LAMAS October 2016 Agenda Item 3.1 Labour Cost Indices state of play Hubertus Vreeswijk Daniel Iscru

Labour Cost Index – State of play Summary: LCI TRANSMISSIONS Indices Weights - Annual quality reports QUALITY ISSUES TIMETABLE FOR 2017

I. LCI TRANSMISSIONS - Indices Member States transmitted LCI files using the SDMX-ML format. The timeliness in 2016 was generally satisfactory: 26 Member States and Norway delivered data on time. Greece and Croatia transmitted with some delays. In 2016Q2, 6 countries: BE, BG, IE, NL, NO and PT delivered at t+65 days or earlier. The other countries delivered on time except EL that did not transmit.

I. LCI TRANSMISSIONS - Weights All Member States except IE and HR transmitted the weights referring to year 2015 In the case of IE and HR, the latest weights transmitted correspond to year 2013. IE and HR are reminded to transmit 2015 and 2014 weights in SDMX format and to provide updates every year so that Eurostat can replicate the calculations made nationally.

I. LCI TRANSMISSIONS – Quality Reports State of play as of 22 September 2016: Quality reports for 18 Member States were submitted and validated LU and UK have not submitted their Quality reports yet and are invited to do so by the extended deadline of 1 November 2016 DK, ES, EL, IE, IS, LV, HU, PL and SK, are invited to finalise and submit revised Quality reports by 1 November 2016.

II. QUALITY ISSUES When inconsistencies are detected between the Q/Q-4 growth rate of the total LCI versus the wage / non-wage components Detailed feedback is provided to the countries while asking for explanations and corrections This may delay the compilation of European aggregates. It sometimes forces Eurostat to hide LCI components in the news release

II. QUALITY ISSUES For the latest News Release, calendar adjusted data had to be removed from the News Release tables for the following countries: • Greece data for the last 5 quarters • Czech Republic - aggregates B_S for Q3 2015 and aggregates B_N, B_S and B_E for 2016Q2. • Cyprus - aggregates O_S for 2016Q2. • Croatia - aggregates B_S for Q4 2015 and aggregates B_E, B_S and NACE section F for 2016Q2. • Slovakia - aggregates B_N, B_S and O_S for 2016Q2.

II. QUALITY ISSUES - LCI data for Greece - Mission organised back in May 2016 between ESTAT and ELSTAT to identify and possibly remedy the causes of inconsistencies - Eurostat provided: templates for aggregation of totals from components taking into account the specificities of ELSTAT’s methodology (i.e. ‘quarterly overlap’). Recommendations as regards the filtering out of individual records whose hourly labour costs show implausible movements in the quarter on quarter changes. - ELSTAT has started implementing these recommendations with a view to solve the quality issues spotted by the next transmission of December 2016 (reference quarter 2016Q3) possibly.

II. QUALITY ISSUES – CA and CSA data Calendar adjusted data Eurostat detected quality problems in the calendar adjusted data of: CZ, EE, HU, LU and SK. Eurostat recommends adopting indirect calendar adjustment meaning that (unchained) LCI for totals are derived from the (unchained) LCI of the wage and non-wage components. This ensures consistency between totals versus components. Seasonally adjusted data Eurostat also detected inconsistencies in the seasonally adjusted data of the following countries: BE, EE, HU, LU, SK. Eurostat recommends adopting indirect seasonal adjustment.

III. TIMETABLE FOR 2017

IV. CONCLUSIONS Timeliness is generally satisfactory: the most timely countries are able to deliver LCI around t+65 days which, if generalized to all countries, would make the LCI release more attractive given the competition of related products such as unit labour costs published by National Accounts. In terms of inconsistencies, the main problems detected concerned the calendar adjusted data of EE, CZ, HU and HR for which Eurostat was obliged to hide some components in the News Releases for reference quarter 2015Q4 or 2016Q1.

IV. CONCLUSIONS LAMAS delegates are invited to take note: - Of the state of play as regards transmissions of LCI data. EL and HR are urged to resume the timely transmission of LCI data - Of the state of play as regards transmissions of weights. HR and IE are urged to transmit the weights for years 2014 and 2015 no later than 09/12/2016; - Of the state of play as regards transmissions of quality reports and of the extended deadline of 1 November 2016 to transmit them; - Of the inconsistencies found in the calendar adjusted data of: CZ, EE, HU, LU and SK that are invited to move to indirect calendar adjustment; - Of the inconsistencies found in seasonally adjusted data of: BE, CZ, EE, HU, LU and SK that are invited to move to indirect seasonal adjustment - Of the LCI release calendar for 2017

Thank you for your attention!