Basic data of the statistics
Producer price index for services depicts inflation from the enterprise's point of view. Producer price indices belong to short term business statistics that describe the short-term development in various factors and areas of economy.
The producer price index for services describes the price development of services provided by enterprises to other enterprises and the public sector (Business to Business, BtoB), to households (Business to Consumers, BtoC) and to all end users (Business to All, BtoAll).
The population of the producer price index for services includes all enterprises operating in Finland that provide services belonging to the main sections H-S (excl. K and O) of CPA 2015 classification.
The producer price index for services is compiled on product basis, so the main industry of the enterprises producing products and services is irrelevant. If a service enterprise also produces goods, its goods production is excluded from the scope of the description of the producer price index for services. On the other hand, an enterprise that mainly produces industrial goods may also produce other services than industrial services, in which case for these services, the enterprise belongs to the scope of the description of the producer price index for services.
Statistical unit is KAU, i.e. kind-of-activity unit.
Unit of measure
The producer price index for services is published as index point figures. In addition, percentage changes based on the index figures are published.
The base period of the producer price index for services is year 2015 (2015=100).
The reference period in the producer price index for services is quarter. In some cases, the collected prices may refer to the first, second or third month of the quarter. Monthly index point figures are also published at the same time with the quarterly published indices. The index is published on the 24th day of the month following the statistical reference quarter or on the first working day following it.
The geographical reference area is the whole country.
The producer price Index for services covers the following sections of the CPA 2015 product classification:
- H Transportation and storage services
- I Accomodation and food services
- J Information and communication services
- L Real estate services
- M Professional, scientific and technical services
- N Administrative and support services
- P Education services
- Q Human health and social work services
- R Arts, entertainment and recreation services
- S Other services
Some of the indices are also published at 2-digit, 3-digit or 4-digit levels.
Time series for the new indices 2015=100 are available starting from the index data for January 2015. The series for old indices 2010=100 and 2005=100 are produced for the time being. Monthly index point figures on the producer price index for services are also available starting from January 2017.
Frequency of dissemination
The index is published quarterly at the Statistics Finland's website. The producer price index for services is not revised.
An index is a ratio describing the relative change in a variable (e.g. price, volume or value) compared to a certain base period (e.g. one year). The index point figure for each point in time tells what percentage the given examined variable is of its respective value or volume at the base point in time. The mean of the index point figures for the base period is 100.
The producer price indices for services describe developments in the prices of services enterprises provide for other enterprises and for general government (BtoB), households (BtoC) and all end users (BtoAll).
Accuracy, reliability and timeliness
There are several possible sources of bias in the producer price index for services. These sources of bias include:
- sampling error
- deficient product and enterprise frameworks
- quality changes in service products included in price collection
- substitution bias
The producer price indices for services are published on the 24th day of the month following the statistical reference quarter or on the first working day following it.
The data are published on the days indicated in the release calendar.
The point figures of the producer price index for services are published at the 4-digit level and at higher aggregate levels of the CPA product classification. However, the data are published only at a level from which the development of the prices of an individual enterprise cannot be deduced.
Data revision - practice
The producer price index for services is not revised.
The calculation of producer price indices is based on a sample. Sampling error is always associated with sampling. In the calculation solution, the randomness caused by sampling is reduced by the fact that the statistics is based on a panel design: data has been collected repeatedly from the same respondents over a longer period. This procedure ensures that the price change estimates produced by the index are very precise in a sampling technical respect.
1. Substitution bias
- Producer price indices use the Laspeyres index formula. Scientific literature on indices often refers to the substitution bias that Laspeyres’ index formula may create. The direction of the bias depends on the target of measurement. In the case of the producer price indices, substitution bias may arise because (when maximising their profits) enterprises react to changes in relative prices by changing their production volumes. For example, if the price of light fuel oil rises relative to petrol, an enterprise engaged in the oil industry can produce more light fuel oil. In such a case, an index calculated with the Laspeyres’ formula underestimates price development from the enterprises’ viewpoint. The significance of the substitution bias depends on the scale at which individual enterprises are able to redirect their production when relative prices change.
2. Bias caused by new products
- Producer price indices may contain bias arising from the entry of new products or services on the market. When speaking of new products reference is often made to electrotechnical and electrical products or digital services whose production and sales can grow quite rapidly. The structural change is also fast in the service industry and new services are developed constantly. If the change is vigorous, the index may not describe sufficiently accurately the average development in the prices of the commodities produced in the economy.
3. Bias caused by quality change
- The objective of producer price indices is to describe pure price development, which is why changes in the quality or characteristics of products must be taken into consideration in the index calculation. The problem of quality change is usually encountered either when a data supplier reports that a product included in the collection is no longer produced, imported or exported, or that changes have been made to an existing product. Changes in quality may cause error in the index as the defining of a pure price change can be difficult and, conversely, the proportion of a price change that is due to changed quality is difficult to estimate and eliminate from calculations. If, as a product changes, we assume that the entire price change is due to a change in the characteristics of the product, we may disregard genuine changes in price, whereby the index incorrectly does not change at all for the product in question. If, then again, we assume that the entire price change is due to a genuine change in price, we may disregard changed product characteristics and the index changes too much.
The producer price indices for services are product-based statistics, that is, the main industry of an enterprise manufacturing, exporting or importing a product is irrelevant. The principle of statistics compilation is also economic ownership, that is, exports and imports of a product are not determined by physical movement of products across borders, but by economic ownership and its change. The data from which the samples and weight structures of the statistics are formed do not necessarily take these factors fully into account, which may cause both over-coverage and under-coverage to the sample.
The monthly non-response rate ranges from five to ten per cent in producer price indices.
Comparability - geographical
European definitions according to the short-term business statistics regulation are used in the production of the statistics, so the data of the statistics are internationally comparable and cover the whole of Finland.
Comparability - over time
The time series of producer prices for services are mainly comparable over time.
The base year of the index is 2015. Starting from 2015, the classification used in the releases is the CPA product classification instead of the previously used Standard Industrial Classification. The indices of base years 2010=100 and 2005=100 continue to be published. The indices of base years 2010=100 and 2005=100 are calculated forward by chaining with the index of the latest base year, so starting from 2018 they develop in the same way as the base year 2015=100 index.
In connection with the adoption of the base year 2015, the calculation method of indices was also revised. From 2019 onwards, the producer price index for services is an annual chain index. In practice, the shift to the chain-linked index method means that the weight structure of the producer price index for services is updated every year. The new weight structure takes effect starting from the index for the first quarter of each year. In addition to the weight structure, product categories and the enterprise sample can also be updated annually. The base year of the index remains unchanged (2015=100). The changes improve the quality of the index, because with their help, changes in production, exports and imports can be taken into account faster.
The chaining coefficients of the overall indices of old base years are available in the Handbook for users
Index weight structures have been updated in 2022
The weight structures are formed using the latest available National Accounts data. The latest data from the supply and use tables of the National Accounts concerned the year 2019. Additional adjustments for weights were made separately for industries that were affected the most by the coronavirus pandemic. These industries included water transports, air transports, accommodation services, food services, and travel agency and tour operator services. In addition to the weight structure, product categories and the enterprise sample were also updated.
The weight tables can be found in the documentation of the statistics.
Coherence - cross domain
The price indices concerning commodities compiled by Statistics Finland can be described as a system where the aim is to measure the development of prices at different stages of production and distribution. Producer price indices for agricultural products, manufactured products and services describe the price development at the early stage of price formation as products leave their producers or enter the country. The price index for wholesale goods would locate in the second stage of distribution. Statistics Finland does not compile a price index for wholesale goods. Wholesale and retail trade margins come under the scope of description of producer price indices for services. In the classification of products, they mainly belong to categories 46 Wholesale trade, except of motor vehicles and motorcycles and 47 Retail trade (excl. motor vehicles and motorcycles); wholesale and retail trade of motor vehicles and the revision is differentiated into category 45. Statistics Finland does not compile price indices for trade margins.
Development in the prices of consumption goods and services at the end use stage is measured by the Consumer Price Index. For the time being price indices are not produced for wholesale goods or trade margins.
Coherence - sub-annual and annual statistics
The monthly, quarterly and annual data on the producer price index for services are compiled in the same way so that they are fully congruent.
Coherence -national accounts
The producer price index for services is used as a deflator in national accounts. National accounts supply and use tables are used in the compilation of the weight structure of the producer price index for services.
Coherence - internal
The producer price indices for manufactured products and services measure development of the prices of products and services produced by enterprises. So, producer price indices depict inflation from the viewpoint of enterprises. Producer price indices belong to short term business statistics that describe the short-term development in various factors and areas of economy. Industrial producer price indices are published monthly. Producer price indices for services are published quarterly.
Five different indices are produced under the producer price indices for manufacturing: producer price index for manufactured products, export price index, import price index, basic price index for domestic supply, and basic price index for domestic supply, including taxes (formerly wholesale price index). The producer price index for services, in turn, describes the price development 9 of services provided by enterprises to other enterprises and the public sector (Business to Business, BtoB), to households (Business to Consumers, BtoC) and to all end users (Business to All, BtoAll). All the above-mentioned indices measure price development slightly differently from each other because the price concepts used, and the industries covered vary by index.
The producer price indices for manufactured products and services are compiled with the same methods.
Source data and data collections
The producer price index for services is based on a sample. The data used in the calculation of the index are collected with a separate data collection from the enterprises included in the sample. The sampling frame for the producer price index for services is Statistics Finland's Business Register and business services statistics. Sampling methods may vary between different industries. Probability proportional to size (PPS) and judicious sampling or a combination of these have been used as the main sampling methods. Services, in which price development the index is monitored, have been selected in cooperation with the enterprises supplying data.
The price data used in the calculation of the producer price index for services are mainly collected from enterprises. The data are collected with the help of an online inquiry and email inquiries. In addition to data collected directly from enterprises, the index point figures and price data of the consumer price index are utilised.
In planning the web inquiry, attention has been paid to user friendliness in order to reduce the response burden. Non-response is followed monthly.
Frequency of data collection
As a rule, prices are collected monthly or quarterly depending on the service product. Case-specifically, prices can also be collected less often.
Cost and burden
The response burden was last measured in autumn 2018. In the monthly data collection of producer price indices for manufactured products and services, the median for the response time is 15 minutes per response round per respondent. The average sample size per collection is 915 respondents and around 11,000 responses are given annually.
The producer price index for services is a so-called annual chain index. In practice, this means, for example, that the weight structure of the indices is updated annually, even though the base year remains the same for five years.
The overall index of the producer price index for services describes average development in the prices of the product categories covered by the index. The individual products whose prices are monitored, or variants, reported by an enterprise do not have their own weights but the enterprise-specific CPA product category indices, or micro indices, are calculated as the geometric average of the price ratios (=current price/price at comparison period) of the products belonging to that category. The micro indices are aggregated into an overall index and to the higher levels of the CPA product classification according to Laspeyres' index formula with a weighting coefficient corresponding to each product category and enterprise. In other words, changes in the price ratios of individual products have different-sized effects on the overall index.
The price data of the producer price index for services are studied in more detail if
- The monthly or annual change in price is significant
- The characteristics of the service product have changed
- The price has remained unchanged for an exceptionally long time.
If necessary, the enterprises providing the data are contacted to obtain additional information.
Documentation on methodology
Methodological description for the producer price index for services (2015=100) is available in the statistics' Handbook for users
Principles and outlines
Contact organisation unit
Legal acts and other agreements
The compilation of statistics is guided by the Statistics Act. The Statistics Act contains provisions on collection of data, processing of data and the obligation to provide data. Besides the Statistics Act, the Data Protection Act and the Act on the Openness of Government Activities are applied to processing of data when producing statistics.
Statistics Finland compiles statistics in line with the EU’s regulations applicable to statistics, which steer the statistical agencies of all EU Member States.
Producer price indices for services comply with the following regulations:
- Regulation (EU) 2019/2152 of the European Parliament and of the Council on European business statistics
- Commission Implementing Regulation (EU) 2020/1197
Further information: Statistical legislation
Confidentiality - policy
The data protection of data collected for statistical purposes is guaranteed in accordance with the requirements of the Statistics Act (280/2004), the Act on the Openness of Government Activities (621/1999), the EU's General Data Protection Regulation (EU) 2016/679 and the Data Protection Act (1050/2018). The data materials are protected at all stages of processing with the necessary physical and technical solutions. Statistics Finland has compiled detailed directions and instructions for confidential processing of the data. Employees have access only to the data essential for their duties. The premises where unit-level data are processed are not accessible to outsiders. Members of the personnel have signed a pledge of secrecy upon entering the service. Violation of data protection is punishable.
Further information: Data protection | Statistics Finland (stat.fi)
Confidentiality - data treatment
The confidentiality of the information, prices, is taken into account when publishing the statistics: no information on individual enterprise can be deducted from the results. Such results are flagged as confidential when sent to Eurostat.
Statistics Finland publishes new statistical data at 8 am on weekdays in its web service. The release times of statistics are given in advance in the release calendar available in the web service. The data are public after they have been updated in the web service.
Further information: Publication principles for statistics at Statistics Finland
The published producer price indices for services are delivered to Eurostat quarterly. Eurostat publishes indices on their website.
Accessibility and clarity
Statistical data are published as database tables in the StatFin database. The database is the primary publishing site of data, and new data are updated first there. When releasing statistical data, existing database tables can be updated with new data or completely new database tables can be published.
In addition to statistical data published in the StatFin database, a release on the key data is usually published in the web service. If the release contains data concerning several reference periods (e.g. monthly and annual data), a review bringing together these data is published in the web service. Database tables updated at the time of publication are listed both in the release and in the review. In some cases, statistical data can also be published as mere database releases in the StatFin database. No release or review is published in connection with these database releases.
Releases and database tables are published in three languages, in Finnish, Swedish and English. The language versions of releases may have more limited content than in Finnish.
Information about changes in the publication schedules of releases and database tables and about corrections are given as change releases in the web service.
Micro-level data of producer price index for services is used only for the production of the statistics. Currently only producers of the index have access to the micro-level data.
Data revision - policy
Revisions – i.e. improvements in the accuracy of statistical data already published – are a normal feature of statistical production and result in improved quality of statistics. The principle is that statistical data are based on the best available data and information concerning the statistical phenomenon. On the other hand, the revisions are communicated as transparently as possible in advance. Advance communication ensures that the users can prepare for the data revisions.
The reason why data in statistical releases become revised is often caused by the data becoming supplemented. Then the new, revised statistical figure is based on a wider information basis and describes the phenomenon more accurately than before.
Revisions of statistical data may also be caused by the calculation method used, such as annual benchmarking or updating of weight structures. Changes of base years and used classifications may also cause revisions to data.
Producer price indices are used to describe short-term inflationary pressures in different sectors of the economy. They are also used in GDP and volume calculations. Research institutes and enterprises use the indices in their reports, monitoring and forecasts. They can also be used as index clauses in agreements.
Eurostat assesses six-monthly the fulfilment of the regulation requirements of short-term business statistics. The producer price index for services belongs to short-term business statistics, and Finland's latest assessment of the fulfilment of the regulations was the maximum, 10 points.
The quality of the producer price index for services is evaluated in several different stages of the statistical process. Changes in unit-level data are examined monthly and the correctness of exceptional data is examined. Aggregate level data are also checked.
Quality management requires comprehensive guidance of activities. The quality management framework of the field of statistics is the European Statistics Code of Practice (CoP). The frameworks complement each other. The quality criteria of Official Statistics of Finland are also compatible with the European Statistics Code of Practice.
Further information: Quality management | Statistics Finland (stat.fi)
Data are released to all users at the same time. Statistical data may only be handled at Statistics Finland and information on them may be given before release only by persons involved in the production of the statistics concerned or who need the data of the statistics concerned in their own work before the data are published.
Further information: Publication principles for statistics
for statistical data.