External trade in services

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External trade in services

• Per Øivind Grindalen
• Division for External Trade (22)
• Statistics Norway

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External trade in services

• Background / History of the statistics (1)
• Key terms (2)
• The reporting system (3)
• Data revision (4)
• Publishing (5)

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Background / Changes in Norway 2004 / 2005

• Central bank of Norway (Norges Bank) discontinued
  the foreign payments statistics at the end of
  2004
• The Customs excise authorities established a
  new Register of crossborder transactions and
  currency exchange (Valutaregisteret)
• Statistics Norway took over responsibility for
  data on non-financial sector for balance of
  payment purposes
• Pilot reports 2003 and 2004
• First real reports 2005 (quarterly and annual)
  only used for BoP-purposes
• Data for 2006 (Annual survey) published as
  separate statistics

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External trade in services 2The concept of
services

• Services What is a service?
• Type of services CPA EU Classification of
  Products by Activity
• It is difficult to define the concept of services
  in a short and precise manner. In the
  BoP-reporting it is therefore to some extent
  necessary for the reporting firms to apply their
  own understanding of the concept, both when it
  comes to distinguish between goods and services
  and to identify the different types of services.
  When deciding on what types of services that are
  exported and/or imported the reporting firms
  should use the document "Statistical
  characteristics".
• A service will also typically lead to a change in
  the principal's own state or condition or in an
  item she owns a medical service leads to the
  patient's recovery a freight service ensures
  that a commodity is moved to another location.
• many services are closely related to goods. The
  transport, storage and repairs of goods are
  examples of such services. Other examples are
  information and media services that are stored on
  physical objects such as on a compact disc.

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Overview of CPA-codes
000091 000099 / 4 Contract work and repairs
112011 112012 / 2 Services related to oil and gas exploration, excluding surveying
450001 450002 / 2 Building and construction projects
511000 519000 / 2 Wholesale trade and intermediate trade
555210 / 1 Canteens and catering
601010 601020 / 2 Transport by rail
602100 602400 / 3 Other land transport
603010 / 1 Pipeline transport
611010 611034 / 4 Sea and coastal water transport
621010 622032 / 6 Air transport
631110 634000 / 8 Supporting and auxiliary transport activities travel agency activities
641110 642000 / 3 Post and telecommunication
651000 / 1 Financial services
672000 / 1 Activities auxiliary to insurance and pension funding
702000 703000 / 2 Real estate activities
710000 / 1 Renting of transportation, machinery and equipment
721000 726000 / 6 Computer services
730000 / 1 Research and development (R D)
741100 748000 / 12 Business services
900000 / 1 Collection and treatment of waste and sewage and other environmental services
921000 927000 / 7 Leisure activities, cultural services and sports
981000 989000 / 3 Other services
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External trade in services The concept of
exports and imports

• Exports / income
• Services delivered to and paid for by foreign
  counterparts
• All services that are delivered by the reporting
  firm (resident in Norway) to companies,
  affiliates, physical persons or other units
  abroad are regarded as exports. Note that the
  services could be delivered either in Norway or
  abroad.
• Imports / expenditure
• Services received from and paid out to foreign
  counterparts
• All services that are delivered to the reporting
  firm (resident in Norway) from foreign units are
  regarded as imports, including services that are
  activated in the balance sheet and written off
  over a period of time. Note that the services
  could be delivered either in Norway or abroad.

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Resident (Norwegian / domestic enterprise) ?
Non-resident (foreign enterprise)

• Norwegian / domestic resident
• The following units are regarded as Norwegian in
  the balance of payments statistics
• Legal persons registered as Norwegian, excluding
  their affiliates abroad. The definition is valid
  regardless of the owners' nationality. Hence,
  foreign owned companies registered as Norwegian
  are regarded as Norwegian units.
• Affiliates in Norway of foreign registered legal
  persons.
• Physical persons permanently residing in Norway,
  regardless of citizenship.
• Foreign / foreigner
• The following units are regarded as foreign in
  the balance of payments statistics
• Legal persons registered abroad, including
  Norwegian owned companies that are registered
  abroad.
• Norwegian companies' affiliates abroad.
• Physical persons permanently residing abroad,
  regardless of citizenship.

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Sources of misinterpretation Terms not part of
the vocabulary of the bookkeepers

• Purchaser / seller
• Settlement part
• Country of delivery
• Domestic trade included
• Goods
• Mix of exports and imports
• Value of services included in the price of the
  goods

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Possible initiatives to improve data quality

• Clear and consistent feedback to the reporters
• Frequent reporting quarterly surveys vs. annual
  surveys
• Internal competence
• Differentiation

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External trade in services - procedures

• I

Web-form
Population
Revised data
Sample
Ssb-receiv syst
Revised/Reported data vs data for the Whole
population
Respondents
T I S -syst
Letter
Controls
Publishing
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External trade in services - 3 THE REPORTING
SYSTEMHow to report Exports and imports of
services to and from abroad
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Our Websites

• Information about the survey and link to forms
• http//www.ssb.no/skjema/tjh/
• Information in Norwegian
• http//www.ssb.no/english/skjema/tjh/
• Information in English
• The form is only in Norwegian
• Statistics on services
• http//www.ssb.no/english/subjects/09/05/uhtjenest
  er_en/
• BoP-statistics
• http//www.ssb.no/english/subjects/09/ur_okonomi_e
  n/

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External trade in services - 4 Data revision
methods and tools

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Controls revision
Respondent
Missing reports
Controls
Previous report Contact phone Annual
report Web-site
TIS OK
NO
Controls
YES
System revision Weighing up
Controls
Growth Decline New service Old service
missing New enterprise
Use in the BoP Other publishing
Revision
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Overview

• The annual survey 2006
• Data revision methods and tools
• Test
• Other sources
• Problems around trade of goods and services
• The quarterly survey 2q 2007
• Data revision methods and tools
• Data revision an example
• Challenges and further developments in surveys of
  external trade in services

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The annual survey

• The sample for 2006 has ca 4 000 respondents
• Pr 19 of September 184 respondents are missing
• Response rate about 98
• As for the quarterly survey, we run daily updates
  on incoming data (SAS program)

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Data revision

• The respondents are divided into 4 groups mainly
  based on
• NACE (Standard Industrial Classification) and
  every auditor
• has their own group
• Afterwards, data are organised into 3 groups
• Respondents which also participates in the
  quarterly survey (540)
• Respondents from the annual survey 2005 (1575)
• New respondents (1865)

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Data revision Test

• If total figures 200612 and 2006 differs more
  than 5
• Data ok if less than 5
• Absolute error (AF) if more than 5
• New and/or missing cpa codes compared with 200612
  or previous year
• Based on information from the testing program,
  the data application and maybe other SAS-programs
  every auditor does MANUALLY corrections

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Data revision Other sources

• External trade in goods
• Sales income / expenditure
• Annual accounts
• Web-site
• Comments from respondents IDUN web-form
• and / or feedback from respondents via e-mail /
  telephone

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Problems around trade of goods and services

• Services related to products
• Started a working group which is going to analyze
  the relationship between goods and services
• Contract work and repairs
• 000091 Installation and assembly
• 000092 Repairs and maintenance
• 000093 Rebuilding and outfitting conducted for
  others
• 000099 Contractual work and other industrial
  services
• Construction
• 450001 Construction abroad
• 450002 Construction in Norway
• Intermediate trade
• 519000 Intermediate trade
• Computer services
• 721000 Hardware consultancy
• 722000 Software and system consultancy
• Film and video activities
• 921000 Film and video activities
• Royalties and licence fees
• 981000 Royalties and licence fees

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Data revision Challenges

• Communication with respondents
• Do enterprises understand what they are asked to
  report?
• Ex) Merchanting services (Intermediate trade)
• For year 2006, it is reported 83 imports (corr.
  MNOK 3 039) and 53
• exports (corr. MNOK 2 230), which shows obvious
  misunderstanding
• about the reporting
• Consistency in questionnaires over time
• Ex) Transportation services
• Changes in CPA use has caused confusions to some
  of the respondents
• Communication with IT support in SSB
• Necessary to have better communication with IT
  support section for updating questionnaires, data
  transfers and detecting/recovering of system
  failures

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Further developments

• Obtaining expertise
• Increasing sample size of quarterly report
• Eventually, removing yearly report (planed from
  yearly report 2008)
• Having closer relationships with each
  respondents, especially within the problem areas
  such as merchanting services and transportation
  services
• Cooperation with IT support
• Updating UTBASE
• Alternative solutions for questionnaires (Excel /
  Altinn)

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External trade in services - 5

• Published statistics
• for non-financial enterprises, 2006

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External trade in services, 2006

• Transport dominates trade in services
• Enterprises engaged in transport, storage and
  communication accounted for more than 50 per cent
  of both exports and imports of services to and
  from Norway in 2006. European countries were the
  most important trading partners.
• The statistics on external trade in services for
  non-financial enterprises are part of the
  statistical basis for Norways balance of
  payments. These statistics do not include trade
  in services for financial enterprises,
  households, non-profit organisations and public
  administration. The figures presented here are
  therefore not comparable with the figures
  presented in Balance of Payments - Current and
  Capital account (cf. About the statistics).
• These statistics were established in 2005 when
  Norges Bank discontinued their foreign payment
  statistics, which were an important basis for the
  balance of payments. This article presents the
  2006 figures for external trade in services for
  main types of services for non-financial
  enterprises, including enterprises operating in
  ocean transport. Figures on external trade in
  services regarding geographical specification are
  also included.
• The purpose of the statistics on external trade
  in services is to provide information about the
  service flows between Norway and other countries.
  Income and expenditure in connection with exports
  and imports of services to and from other
  countries are important economic indicators both
  in describing structural changes and in
  monitoring economic trends (cf. About the
  statistics on limitations and other conditions).

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External trade in services, by CPA-codes,
aggregated. 2006. NOK million
Service types Export Export Import Import
NOK million Share NOK million Share

Total 155 036 100.0 127 689 100.0

Contract work and repairs 7 192 4,6 8 912 7.0
Services related to oil and gas exploration, excluding surveying 11 778 7,6 18 645 14,6
Building and construction projects 1 774 1,1 2 670 2,1
Wholesale trade and intermediate trade 3 457 2,2 5 280 4,1
Transport by rail and other land transport 1 902 1,2 1 982 1,6
Sea and coastal water transport 82 230 53.0 15 436 12,1
Air transport 904 0.6 1 216 1.0
Supporting and auxiliary transport activities, travel agency activities 4 960 3,2 28 784 22,5
Post and telecommunication 4 117 2,7 4 865 3,8
Renting of transportation, machinery and equippment 5 141 3,3 3 432 2,7
IT services 3 819 2,5 4 048 3,2
Research and development (R D) 1 571 1.0 1 423 1,1
Business services 21 629 14.0 23 540 18,4
Leisure activities, cultural services and sports 872 0.6 2 390 1,9
Other services 3 691 2,4 5 067 4.0
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External trade in services, by major industry
activities, aggregated. 2006. NOK million
Major industry activities Export Export Import Import
NOK million Share NOK million Share
Total 155 036 100.0 127 689 100.0
Mining and quarrying 14 056 9,1 21 870 17,1
Manufacturing 14 217 9,2 11 950 9,4
Electricity, gas and water supply 126 0,1 1 007 0,8
Construction 1 119 0,7 1 289 1,0
Wholesale and retail trade 4 671 3,0 10 149 7,9
Transport, storage and communication 98 821 63,7 65 829 51,6
Business activities 21 086 13,6 13 572 10,6
Other industry activities 940 0,6 2 022 1,6
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External trade in services, geographical
specification
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And thats it
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And thats it
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Data revision example
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Data revision example (cont.)
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Data revision example (cont.)
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Data revision example (cont.)