1. Presentation by Eurostat
Item 5 Revised classifications in Short-term business statistics (STS): Backcasting and linking
Presentation by Eurostat
OECD Short-term Economic Statistics Working Party (STESWP) - Paris, June 2008
16-June-2008

2. Short-term business statistics (STS)…
…produce many of the key short-term indicators for economic analysis and the development of monetary and economic policy:
most on a monthly basis, some quarterly
industry, construction, retail trade and repair, other services with activities defined through NACE (currently Rev. 1.1)
indicators include: index of industrial production, producer price indices, production in construction, turnover and employment in retail trade and other services, etc.
16-June-2008
OECD STESWP – Paris, June 2008

3. Simultaneous implementation of NACE Rev. 2 and base year 2005…
…biggest challenge facing STS in 2008
all EU Member States, Norway, Switzerland… and Eurostat are presently working on this subject
activities include…
methodological research and planning
implementation
exchange on practical experience
Important milestones / key dates:
Sep-08: provision of new STS 2005 weights
Jan-09: starting date for the production of STS
Feb/Mar-09: provision of new monthly STS data
May/Jun-09: provision of new quarterly STS data
…additional delay for smaller MS for most variables
NACE Rev. 2 corresponding to ISIC ver. 4
16-June-2008
OECD STESWP – Paris, June 2008

4. Backcasting requirements
Availability of long historical time series is crucial…
for seasonal adjustment
for business cycle analysis
Characteristics of the data to be provided:
same form, same reference period, same level of detail as “current” (Jan-09 / 1Q2009…) STS data
first reference period 2000 for most of the data
some countries will go back beyond 2000
16-June-2008
OECD STESWP – Paris, June 2008

5. Methodological approach to backcasting
“Standard” approach to backcasting appears to be…
micro approach for a limited number of (recent) observation periods
dual-coded data for individual enterprises
but micro data often no longer accessible for past years
combined with
macro approach for past years
one set of conversion coefficients, usually for new base year 2005
less expensive, easier, quicker
“Standard” time series will consist of two segments:
micro segment (continuously growing): most recent observation periods
macro segment: historical data of past observation periods
16-June-2008
OECD STESWP – Paris, June 2008

6. Methodological approach (cont.)
Link between micro and macro segments of a time series:
level shifts may need to be smoothed out
methodologies exist to distribute shift over several periods
different seasonality patterns
more difficult to tackle
first solutions (in 2009) can only be provisional
with each new observation period, the micro segment will gradually gain importance
this will very likely make revisions of the whole time series necessary at a later stage
Question: any experiences to share / any recommendation?
16-June-2008
OECD STESWP – Paris, June 2008

7. Linking in a different context: Backcasting index series over several base years
General STS recommendation:
In the standard case of a rebasing every five years, the indices relative to a new weighting system have to be calculated retrospectively for several years, so that the point where the two series are spliced is between the two base years. For example when the new base year 2000 was introduced, the index with the new system of weights should have been calculated back to January As a result, the indices for the reference periods from 1993 to 1997 have 1995 weights; from 1998 to 2002 have 2000 weights and so on.
STS methodological guidelines (2006), p. 24.
For the calculation of new aggregate indices in NACE Rev. 2 (ISIC ver. 4):
re-estimate the weight matrix at each base year…
on the basis of the NACE 1.1 (ISIC ver. 3) weights for that year
and the 2005 conversion matrix
Question: any experiences to share / any recommendation?
16-June-2008
OECD STESWP – Paris, June 2008

8. Next steps Eurostat workshop “backcasting” on 13 – 14 October 2008
will look at these and other questions
will offer a forum for the exchange of practical experience
STS WG in December 2008
final review of preparations
January & February 2009
final preparatory work and testing the transmission environment
16-June-2008
OECD STESWP – Paris, June 2008

9. Comments or questions ? Thank you!
Do you have any suggestions / recommendations regarding:
linking time series segments when a classification changes:
level shifts
different seasonal patterns
linking different base years: re-estimation of previous base years’ weights according to a new classification
Thank you!
16-June-2008
OECD STESWP – Paris, June 2008