor no 18 Thomas Olsson Services producer price indices, Price Saisics Uni, Saisics Sweden 2007

2 Foreword Privae services producion has made up a large share of Sweden's gross domesic produc (GDP) for a long ime, bu relevan price indices were no developed o any grea exen before he year This can in par be explained hisorically; commodiies have previously made up a dominan par of he economy. Economic saisics have also been focused on commodiies. Anoher reason is he fairly complicaed naure of measuring price rends in services. As par of he process o improve economic saisics, producer price indices for services, Services producer price indices (SPPIs), were developed a few years ago. SPPIs are developed for he mos common services in indusries where eiher he Swedish Naional Accouns or he EU requires hem o be. This repor is one of a series of SPPI repors ha discuss he rend in services producer price indices in differen indusries. The aim of hese repors is boh o give a descripion of he saisics for exernal users and o provide a basis for producing new services producer price indices. I also gives a general descripion of how services producer price indices can be calculaed. Acknowledgemen Thanks o our daa providers - privae individuals, companies, auhoriies and organisaions - Saisics Sweden is able o provide reliable and up-o-dae saisics ha saisfy sociey's need for informaion. 2

3 Conens Foreword Summary Background Condiions for saisical work in he SPPI field Requiremen for price indices in he naional accouns Descripion of he indusry Srucure of he sub-indusry and saisical classificaion Key raios and facs abou he indusry Cleaning of premises Disinfecing and exerminaing aciviies Chimney sweeping Pricing mechanisms and pricing mehods Cleaning of premises Disinfecing and exerminaing aciviies Chimney sweeping Tes survey srucure Sampling procedure Daa collecion procedure Evaluaion of he es survey Tes resuls and conclusions Design of he fuure survey Sampling procedure Daa collecion procedure Pricing mehods Weighs and index calculaions...21 Saisics Sweden 3

4 1 Summary Services Producer Price Index for Indusrial Cleaning This repor discusses he developmen of a producer price index for services in he indusrial secor SNI 74.7 Indusrial Cleaning and also includes an indusry descripion. This indusry is divided ino hree sub indusries (deailed groups); Cleaning of premises (74.701), Disinfecing and exerminaing aciviies (74.702) and Chimney sweeping (74.703). Wihin Cleaning of premises he prices are largely deermined by he cos for he personnel ha carry ou he services and he pricing mechanisms are ofen ime based. A large par of he services are conraced which implies ha Conrac Pricing is a suiable pricing mehod. Wihin Disinfecing and exerminaing aciviies he prices are generally more sandardised han wihin cleaning of premises and no as labour-inensive. As many companies use price liss, hese can be used o measure he price rends. Many companies have price liss ha are cusomer specific and o use prices from hese can be considered equal o using Conrac Pricing. Oher usable pricing mehods for boh hese sub indusries are Model Pricing and Uni Value. Chimney sweeping separaes from he oher sub indusries since i mainly consiss of aciviies ha are regulaed by law. The municipaliies are responsible for he chimney sweeping and fire proecion conrol and wrie conracs wih suppliers of he services. The prices are regulaed by Chimney Sweeping Index, a cos index ha is compiled by The Swedish Associaion of Local Auhoriies and Regions. The price rend can be measured wih his index. During he probaionary year sub indusry indices are calculaed for cleaning of premises, disinfecion and exerminaing aciviies and chimney sweeping respecively. These are weighed ogeher o a oal index for he whole service group using urnover weighs. 4

5 2 Background The Swedish service indusry's value added amouns o abou 62 percen of he business secor's oal value added. Calculaed as a share of GDP, he business secor's service producion consiues abou 50 percen. For mos of he 1990s, his share was jus under 40 percen of GDP and rose gradually owards he end of he cenury. As service producion's share of GDP has grown, he need for correc volume calculaions of service producion has also increased. To calculae rends in individual indusries, value added mus be purged from inflaion. Price rends for differen producs and services mus be measured and indices calculaed before he curren prices can be convered ino fixed prices. In order o cover mos of he groups of services in Sweden's naional accouns and o fulfil inernaional requiremens, new indices for he service indusries are coninuously developed. The services producer price index (SPPI) is a producer price index for services ha aims o measure price rends in indusries ha produce business services. There are currenly SPPIs for jus over 40 percen of he business secor's services producion. The majoriy of he SPPIs produced oday have been developed since SPPIs for rens (for business premises), hoel services and domesic air ravel began o be developed during he 1990s. A join Eurosa-OECD working group was esablished in 2002 in order o develop a common mehod for European services price indices and o provide pracical help o counries in he process of developing hem. A manual wih, among oher hings, pracical descripions of SPPI for differen indusries was developed. 1. The manual refers o he exising SPPI manual for index heory and pracice 2. SPPI developmen and producion work is currenly regulaed by Council Regulaion (EC) 3. 1 Mehodological guide for developing producer price indices for services. Websie:hp:// 2 Producer Price Index Manual: Theory and pracice. Websie:hp:// /98 concerning shor erm saisics. Saisics Sweden 5

6 2.1 Condiions for saisical work in he SPPI field SPPI is a producer price index ha aims o show he average price rend in he producer chain for services supplied by domesic producers. The index figure is for one quarer and he price daa is o be an average per quarer. The measuremen should refer o ransacion prices, i.e. he prices he purchaser acually pays afer discouns. When developing a services price index for a new indusry, specific indusry-relaed price measuremen problems mus be solved. For example, i is no always obvious how o define he service. Anoher problem is ha he services supplied are ofen ailor-made for a specific cusomer and are only supplied once. This makes i difficul o find comparable services o follow over ime. These problems are some of he hings discussed in his repor for he indusry in quesion: For which services are he prices o be measured? Wha does he indusry's price formaion look like? And in wha way can we include he prices in a way ha reflecs he price rend wihou placing oo much of a burden on daa providers? 2.2 Requiremen for price indices in he naional accouns As a resul of he Sabiliy Pac in Maasrich, he EU esablished crieria for he reporing principles for Member Sae naional accouns in fixed prices. For fixed price calculaions, i is recommended ha producion and inpu consumpion be deflaed separaely using approved, qualiy-adjused price indices. This means ha he indices are only o reflec changes ha can be assigned o price changes whils changes regarding quaniy, qualiy or composiion of he produc/service should no influence he indices. As long as hese recommendaions are followed, he index will be considered an A-mehod for fixed price calculaion. All EU Member Saes have ranked heir mehods, under he supervision of Eurosa, as A, B or C mehods. As from 2006, no C- mehods may be used in Member Sae naional accouns unless 6

7 dispensaion has been graned. For a more deailed descripion, please refer o he European Sysem of Naional Accouns, ENS 1995, Chaper Descripion of he indusry 3.1 Srucure of he sub-indusry and saisical classificaion In he Swedish Sandard Indusrial Classificaion 2002 (SNI 2002) 4 he group Indusrial cleaning (SNI 74.7) belongs o he main group Oher business aciviies (SNI 74). Indusrial cleaning is divided ino hree deailed groups; Cleaning of premises (SNI ), Disinfecing and exerminaing aciviies (SNI ) and Chimney sweeping (SNI ). Table 1: Deailed groups in SNI 74.7 Indusrial cleaning SNI Descripion 74.7 Indusrial cleaning Cleaning of premises Disinfecing and exerminaing aciviies Chimney sweeping Source: SNI 2002: Swedish Sandard Indusrial Classificaion Sandard for Swedish Produc Classificaion 2002 (SPIN 2002) is a sandard linking producs o aciviies (indusries) in SNI SPIN 2002 is he Swedish equivalen of he EU's Classificaion of Producs by Aciviy (CPA). 4 Swedish Sandard Indusrial Classificaion 2002 is based on he EU recommended sandard NACE Rev.1.1. Saisics Sweden 7

8 Table 2: Deailed groups in SPIN 74.7 Indusrial cleaning SPIN 2002 CPA 2002 Cleaning of premises & Disinfecing and exerminaing aciviies & Chimney sweeping Source: SPIN 2002: srucure, SCB/MP. 3.2 Key raios and facs abou he indusry This secion is based on daa from 2005 from he Saisics Sweden Business Regiser, companies wihou revenue have been excluded. The daa abou number of employees and ne urnover only includes aciviies wihin he indusry (some companies are acive in many differen indusries). Oher facs abou he sub indusries (deailed groups) have been acquired during meeings wih rade associaions and enerprises Cleaning of premises Table 3: Srucure of he Cleaning of premises indusry. No of employees No of companies % No of employees % Ne urnover, Milions of SEK % > , , , , , , , , , , , , , , , ,5 Toal

9 In Table 3 we see ha a large number of companies (5999) are acive in he cleaning of premises indusry, and ha heir oal urnover is almos 12.8 billion SEK, which is approximaely 75 % of he urnover in SNI The majoriy of he companies (78.7 %) have 0-1 employees. This group however only makes up 1.9 % of he oal number of employees and 9.5 % of he ne urnover in he indusry. The dominan group is insead he 11 companies ha have more han 249 employees, which make up a good half of he number of employees and 41.8 % of he ne urnover. The second larges group regarding number employees and ne urnover is he companies wih 2-19 employees. Togeher he 11 larges companies and he companies wih 2-19 employees make up 68.6 % of he number of employees and 61.9 % of he urnover in he indusry. Mos companies in he indusry has regular cleaning (cleaning of offices, indusrial buildings and shops) as heir main aciviy; bu also offer oher services such as window cleaning, cleaning of carpes, floor care and spring-cleaning. There are also companies ha specialise in a cerain ype of service, parly he already menioned services bu also for example cleaning of vehicles. The indusry has developed a lo during he las 15 years as many companies have sopped cleaning heir own premises and insead have sared buying cleaning services from specialised firms. Through his he indusry has grown, cleaning is more professionally run han earlier and he prices have been pressed downwards. Many cleaning companies see hem selves as service companies, srive for a broader business aciviy and sell general soluions where hey offer a number of differen services, for example adminisraive asks. The indusry as a whole is o a large par governed by coss. The compeiion beween he companies is hard and he profi margin is usually around 2-3 %. The cusomers are very ineresed in wha coss he cleaning companies have and ofen wan hese repored. The cusomers can be divided ino public and privae purchasers where he public conracs consiue around 30 % of he marke. There are large differences beween hese wo groups of cliens; all public conracs are under he jurisdicion of he public procuremen law and hese conacs are always valid for hree years. During public procuremens here is a very srong price pressure and generally he prices seem o be lower for public han for privae cusomers. Saisics Sweden 9

10 3.2.2 Disinfecing and exerminaing aciviies Table 4: Srucure of he disinfecing and exerminaing indusry No of employees No of companies % No of employees % Ne urnover, Milions of SEK % > , , , , , , , , , , , , , , , ,4 71 1, ,7 Toal The disinfecing and exerminaing indusry makes up approximaely 20 % of he urnover in SNI In Table 4 we see ha he indusry is subsanially smaller and has a differen srucure compared o he cleaning of premises indusry. While he cleaning of premises indusry was dominaed by companies wih more han 249 employees, he disinfecing and exerminaing indusry is dominaed by companies wih 2-19 employees, boh in erms of employees (32,3 %) and urnover (34,6 %). Regarding urnover he wo companies wih more han 249 employees akes second place wih 25,3 % of he oal urnover, while he group wih employees is in second place regarding number of employees wih 23,5 % of he oal number of employees. Jus as in he cleaning of premises indusry he group wih 0-1 employees is larges regarding number of companies bu only makes up a small par of he number of employees and urnover (1,9 % and 5,7 % respecively). The disinfecing and exerminaing indusry can be divided ino hree differen branches, hese are: 10 Indusrial service Damage service Nuclear service

11 These differen markes are differen o each oher no only regarding aciviies bu also regarding for example cos srucure and frequency of performance of he services. Below follows informaion abou he differen branches. Indusrial service This is he larges of he branches. The larges cusomers are paper mills, he car indusry and oil refineries. Also he food producers are large cusomers. These aciviies are capial-inensive; means of assisance as high pressure pumps, robos and mud sucking cars are used o saniise for example buildings, venilaion channels and chimneys. Wihin his branch i is quie common ha he services are recurren. A conrac is wrien regarding, for example, a weekly saniaion of a lacquering robo in he car indusry or a daily saniaion of a slaugherhouse. Damage service This branch is abou half as big as he previous one and consiss of companies handling hings like waer damages (dehumidificaion), fire damages and saniaion of elecronics. Included here is also graffii and pes saniaion. The municipaliies are large cusomers since public premises ofen are exposed o saboage as fires and floods. The larges cusomers are hough he insurance companies, hey are he ones having o pay for he damages and hey are also ofen aking care of he purchasing of saniaion. Nuclear service Nuclear service is a special marke, parly because he number of power plans is small and parly because he aciviy is surrounded by an exensive regulaion. Because of his only a small number of companies offer his kind of service. In his branch i is common wih conracs ha run for several years. Saniaion a nuclear power plans is very seasonal and mos work is done during a limied ime of he year when he plans are shu down. In his branch here has been a developmen owards more full service conracs where he supplier ha ges he conrac akes care of all kinds of service a he plan. Saisics Sweden 11

12 3.2.3 Chimney sweeping Table 5: Srucure of he chimney sweeping indusry No of employees No of companies % No of employees % Ne urnover, Milions of SEK % >25 3 0,9 84 5,8 53 5, ,2 91 6,2 35 3, , , , , , , , , ,2 31 2,1 65 7,2 Toal As we can see in Table 5 he chimney sweeping indusry is he smalles of he hree deailed groups in SNI Wih is 903 million SEK i does no consiue more han jus over 5 % of he oal urnover. The companies are also much smaller han in he oher wo indusries, here are only hree companies wih more han 25 employees. The dominan group, boh regarding number of employees and urnover, is he companies wih 6-10 employees, closely followed by he companies wih employees. Togeher hese wo groups make up 63,2 % of he employees and 60,3 % of he urnover in he indusry. The chimney sweeping indusry is special since here are wo differen areas of aciviy wih very differen marke condiions. The firs area consiss of aciviies ha are regulaed by law and he second consiss of aciviies ha are no regulaed by law. Abou 2/3 of he chimney sweeping indusry consiss of regulaed aciviies and 1/3 unregulaed. These wo areas and heir characerisics are described below. 12

13 The firs area consiss of aciviies ha are regulaed by he Civil Proecion Ac; i includes chimney sweeping and fire proecion conrol. The law says ha he municipaliies in a fire prevenive aim are responsible for chimney sweeping and fire proecion conrol. The municipaliies ofen solve his by wriing conracs wih chimney sweeping companies. The law gives he municipaliies righ o, afer applicaion, allow he inhabians o le someone else han he operaor direced by he municipaliy o carry ou chimney sweeping on heir own propery. The larges par of he chimney sweeping is hough aken care of by he operaor(s) ha he municipaliies have conraced. The second area consiss of procured work. This area is oally differen o he firs one since i is no regulaed, which means ha i is much more compeiive. Aciviies included here are for example venilaion service and inspecion of fireplaces and chimneys. Even if his is a free marke i is sill, according o he indusry, dominaed by he chimney sweepers. One reason for his is ha some aciviies used o be regulaed; up o 2004 cleaning of a socalled imm-channel (a channel in a chimney where he ho air flows) was regulaed by law and was aken care of by he chimney sweepers. When he chimney sweepers were in place i was usual ha hey also cleaned oher channels. Afer he deregulaion many people have coninued o buy hese services from he chimney sweepers. 3.3 Pricing mechanisms and pricing mehods This secion is based on informaion obained during meeings wih rade associaions and companies Cleaning of premises As menioned above he cleaning of premises indusry is very much governed by coss. This means ha he price of a service o large exen is deermined by wha i coss o produce i. As he larges Saisics Sweden 13

14 par of he cos is made up of labour cos (normally over 80 %), he price rend in he indusry is o a very large exen deermined by he developmen of wages. Since he labour cos (he wage) is ime based, he cos calculaions almos always ake heir saring poin in how long ime i akes o carry ou he service. The company hen uses an hourly rae for he service ha shall be carried ou and muliplies i wih he esimaed number of hours needed. This hourly rae varies depending on how qualified saff ha is required for he service. For ordinary cleaning inexperienced saff wih minimum wage is usually used, while as more qualified services require saff wih special auhoriies. The more qualified saff s higher wages imply a higher price. Coninuous cleaning is almos always conraced. For privae cusomers new conracs are almos always wrien for wo o hree years and are during his ime linked o some index, usually Sädindex 5. When he commimen period is over he conrac convers o a running conrac wih a erm of noice, and he prices can be renegoiaed. There is hough a difference beween privae and public buyers; all public conracs are under he jurisdicion of he public procuremen law and hese conacs are always valid for hree years. As menioned earlier here is a very srong price pressure during public procuremens and generally he prices seem o be lower for public cusomers. There exis generally wo kinds of conracs for coninuous cleaning: 1. Insrucion based conracs radiional conracs where he cusomer orders for example a cerain number of hours or a cerain number of square meres o be cleaned frequenly. 2. Resul based/funcional conracs conracs where he cusomer orders a cerain qualiy and does no specify numbers of hours, frequency ec. The qualiy is regulaed by a Nordic sandard called INSTA 800 where every level is precisely defined wih exac limis for he amoun of dir and rubbish ha is allowed on a saed area afer he cleaning is carried ou. These wo ypes of conracs can seem very differen, bu regarding pricing mechanisms here is in pracise no large difference i is 5 Sädindex (cleaning index) is a facor price index ha is produced by Saisics Sweden in cooperaion wih Almega Service Employers Associaion. I measures changes in coss for cleaning aciviies. 14

15 always he used ime ha deermines he price. Insrucion based conracs are mos common and also in hese some kind of minimum qualiy requiremen is saed (for example ha he floors shall be clean and he bins empied). In he funcional conracs he amoun of ime ha should be spen a he clien is no saed, bu also in hese cases he cleaning companies ake heir saring poin in esimaed ime consumpion when hey se he price. Oher aciviies han coninuous cleaning, like spring-cleaning and floor care, are ofen sub ordered. Also in hese cases he esimaed ime consumpion deermines he price and i is unusual wih sandardised prices. Window cleaning, and o some exen carpe cleaning, is on he oher hand more sandardised and especially wihin window cleaning i is common wih priceliss ha saes price per window or square meer. During meeings wih he companies in he indusry i was discussed in wha way he price rend could be measured, and i was clear ha differen companies had differen possibiliies o repor prices. Since he coninuous cleaning almos always is conraced a suiable pricing mehod pricing mehod for his aciviy is Conrac Pricing 6. This mehod implies ha a number of conracs are surveyed every period and can be used when a repeaed service is performed by he same producer for he same cusomer. Since he conracs ofen are unique and all price deermining characerisics in a conrac no can be expeced o be repeaed in anoher conrac, i is hard o keep he qualiy consan and a qualiy adjusmen is ofen required when a conrac is replaced. Since i is hard o compare conracs wih each oher each conrac can also be seen as a unique service. This means ha also Model Pricing is a suiable pricing mehod. This mehod implies ha he responden saes a price for a model service ; a sandard service whose specificaion is held consan. The model can eiher be oally ficive or based on daa from a service ha has been sold in he recen pas, for example a conrac from he previous period. For every new period he responden is hen asked o re-esimae all price deermining 6 See Mehodological guide for developing producer price indices for services from Join OECD/Eurosa ask force for a descripion of differen pricing mehods Saisics Sweden 15

16 componens. A hird possible mehod is Uni Value, a mehod where he services are divided ino homogeneous sub-ses for which value and quaniy daa are available. A uni price is hen calculaed by dividing he oupu values wih he corresponding quaniies. Since he homogeneiy requiremen is difficul o mee, even if a very deailed sub-division of oupu is used, his mehod is no preferable and should only be used in excepional cases. For services where he prices are more sandardised (foremos window cleaning) price liss can be used Disinfecing and exerminaing aciviies The pricing mechanisms wihin he Disinfecing and exerminaing indusry is generally more sandardised han in he cleaning of premises indusry, alhough i also here is common wih negoiaions. Jus as in he cleaning of premises indusry he disinfecing companies say ha he price pressure is harder for public cusomers. Since he hree markes ha were described in are differen regarding cos srucure and frequency of services hey are also differen regarding pricing mechanisms. Wihin boh indusrial service and damage service i is common wih price liss where hourly raes for labour and hourly or daily raes for machines are saed. The labour cos does here no make up such a large par of he oal cos as in cleaning of premises, hese aciviies are more capial-inensive. There ofen exiss a sandard price lis ha is used for small jobs for new cusomers. Frequen cusomers usually have heir own, cusomer specific, price liss ha are updaed annually. I also happens ha conracs are wrien wih frequen cusomers. In hese conracs he price is usually negoiaed and he price is expressed per square meer or working momen. When making he price calculaion he company akes ino accoun how much saff and which means of assisance ha are required and how large he ime consumpion is expeced o be. Wihin nuclear service long erm conracs ha run for several years are common. The price is hen usually fixed or is escalaed wih some index. As menioned above here has been a developmen owards more full-service conracs where he supplier ha ges he 16

17 conrac for a nuclear power plan handles all service. The par of his service ha is included in SNI is radioacive cleaning and for his service here exiss an hourly rae ha is saed in he conrac. Since many companies in he disinfecing and exerminaing indusry use price liss one can from hese choose a number of wih high urnover and measure he price rend for hese. Since all companies have declared ha he cusomer specific price liss follow he same price rend as he sandard price lis one alernaive is o only use he sandard price lis. Anoher alernaive is o use a number of cusomer specific liss. To use cusomer specific price liss is equivalen o a form of Conrac Pricing. In cases where conracs are wrien for recurring services i is possible o measure he price rend by surveying a number of conracs. Since unique services also are raher common also Model Pricing is a suiable mehod Chimney sweeping Since he wo areas of aciviy wihin he chimney sweeping indusry ha were described in are very differen regarding marke condiions hey are also very differen regarding pricing mechanisms. For aciviies regulaed by he Civil Proecion Ac (chimney sweeping and fire proecion conrol) he prices are formally se by he municipaliies, bu in pracice also he chimney sweepers have grea influence on he price since hey keep ogeher and do no sign conracs ha hey no accep. The prices are regulaed by The Chimney Sweeping Index, a cos index ha is produced by The Swedish Associaion of Local Auhoriies and Regions and consiss of 80 % labour cos and 20 % CPI, he index is updaed annually. Around 90 % of he municipaliies use The Chimney Sweeping Index ourigh in heir conracs and mos of he oher municipaliies use he index as a guideline when renegoiaing conracs. Wihin he non-regulaed aciviies he pricing mechanisms are oally differen. Here i works more or less like in he disinfecing and exerminaing indusry. The price rend for he regulaed aciviies can be measured wih The Chimney Sweeping Index. The non-regulaed aciviies make Saisics Sweden 17

18 up only one hird of he chimney sweeping indusry, which makes up slighly more han five percen of he urnover in SNI This means ha he non-regulaed aciviies make up less han wo percen of he urnover in SNI Because of his i was decided, in consulaion wih Naional Accouns, ha The Chimney Sweeping Index ges o represen he price rend for all chimney sweeping aciviies. 4 Tes survey srucure 4.1 Sampling procedure The sample consised of 11 companies, which were drawn from he Business Regiser. Six of hese were acive wihin SNI and five wihin SNI Before he es survey was conduced he companies were visied and during hese visis pricing mehods and which service he companies considered mos represenaive for heir business were discussed. The companies were asked o choose 1-10 services for which hey, excep price and a horough descripion of he service, should sae cusomer, volume, ime in he day, region and oher price deermining facors. 4.2 Daa collecion procedure For nine of he companies informaion and quesionnaires were sen ou via pos. The companies were asked o reurn he quesionnaires in an enclosed pre-addressed envelope. One company preferred o receive he quesionnaire in elecronic form via and one company did no wan any quesionnaire a all, insead hey sen an Excel-file via Evaluaion of he es survey Of he eleven companies nine responded. Generally he res survey gave posiive answers. All responding companies repored figures ha were possible o use for index calculaion. Some companies had 18

19 misundersood he quesionnaire and expressed he price in anoher way han inended. The repored prices were expressed in a number of differen ways: price per day, price per hour, price per square meer, price per deal, price per sea, price per cabin and price per square meer-year. 4.5 Tes resuls and conclusions The es quesionnaire had consciously been made general o be able o be used by companies wih very differen aciviies. Since a number of companies filled in he quesionnaire in anoher way han inended, i seems like he quesionnaire was unclear and maybe no sufficienly deailed. Since i is desirable ha all companies in he survey can use he same quesionnaire also he final quesionnaire will be general. To reduce he risk of misundersandings all respondens will, in connecion wih he firs price collecion, ge a deailed descripion of differen ways o repor prices. 5 Design of he fuure survey 5.1 Sampling procedure A sample of respondens has been drawn from he Business Regiser wih he help of a PPS sample of companies wihin SNI and As measure of size urnover wihin he indusrial secor was used. In boh samples an inenional under-coverage was employed wih he help of cu-off poins. In SNI en employees was used as cu-off poin and in SNI five employees. This means ha companies wih fewer han en (five) employees no are included in he sampling frame since hey are no inended o be surveyed. The reason for his is mainly ha he reporing burden would be large for hese companies since hey ofen have small resources for handling adminisraive work and coss. From SNI companies were drawn ha ogeher make up 55,4 % of Saisics Sweden 19

20 he urnover in he indusry. From SNI companies were drawn ha ogeher make up 45,2 % of he urnover in he indusry. 5.2 Daa collecion procedure Via pos he respondens will receive passwords and user-id s for reporing prices on he SPPI web page. A he firs price collecion he respondens will hough insead receive a prined quesionnaire wih pleny of space o describe he services characerisics. The reason for his is ha i has been hard o creae a web quesionnaire ha is a he same ime sufficienly general o fi differen ypes of pricing mehods and easy o use. Wih help of he filled-in paper quesionnaires saff from Saisics Sweden will fill in he web quesionnaires. In he following price collecions only passwords and user-id s will be sen ou, unless he company has specifically demanded a paper quesionnaire. 5.3 Pricing mehods A he firs price collecion (he base quarer) he companies ge o choose beween one and six services ha hey consider represenaive for heir aciviy wihin he indusry. A he nex quarer prices are repored for he same services and a price relaive is calculaed for each service. If he exac same service has been carried ou a differen prices during he quarer he average price is requesed. In cases where Conrac Pricing is used i is imporan ha he sample of conracs is represenaive regarding poin of ime in he conrac period and lengh of he conrac, his o ensure a correc proporion of new or renegoiaed in each period. When conracs are replaced i is imporan o consider qualiy changes. If he responden repors lis prices i has o be seled ha hese are really represenaive. When using Model pricing i is imporan o make sure ha all facors ha affec he price are specified in he model and ha he respondens consider changes in labour coss, overhead coss and marke condiions. In cases where Uni Value is used he services have o be carefully specified and divided ino homogenous groups. 20

21 5.4 Weighs and index calculaions Producer Price Indices for Services are produced quarerly. Sep 1 is o calculae an index for each company; his is done by calculaing a geomeric mean of he price relaives for he seleced services: I m 0, a = i= 1 Where a i p p a, i 0 a, i 1/ m I 0,a = index wih base ime 0 for company a a ime p, = price of service i, company a, a ime 0 p a,i = price for service i, company a, a base ime m = number of services wihin company a Sep 2 is o geomerically weigh he company indices ogeher o an indusry index (deail group index). The larges companies ge weighs based on heir urnover and he smaller companies share he remaining weigh. The indusry index is given by: I 0, A = Where n ( I 0, a ) a= 1 wa I 0,A = index wih base ime 0 for indusry A a ime I 0,a = index wih base ime 0 for company a a ime w a = weigh for company a n = number of companies in he survey for he indusry n w a a= 1 = 1 Saisics Sweden 21

22 Sep 3 is o arihmeically weigh he indusry indices ogeher o a oal index for he whole service group. The indusries ge weighs based on heir urnover. The oal index is given by: I 0, T = Where N ( I 0, A ) i= 1 w A I 0,T = oal index wih base ime 0 a ime I 0,A = indusry index wih base ime 0 for indusry A a ime w A = weigh for indusry A N = number of indusries in he service group n w A a= 1 = 1 22