External Trade in Services: Overview and Reporting System

1. External trade in services Per Øivind Grindalen Division for External Trade (22) Statistics Norway StatNorway TIS Ukrain okt 2008

2. External trade in services Background / History of the statistics (1) Key terms – (2) The reporting system (3) Data revision (4) Publishing (5) StatNorway TIS Ukrain okt 2008

3. 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 StatNorway TIS Ukrain okt 2008

4. 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. StatNorway TIS Ukrain okt 2008

5. Overview of CPA-codes StatNorway TIS Ukrain okt 2008

6. 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. StatNorway TIS Ukrain okt 2008

7. 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. StatNorway TIS Ukrain okt 2008

8. 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 StatNorway TIS Ukrain okt 2008

9. Possible initiatives to improve data quality • Clear and consistent feedback to the reporters • Frequent reporting – quarterly surveys vs. annual surveys • Internal competence • Differentiation StatNorway TIS Ukrain okt 2008

10. 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 StatNorway TIS Ukrain okt 2008

11. External trade in services - 3THE REPORTING SYSTEMHow to report Exports and imports of services to and from abroad StatNorway TIS Ukrain okt 2008

12. 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/uhtjenester_en/ • BoP-statistics • http://www.ssb.no/english/subjects/09/ur_okonomi_en/ StatNorway TIS Ukrain okt 2008

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15. External trade in services - 4Data revision methods and tools StatNorway TIS Ukrain okt 2008

16. 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 StatNorway TIS Ukrain okt 2008

17. 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 StatNorway TIS Ukrain okt 2008

18. 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) StatNorway TIS Ukrain okt 2008

19. 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) StatNorway TIS Ukrain okt 2008

20. 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 StatNorway TIS Ukrain okt 2008

21. 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 StatNorway TIS Ukrain okt 2008

22. 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 StatNorway TIS Ukrain okt 2008

23. 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 StatNorway TIS Ukrain okt 2008

24. 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) StatNorway TIS Ukrain okt 2008

25. External trade in services - 5 Published statistics for non-financial enterprises, 2006 StatNorway TIS Ukrain okt 2008

26. 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 Norway’s 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 BalanceofPayments - CurrentandCapitalaccount (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). StatNorway TIS Ukrain okt 2008

27. External trade in services, by CPA-codes, aggregated. 2006. NOK million StatNorway TIS Ukrain okt 2008

28. External trade in services, by major industry activities, aggregated. 2006. NOK million StatNorway TIS Ukrain okt 2008

29. External trade in services, geographical specification StatNorway TIS Ukrain okt 2008

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42. Data revision: example StatNorway TIS Ukrain okt 2008

43. Data revision: example (cont.) StatNorway TIS Ukrain okt 2008

44. Data revision: example (cont.) StatNorway TIS Ukrain okt 2008

45. Data revision: example (cont.) StatNorway TIS Ukrain okt 2008