1. Task Force on Seasonal Adjustment of Quarterly National Accounts
Second Meeting
Item 4 Case Study Seasonal & Calendar Patterns – First Results
Henning Ahnert Frankfurt, April 2007

2. 2
Background
TF mandate: “examine further, for selected components of ESA Table 1, the underlying causes of the significant differences in the seasonal and working day correction factors currently used”.
Questionnaire sent to TF: 13 replies received (thank you!), five replies pending (BE, GR, MT, SE, UK)
Summary will be part of final Task Force Report

3. Structure of presentation3
Structure of presentation
I: Value added NACE C-E, G-I, J-K
II: Household and Government consumption
III: Value added NACE F and GFCF
IV: Summary

4. Task Force discussion What are common features?4
Task Force discussion
What are common features?
What causes differences?
What are economic reasons?
What are statistical reasons?
What might affect comparability of QNA raw data, and in particular adjusted QNA ?

5. I. Value added – Seasonal factors5
I. Value added – Seasonal factors
Value added NACEC-E
Value added
NACE G-I
NACE J-K Q1 Q2 Q3 Q4
EU25
100.7
100.1
96.3
103.1
96.8
100.4
101.2
101.6
98.9
99.7
99.0
102.4 CZ
101.7
103.4
93.8
92.8
107.6
103.0
98.7
99.2
100.6
94.3
105.3 EE
99.3
100.2
96.2
104.2
94.4
103.8
108.4
101.5
98.3 HU
95.6
99.4
98.6
106.2
87.3
101.4
102.6
93.7
100.5
106.9 SK
103.9
102.2
97.2
97.0
92.4
112.6
108.8
85.9
106.5
98.5
95.2 FI
95.9
99.8
101.8
94.9
100.9
97.4
97.3
104.7 SE
88.5
105.1
95.1
102.5
96.7
105.7
95.3
102.7

6. I. Value added - Sources 6 CZ EE HU SE SK FI NACE C-E
Quarterly enterprise surveys for output and intermediate consumption
Monthly Production indices; Industry turnover
Production at current prices deflated
Surveys (q) and administrative data (m/q)
Main source is deflated turnover
(production index for NACE E)
NACE G-I
See before
Retail index (m); car registrations (m);nights spent * average costs;
Turnover and transport statistics
Deflated turnover
NACE J-K
Profit and loss account for NACE J (q) ; Production; dwelling new orders
Profit and loss account for NACE J (q) ;
Statistics on credit institutions for NACE J
Turnover statistics and rents for NACE K

7. I. Value added – Seasonal effects7
I. Value added – Seasonal effects CZ EE HU SE SK FI
NACE C-E
Peak in Q2 due to lower intermediate consumption to output ratio;
Trough in Q3 due to NACE E
Main impact from strong peaks of NACE E in Q4/Q1
Trough in Q3 due to summer vacation
Q4 peak due to Christmas
NACE E in Q1 (heating season) reparations (= intermediate consumption) in Q3)
NACE C very low in Q1 and not compensated by peak of NACE E o
NACE G-I
Peak in Q 2 due to lower intermediate consumption to output ratio, and vice versa in Q4
Q4 Christmas consumption;
Q3 tourism expenditure
Retail sales before Christmas, counter reaction in Q1;
Lower income implies higher Christmas peak;
Lower income implies only one holiday season per year in summer
Special seasonal factors due to NACE G due to [fiscal changes?]
Retail sales high before Christmas and low in Q1;
Q3 (Q1) tourism peak (trough)
NACE J-K
Trough in Q3 due to high ratio of intermediate consumption
Trough in J in Q4 due to high costs
Similar pattern as for G-I due to similar factors, mainly in NACE 74 (other business activities)
NACE J peak in Q1 (compensation); trough in Q4 (insurance payments)

8. I. Value added – Seasonal effects8
I. Value added – Seasonal effects
Industrial Production NACE E (energy) - seasonal factors
(period averages, )* CZ EE HU SK SE FI
Quarter 1
113.3
121.8
122.3
114.1
116.3
Quarter 2
93.2
83.0
86.3
90.0
92.2
92.0
Quarter 3
89.3
81.6
79.3
85.6
83.9
84.1
Quarter 4
103.9
113.8
112.2
111.1
109.2
109.9
Value added by NACE sections,
(current prices, percentages of whole economy) C D E F G H I J K CZ
1.5
25.9
4.2
6.6
12.4
2.0
10.3
3.3
13.8 EE
1.0
16.8
3.4
7.3
15.2
1.6
12.1
3.8
18.8 HU
0.2
22.2
2.9
4.8
10.9
7.6
4.6
17.5 SK
0.6
23.4
4.9
6.8
14.4
1.3
10.4
14.3 SE
0.3
19.7
3.0
4.5
10.7
8.0
19.8 FI
23.1
2.1
5.9
2.3
18.5

9. I. Value added – Seasonal effects9
I. Value added – Seasonal effects
Czech Republic - Ratios intermediate consumption to gross output
Averages
NACE C,D,E
NACE G, H, I
NACE J,K Q1
0.723
0.570
0.644 Q2
0.728
0.577
0.651 Q3
0.734
0.579
0.655 Q4
0.754
0.608
0.675

10. I. Value added – Seasonal effects10
I. Value added – Seasonal effects
Slovakia and Estonia - Average seasonal factors of value added (NACE sections) C D E G H I J K
Slovakia (average ) Q1
98.15
97.95
142.72
85.70
85.64
100.01
130.82
99.89 Q2
101.02
103.79
90.82
124.06
111.63
99.99
94.01
100.02 Q3
100.10
78.19
116.29
108.97
97.79 Q4
109.28
98.10
90.63
74.08
93.31
99.91
73.61
100.09
Estonia (average )
101.2
94.0
124.7
91.7
76.7
97.1
99.6
99.8
96.0
105.5
84.3
103.7
111.2
105.6
102.8
102.2
106.2
99.4
75.0
101.7
119.7
103.3
103.4
96.5
96.4
101.0
116.0
102.5
92.1
94.1
94.5
101.4

11. I. Value added – Calendar regressors11
I. Value added – Calendar regressors CZ EE HU SE SK FI
NACE C-E
1 regressor,
no leap year correction,
CZ calendar
No calendar adjustment yet
1 working day regressor,
HU calendar
Between 0-7 regressors in DEMETRA
2 regressors (weekdays, weekends)
NACE G-I
Only for retail trade: 1 working day regressor
Leap year for retail trade
NACE J-K
no adjustment for NACE J,
No significant calendar effects
No calendar adjustment

12. I. Value added – Calendar effects12
I. Value added – Calendar effects CZ EE HU SE SK FI
NACE C-E
C: 0.03%
D: 0.22%
E: -0.50%
Country-specific public cause differences to other countries
No calendar adjustment yet
n.a.
C-E: 1.57%
D: 1.22%
G-I: 1.13%
G: 1.56%
NACE G-I
G: -0.12%
H: -0.54%
I: 0.04%
Effects only in retail trade
n.a
NACE J-K
K: -0.22%
No significant effects
Example: Calendar factors,
averages
NACE C,D,E
NACE G, H, I
NACE J,K Q1
100.42
99.64
99.29 Q2
100.08
99.94
99.97 Q3
100.38
99.76
99.61 Q4
99.63
100.30
100.66

13. Household consumption Government consumption13
II. Consumption – Seasonal factors
Household consumption
Government consumption Q1 Q2 Q3 Q4
EU25
97.2
99.4
100.3
103.1
99.2
100.2
98.1
102.6 BE
98.8
101.6
98.9
100.0 DE
96.7
99.5
103.8
98.3
98.2
104.6 ES
87.8
101.3
99.8
110.8
98.5
104.5 FR
99.1
98.4
102.7
100.1
100.9
97.8
101.2 IT
103.5
98.6
101.9 NL
100.6
100.5
99.7
96.1
107.7
94.3
101.8 GB
96.6
103.6
100.7

14. Government Consumption14
II. Consumption – Sources BE DE ES FR IT NL GB
Private Consumption
Monthly retail, wholesale, hotels and restaurants turnover
Q-crafts reports
Car registration
Energy reports
Tobacco tax reports
Enterprise tax data
Monthly food consumption
Retail sales
Passenger transport
Other services indicators
Q-HBS main source.
For food, tobacco and alcohol also retail trade;
Turnover statistics for transport, communication
Car registrations
Overnight stays in hotels
M retail trade and commercial/personal services. Energy; travel expenditure. Other services, e.g. medical, transport,communicat.
Statistics on housing and population. Turnover of supermarkets and sales of vehicles.
Government Consumption
Q reports of government and social security statistics
National Audit Office provides all data
Q data from government, refers to compensation, social transfers and intermediate consumption
Q-labour input, compensation and social benefits in kind

15. Government Consumption15
II. Consumption – Seasonal effects BE DE ES FR IT NL GB
Private Consumption
Retail trade Christmas and post-Christmas effect
Two extra wages in June and Dec, e.g. on vehicle purchase; Christmas and post Christmas effect;
High restaurant consumption in Q3, but compensated by low food consumption;
Spaniards spend holidays in Spain.
Q1: trough due to low tourism and other
Q3: trough due to low energy and durable consumption, despite peak in tourism
Q4: peak due to Christmas and energy consumption
Peak/trough in Q3/Q4 due to hotels/tourism;
Clothing peaks in Q3/Q1 due to seasonal sales
Higher share for hotels and restaurants may explain differences to other countries
At aggregate level the seasonal pattern of the components largely cancels out
Government Consumption
Bonus Q4&Q3;
Funds spent at end-of-year;
Anticipated purchases;
Effects decrease
Two extra wages in June and Dec
Due to half-annual allocation of budget Q2 and Q4 are strong
13th month salary in December;
Other components less affected;
No extra salary in June
Holiday allowance in May, end-of year bonus;
End-of year expenditures

16. II. Consumption – Seasonal effects16
II. Consumption – Seasonal effects
Retail Turnover - seasonal factors
(current prices, period averages )* BE DE ES FR IT NL GB Q1
96.8
94.1
95.7
94.4
90.6
91.7
92.8 Q2
101.4
98.1
98.2
98.6
99.7
102.7
97.0 Q3
98.9
98.4
96.6 Q4
106.7
111.1
107.2
108.5
118.0
107.0
113.7

17. II. Consumption – Seasonal effects17
II. Consumption – Seasonal effects
Italy:

18. II. Consumption – Seasonal effects18
II. Consumption – Seasonal effects
Domestic consumption expenditure by COICOP (current prices, percentages of total) 01 02 03 04 05 06 07 08 09 10 11 12 BE
13.4
3.8
5.4
23.1
4.3
14.9
2.3
9.3
0.5
5.1
12.4 DE
11.4
3.6
24.3
7.0
4.6
13.6
2.8
9.5
0.7
5.3
12.0 ES
14.1
2.9
5.5
16.2
5.2
3.5
11.6
2.6
9.1
1.5
18.9
8.9 FR
13.8
3.1
4.8
24.5
5.8
14.7
9.2
6.1
11.1 IT
14.8
2.7
7.8
20.7
7.7
3.2
7.1
0.8
9.7 NL
10.6
3.0
22.2
6.2
4.5
10.1
15.5 GB
3.9
18.7
6.4
1.8
15.0
12.7
1.4
Source: Eurostat, ECB calculations. Data refer to 2005 except UK (2004)

19. II. Consumption – Seasonal effects19
II. Consumption – Seasonal effects

20. II. Consumption – Seasonal effects20
II. Consumption – Seasonal effects

21. Government Consumption21
II. Consumption – Calendar regressors BE DE ES FR IT NL GB
Private Consumption
Detailed by sector and for m data;
DE working days except in retail trade (Sundays, late night shopping, Easter, public holidays, winter/summer sales) and accommodation (public holidays)
Adjusted are m/q source data
Trading days, Easter and leap year for m series
Separate regressors for seven days,
FR calendar
Use of groups, leads, lags as appropriate
Adj. whenever not statistically rejected and sensible
Jul, Aug & Dec tested separately
Each indicator adjusted for working days, Easter effect and leap year
No calendar adjustment due to short series; Research 07H2
Government Consumption
No calendar effect/adjustment
Trading days, Easter, Leap year ?
No calendar adjustment

22. Government Consumption22
II. Consumption – Calendar effects BE DE ES FR IT NL GB
Private Consumption
Coefficients provided;
National public holidays and regional holidays may explain differences to other countries
8 fixed public holidays compensated with leave on following Monday if falling on Sunday.
Remaining 4 holidays have seasonal character.
Proxy: One additional working day: growth
One additional working day:
-0.17 growth .
Indicators q, therefore less siginificant than for production side.
Changes in shop opening hours - six regressor model and time-variant regression
Government Consumption
No calendar adjustment
No calendar effect despite adjustment

23. II. Consumption – Calendar effects23
II. Consumption – Calendar effects
Calendar factors for private consumption in Germany, Italy and Spain
04Q1
04Q2
04Q3
04Q4
05Q1
05Q2
05Q3
05Q4
06Q1
06Q2
06Q3
06Q4 DE
100.4
100.2
100.1
100.3
99.6
100.6
100.0
99.9
99.7 IT
99.8 ES
99.1
98.8
98.6
101.0
98.9
97.0

24. Gross Fixed Captial Formation Value added Construction24
III. Construction & GFCF – Seasonal factors
Gross Fixed Captial Formation
Value added Construction Q1 Q2 Q3 Q4
EU25
93.2
101.0
98.1
107.5
88.8
101.9
103.2
105.6 LT
75.9
100.3
108.5
113.5
64.2
100.6
123.6
110.5 MT
93.5
104.7
97.9
104.3
n.a.
n.a AT
80.1
102.1
106.8
109.2
65.6
104.4
115.5
114.1 PT

25. Value added in construction (NACE F) Gross fixed capital formation25
III. Construction & GFCF – Sources GR LT MT AT PT
Value added in construction (NACE F)
Construction work;
lagged building permits, employment and investment;
Q business survey
Industrial production
Cement and steel turnover
Gross fixed capital formation
Production of capital goods, export/imports
Construction investment
Production of capital goods, export/import
Cement turnover
Productin and import of machinery and metal products

26. Value added in construction (NACE F) Gross fixed capital formation26
III. Construction & GFCF – Seasonal effects GR LT MT AT PT
Value added in construction (NACE F)
Climatic conditions (very low factor in Q1)
Very low seasonal factor in Q1 due to climatic conditions; counter effect in other quarters
Trough in Q4/winter (Oct-Jan) and Q3/Summer holidays;
No unadjusted QNA
Gross fixed capital formation
High share of construction output and its climatic dependency; weight of machinery and equipment increasing
Climatic conditions e.g. for construction
See above
Shares of construction across countries (%) GR LT MT AT PT
Value added NACE F in total value added
7.6
4.8
6.3
Construction investment in total investment
53.5
60.7
55.3
56.4
50.8

27. Value added in construction (NACE F) Gross fixed capital formation27
III. Construction & GFCF – Calendar regressors GR LT MT AT PT
Value added in construction (NACE F)
QNA directly adjusted with two regressors: Working day and leap year
QNA directly adjusted;
regression on Mo-Fri & Sa-Su as implemented in DEMETRA
No calendar adjusted QNA;
Compilation to start in late 07/08
Gross fixed capital formation
See before

28. Value added in construction (NACE F) Gross fixed capital formation28
III. Construction & GFCF – Calendar effects GR LT MT AT PT
Value added in construction (NACE F)
No significant calendar effects;
Public holidays falling on weekend are compensated by extra leave on following Monday
For GDP as a whole: 2 extra working days add 0.1% to GDP;
Tourism sector reduces effect on GDP.
Some underestimation due to NA construction possible (when activity estimates derived from employee data)
Not applicable due to the unavailability of calendar adjusted QNA data
Gross fixed capital formation
No significant calendar effects
Public holidays falling on weekend are compensated
See before

29. 29
Summary (I)
Common determinants of seasonal components across countries, e.g.:
Weather/climatic conditions (for NACE E, construction and tourism)
Bonus payments/extra salaries (for HH and Gov consumption) (and some industries?)
End-of year expenditures (for HH and Gov consumption, GFCF)
But of course different magnitudes across countries

30. Summary (II) Compositional effects, e.g.:30
Summary (II)
Compositional effects, e.g.:
Share of tourism sector varies
Share of construction in whole economy and in GFCF rather similar
Income difference effect, e.g. lower income imply higher seasonal effects for consumption
Aggregation effect, e.g. differences in components may or may not cancel out

31. 31
Summary (III)
Common determinants for calendar component as well, but magnitude and sign differ a lot
Working days, weekend days, public holidays, leap year
Compositional differences and
Leave compensation for weekend holidays

32. Summary (IV) Statistical effects:32
Summary (IV)
Statistical effects:
M/Q source data determine seasonal and calendar component
Some extreme differences, e.g. “true” value added indicators vs. material purchase proxies used to compile QNA value added
But even two equally suitable sources might show different S and C components (e.g. retail trade vs. HBS?)

33. Summary (V) Statistical effects:33
Summary (V)
Statistical effects:
M vs. Q frequeny matters for calendar adjustment. Many sources still quarterly
Different definitions of calendar component
National calendars not always used
No calendar adjustment in some countries
Resource and software constraints
Further work on recommendations for calendar adjustment warranted (new ESA TP requires calendar adjustment !)