The building of Europe took a major leap upon the introduction of the euro on 1 January 1999. The creation of an integrated monetary union and the coordination of economic and budgetary policies managed by the Member States have required the European Commission and the European Central Bank to be provided with statistical indicators appropriate for governing the Economic and Monetary Union. In the case of France, the European impetus has been beneficial to short-term business statistics, which are already at an advanced stage of development. With further developments planned in early 2021, the trend will continue in future years.

The European framework defining the production of short-term business statistics was laid down in May 2018, establishing harmonised short-term statistics on supply and demand, factors of production (labour) and producer prices. The framework has gradually evolved since the 2000s following an action plan for the continuation of work in the field of statistics necessary for the proper functioning of Economic and Monetary Union (EMU). The European Union has therefore focused on developing a business cycle dashboard of the Economic and Monetary Union founded on the Principal European Economic Indicators (PEEIs) introduced in 2002 (Box 1), half of which are based on business statistics. The time limits for making many indicators available have thus been reduced in line with American standards and, in the field of business statistics, the coverage of factors of production and producer prices has been extended to services, while the coverage of import prices has been extended to include industrial products.

Short-term indicators provide vital information for short-term economic monitoring and for identifying turning points in the economic cycle at an early stage, alongside or in combination with other major macroeconomic indicators. They are used for compiling quarterly national accounts based on the various components of gross domestic product. Producer and import price indices are leading signals of inflation (consumer prices), and are also widely used for the volume/price split of many economic quantities (industrial production indices, turnover volume indices, annual and quarterly national accounts, etc.). As such, all of these short-term indicators are of particular interest to the European Central Bank (ECB) and the Eurogroup in monitoring the euro area economy, as well as to international bodies such as the International Monetary Fund (IMF) and the Organisation for Economic Cooperation and Development (OECD).

The framework for the production of short-term Community statistics on the business cycle was established by the Council Regulation of 19 May 1998 concerning short-term statistics.

The latter regulation began the process of harmonising short-term statistics with the aim of meeting European information needs in terms of economic convergence. Harmonisation has been further facilitated by the publication of various methodological manuals. From the outset, the regulation has also sought to simplify procedures for businesses, including by promoting new technologies for data collection and statistical production and by using existing administrative sources, so as not to create a disproportionate burden compared to the results that users of the statistics were entitled to expect.

The regulation specifically defines those activities for which statistics are to be compiled, the types of statistical units to be used, the list of variables, their form (raw data, seasonally and/or working-day adjusted data), their reference period, their level of detail, data transmission deadlines, etc.

The European Regulation on short-term statistics remains in force today, covering industry, construction, retail trade and services. The statistics requested are multiple and initially concerned:

These statistics are to be used not in terms of level at any one time so much as in terms of trends, the aim being to measure short-term changes in activity, factors of production and producer prices. The reference periods for these variables are generally monthly or even quarterly. Depending on their nature, Member States are required to transmit the variables to Eurostat more or less between 35 and 90 calendar days from the end of the reference period.

Some of these short-term indicators are among the main European economic indicators, hence the pressure from users to reduce the time taken to produce them.

In June 2000, the Economic and Financial Affairs Council (ECOFIN) invited the European Commission, in close cooperation with the ECB, to establish an action plan for EMU (Ouvrir dans un nouvel ongletECOFIN, 2001). The objective of the plan was to identify areas where urgent progress was needed. In August 2000, the ECB set out “Requirements in the Field of General Economic Statistics” (Ouvrir dans un nouvel ongletEuropean Central Bank, 2000). The EMU Action Plan on Statistical Requirements was immediately endorsed by the ECOFIN Council in September 2000.

The European Regulation on short-term statistics subsequently underwent several amendments (Table 1).

The most notable amendments include:

In 2011, the European Union adopted a more comprehensive approach covering all business statistics. Since then, it has worked on a Framework Regulation Integrating Business Statistics (FRIBS), recently adopted by the Council and European Parliament. The regulation is due to enter into force on 1 January 2021 and will provide a common legal framework for the development, production and dissemination of European business statistics (both short-term and structural) and for the European system of business statistics registers and the Euro Groups Register.

This is not simply a consolidation of existing legal acts in the different fields of business statistics but a project aimed at increasing the coherence of the statistics produced in these different fields while continuing their development.

For cyclical indicators, the main thrust of the new regulation is to rebalance expectations between industry and construction on the one hand and trade and services on the other in order to reflect the increasingly important share taken by the service sector in European economies in recent decades. The statistical unit will now be the kind-of-activity unit only (subdivision of an enterprise), whereas the 1998 Short-Term Statistics Regulation considered two different statistical units – either the kind-of-activity unit or the enterprise (Box 2). In addition, the new regulation recommends annual re-weighting of price and volume indicators, together with the use of chaining methods (Box 3), without this becoming a formal obligation.

The main expectations for short-term statistics are threefold: to develop a monthly services production index, to extend the monthly volume index to wholesale trade and repair of motor vehicles and motorcycles and to extend the scope and coverage of the quarterly producer price index to services. In addition, construction indicators will be restructured and methodological innovations introduced (Table 2).

In the 1998 Regulation, a volume of sales index is not requested directly for retail trade, but is obtained indirectly by reporting the turnover index by the corresponding deflator of sales, both of which are required for retail trade. The new Framework Regulation will extend the volume of sales index to all trade (by adding trade and repair of motor vehicles and motorcycles and wholesale trade). The new full indicator should also be available two months after the reference month. The volume of sales index can also be obtained by deflating the elementary retail trade turnover indices using appropriate price indices. Since trade producer price indices do not exist to date, Eurostat allows national statistical institutes to make the most of the information available at the national level for the construction of trade deflators (producer prices, consumer prices, etc.). These elementary indices are then aggregated using turnover weighting, ultimately allowing for a volume of sales index to be calculated.

Generally speaking, with regard to the various short-term indicators, the coverage of services will be improved under the new Framework Regulation. It will include, in particular, real estate activities, rental and leasing activities and services to buildings and landscape activities for turnover, number of persons employed, hours worked and gross wages and salaries.

A monthly services production index will be introduced under the Framework Regulation. This index may be obtained by deflating the elementary service turnover indices by elementary indices of producer prices in the corresponding services. Since service producer price indices are generally produced quarterly and within two months, statistical techniques must be used to produce them monthly and, depending on the month, estimate them to use them as deflators. The corresponding elementary indices are then combined to obtain a production index in volume terms, based on value added weights as recommended by Eurostat for this type of indicator (Box 4). This new indicator is to be produced two months after the reference month. It is the counterpart to the current producer indices for industry and construction.

For service producer price indices, the coverage extensions are even more important since the obligations laid down in the 1998 Regulation only cover around half of the field of services. As the availability of information has improved considerably compared to the time when service producer price indices were introduced, with the new Framework Regulation coming into force, service producer price indices will be required for all service sectors for which turnover data will be collected.

Another important innovation is that transaction monitoring will now be extended to all transactions. The 1998 Regulation requires producer price indices in services for transactions between trading partners (“B2B”) but not for transactions with other partners (services sold to households, exports of services, etc. – i.e. “B2Others”). The new Framework Regulation fills this gap and now provides for a full breakdown into customer categories (“B2All”,”B2B”, “B2Others”) for service producer price indices, the aim being to use them as deflators of turnover indices (also in “B2All”) in the calculation of the services production index.

In the construction sector, the new Framework Regulation provides for a reversal of the logic between production costs and producer prices. The regulation currently in force lists as the variable of interest the construction cost approximated by a producer price. In the new Framework Regulation, the variable of interest will be the production price, considered to be a better measure of inflationary pressures, which can be approximated by the cost of production. Another innovation for this sector is the harmonisation of classifications. The classification of construction products (CC), specific to this sector, will thus be replaced, as the case may be, by the classification of economic activities (NACE) or products by activity (CPA).

In France, INSEE and several Ministerial Statistical Departments have contributed to the Regulation on short-term business indicators.

They rely on a proven production system that has adapted to and anticipated European developments in the area of short-term statistics and which already produced many of the short-term indicators required under the 1998 Regulation. Developments at the national level, whether before or after the introduction of the Regulation on short-term indicators, have mainly concerned the price collection system. As concerns producer prices, the system is relatively old, being the heir to the “wholesale price indices” calculated in France since 1911 and, subsequently, the “industrial sales price indices”. France first introduced monthly industrial producer price indices in 1989 and anticipated the provisions of the 1998 Regulation relating to the requirement to provide monthly industrial producer price indices at the European level by nearly ten years. Since 2001, the system for observing sales prices in the domestic market has been supplemented by industrial producer price indices for non-domestic markets. In 2004, import price indices for the purchase of industrial products were created (also on a monthly basis) following a further amendment to the Regulation. 1992 saw the introduction of service producer price monitoring, resulting in the publication in 1994 of the first service producer price indices restricted solely to trade between enterprises (“B2B” market). The collection and dissemination of these indices has been quarterly from the outset.

The other short-term indicators did not call for or require any specific changes in the national collection or production system, at least until the early 2010s.

The French Official Statistical System has taken steps to comply as soon as possible with the new provisions on short-term statistics set out in FRIBS, which will apply from 1 January 2021. Begun in 2013 (Ouvrir dans un nouvel ongletGallais, 2013), the work to adapt to the draft Framework Regulation will be completed by the end of 2019. On that date, France will be in compliance even before FRIBS enters into force, at least as concerns short-term indicators. As regards producer prices in services, the annual update of weights associated with chaining techniques had already been effective since the publication of the 2010 base indices in 2013, as was the case for producer prices in industry and import prices of industrial products. In 2013, work was also initiated to gradually extend the coverage of production price indices in services to all new sectors requested and to take into account transactions with all partners, by complete category of customers, by distinguishing between transactions between trading partners, transactions with households and even transactions with non-domestic markets (Ouvrir dans un nouvel ongletGallais, 2014). These extensions of the coverage of service producer prices will be completed in 2019.

The change in base (transition to the 2015 base) in 2018 made it possible to continue these methodological innovations, this time by extending the use of annually chained indices to industrial production indices, retropolated back to 1990 in the case of the latter, and to production indices in construction. Weighting is now five-yearly (in 2010 and 2015) and no longer constant throughout the period of interest for turnover and derived volume indicators, indices of services production and sales volume indices in trade.

Since the end of March 2017, the monthly turnover indices have been published by major sector of activity and in volume in the service sector, with a new monthly volume index for trade sales and a new monthly production index for services (Box 4), both of which are required under the new Framework Regulation. All of these indices are now calculated based on the exhaustiveness of monthly VAT returns and take into account business demographics on an ongoing basis.

As regards the producer price index of new residential buildings, INSEE already has such an indicator, produced on the basis of data collected by the Statistical Data and Studies Service (in French, Service de la donnée et des études statistiques, or SDES).

Finally, the SDES, the contracting authority for the monthly surveys of activity in construction and public works, in conjunction with the French Building Federation (FFB) and the National Federation of Public Works (FNTP), the contracting authorities for these surveys, carried out the work to develop the two collection systems to ensure that production indices in construction could be calculated according to the NACE classification and published when the Framework Regulation came into force.

With the guidelines of the new Framework Regulation having been defined in 2013, in particular as regards short-term statistics, new needs were set out in 2018 at the European level.

The objectives are twofold: on the one hand, in response to the 2008 U.S. housing crisis, to provide the European Union with monitoring of the various housing markets by making available new indicators on commercial real estate; on the other hand, to provide monthly monitoring of total market production, covering industry, trade and services, which may eventually require production and price indices in trade to be made available.

The focus on commercial real estate is the result of numerous initiatives, including from the International Monetary Fund and the Financial Stability Board in 2015, the European Systemic Risk Board in 2016, the ECOFIN Council and the European Statistical Forum in 2017 and Eurostat, the ECB and the European Statistical System Committee in 2018. These measures come in the wake of the 2008 U.S. real estate crisis, which turned into a global banking and financial crisis. Expectations in this area concern both prices (covered by a European Framework Regulation other than FRIBS) and activity indicators, which fall within the scope of business cycle indicators. Reflecting international and ECB recommendations, Eurostat plans to initiate work to develop the production of indicators on construction starts, works completion and vacancy rates. The subject of commercial real estate was first discussed at the European meetings on short-term indicators held in 2018. The SDES will be responsible for monitoring this area, for both prices and volume indices of commercial real estate.

The subject of a monthly indicator of total market production was first discussed at the European meetings on short-term indicators held in 2018. Eurostat presented a standard methodology for developing a monthly index of total market production, as the aggregation of production indices in industry, construction and services, and a re-weighting of the volume of sales index in trade, taking value added and not turnover as a weighting variable. In its conclusions, Eurostat indicated that it was keen to work further with Member States on developing the monthly index of total market output and invited Member States to proceed on the basis of this standard methodology in the first instance before assessing the feasibility of a “real” index of production (and price, as the case may be) in trade based on trade margins. INSEE is currently laying the groundwork with a view to developing a robust methodology for this monthly indicator of total market production.