1. LAMAS October 2017
Agenda Item 3.2 Labour Cost Indices state of play Daniel Iscru Hubertus Vreeswijk

2. Labour Cost Index – State of play
Outline:
LCI TRANSMISSIONS
Indices
Weights
Annual quality reports
QUALITY
BACK SERIES AND FLAGS
DERIVATION OF TOTALS
TIMETABLE FOR 2018
CONCLUSIONS

3. I. LCI TRANSMISSIONS - Indices
Member States transmitted LCI files using the SDMX-ML format.
The timeliness in 2017 was generally satisfactory:
26 Member States and Norway delivered data on time.
Latvia (for 2017Q1) and Estonia (for 2017Q2) transmitted with some delays.
In 2017Q2, 5 countries: BE, BG, HU, NL and PT delivered at t+63 days or earlier.

4. I. LCI TRANSMISSIONS - Weights
All Member States except HR transmitted the weights referring to year 2016
In the case of HR, the latest weights transmitted correspond to year
HR is reminded to transmit 2016 weights in SDMX format and to provide yearly updates in time so that Eurostat can replicate the calculations made nationally.

5. I. LCI TRANSMISSIONS – Quality Reports
Country
Transmitted on AT
22 Aug 2017 BE
07 Aug 2017 BG
21 Aug 2017 CY
31 Aug 2017 CZ
01 Aug 2017 DE DK
07 Sep 2017 EE
01 Sep 2017
EL* ES
21 July 2017 FI FR HR - HU
03 Sep 2017 IE IT LT
29 Aug 2017 LU
20 Sep 2017 LV MT NL
25 Aug 2017 PL PT RO SE SI
30 Aug 2017 SK
23 Aug 2017 TR
08 Aug 2017 UK
11 Apr 2017 NO
State of play as of September 2017:
Quality reports for 26 Member States were received and validation is in progress.
HR is invited to finalise and submit revised Quality report promptly.

6. II. QUALITY Calendar adjusted data
Quality problems in the calendar adjusted data of CZ, HR and HU.
Seasonally adjusted data
Inconsistencies in the seasonally adjusted data of the following countries: CZ, HR, HU and SK. Eurostat recommends adopting indirect seasonal adjustment so that (unchained) SA series for totals are derived from the (unchained) SA series of the wage and non-wage components.

7. II. QUALITY Consistency with National accounts figures
Member States are asked to compare the growth rate of the labour cost index with that of employees’ hourly compensation found in the national accounts although a perfect match is not always possible.
Statistical treatments and sources may differ while collecting data on hours worked is particularly difficult for both the labour cost index and the national accounts.
When the differences are above a given relative threshold, this may indicate quality issues in either LCI or NA figures.

8. II. QUALITY Consistency with National accounts figures
Absolute average discrepancy between the growth rate of the labour cost index and that of the hourly compensation of employees over 10 quarters analysed.
Variations of more than two percentage points on an annual basis were considered to warrant further analysis. This was the case for Bulgaria, Denmark, Croatia, Greece, Latvia, Poland and Romania.

9. II. QUALITY

10. III. BACK SERIES AND FLAGS
'P' flags for provisional data
LCI series are flagged 'p' in Eurobase for data that are 4 to 17 years old (Spain, France, Latvia, Hungary, Malta, Romania, Slovenia and Finland).
'p' flags are temporary and should be removed after the 1st/2nd revision of data.
'C' flags for confidential data
LCI transmission is a legal obligation for certain sections of NACE.
Expected that no mandatory variables are flagged confidential.

12. IV – DERIVATION OF TOTALS
Frequent inconsistencies were detected in LCI growth rate against Wage and Non-wage components provided by CZ, HR, HU and periodically for FI, EE, SK.
Eurostat proposes to substitute Totals received with the Totals obtained from the wages / non-wages components, for cases where the discrepancy >= 0.1 percentage point after rounding.
This would ensure correct, harmonised and consistent LCI totals for all data (NSA, CA and SA), but also prevent the need for blanking mandatory variables included in the LCI regulation.

13. V. TIMETABLE FOR 2018 – Labour Cost Index

14. V. TIMETABLE FOR 2018 – Labour Cost Levels
Publication date: 6 April 2018
Deadline for transmitting national estimates (for the countries concerned): 23 March 2018
In 2017, national estimates were transmitted by: AT, CZ, DK, ES, FR, HU, NL and RO

15. VI. CONCLUSIONS
- Timeliness was generally satisfactory. The most timely countries are even able to deliver LCI around t+63 days. - Main inconsistencies detected concerned the calendar adjusted data of CZ, HR and HU.

16. VI. CONCLUSIONS LAMAS working group is invited:
- To take note of the state of play of LCI data, weights and Quality reports transmission. HR is asked to resume timely transmission of weights;
-To take note of the proposal to derive LCI totals from wages and non-wage components in all cases where sizeable discrepancies have been spotted in the quality report;
-To comment on discrepancies spotted between the growth rate of the LCI and that of the hourly compensation of employees in NA.
- Of the LCI release calendar for 2017

17. VI. CONCLUSIONS LAMAS working group is invited:
To reconsider the management of 'p' flags by Spain, France, Latvia, Hungary, Malta, Romania, Slovenia and Finland
To take note of the 2018 release calendar proposed for LCI and Labour Cost Level publications
To confirm the list of countries (AT, CZ, DK, ES, FR, HU, NL and RO) that will transmit annual labour cost level estimates
- To check the list of contact persons provided in annex 3 of the document

18. Thank you for your attention!