30 October 2012
Quarterly Sector Accounts: second quarter of 2012
Business investment rate nearly stable at 20.3% in the euro area and up to 20.1% in the EU27
Business profit share at 38.1% and 37.7% respectively
In the second quarter of 2012, compared with the first quarter of 2012, the business investment rate remained nearly stable in the euro area (EA17) and increased in the EU27. In the euro area, the business profit share remained stable, as wage costs increased at the same pace as value added.
These data come from a detailed set of seasonally adjusted1 quarterly European sector accounts2 released by Eurostat, the statistical office of the European Union, and the European Central Bank (ECB).
Business investment rate up in the EU27, almost stable in the euro area
In the second quarter of 2012, the gross investment rate3 of non-financial corporations was 20.1% in the EU274, compared with 19.9% in the first quarter of 2012.
Investment rate of non-financial corporations (seasonally adjusted)
In the euro area5, the investment rate was 20.3%, compared with 20.2% in the previous quarter. Investment increased (+0.8%) at a higher rate than gross value added (+0.4%). Total stocks (materials, supplies and finished goods) fell for the third quarter in a row (see table 2).
Business profit share down in the EU27, stable in the euro area
In the EU27, the gross profit share6 of non-financial corporations was 37.7% in the second quarter of 2012, compared with 37.9% in the first quarter of 2012.
Profit share of non-financial corporations (seasonally adjusted)
In the euro area, the profit share remained stable at 38.1% in the second quarter of 2012, due to value added growing at the same rate as compensation of employees (wages and social contributions) plus taxes less subsidies on production (both +0.4%).
Nominal growth of components of the investment rate and the profit share (euro area)
(seasonally adjusted data, change compared with the previous quarter)
Seasonal adjustment has been performed using the Tramo-Seats method. The seasonally adjusted series are built up indirectly as the sum of seasonally adjusted components.
Institutional sectors bring together economic units with broadly similar characteristics and behaviour, namely: households (including non-profit institutions serving households), non-financial corporations, financial corporations, government and the rest of the world.
The gross investment rate of non-financial corporations is defined as gross fixed capital formation divided by gross value added. This ratio relates the investment of non-financial businesses in fixed assets (buildings, machinery etc.) to the value added created during the production process.
The European Union (EU27) consists of 27 Member States: Belgium, Bulgaria, the Czech Republic, Denmark, Germany, Estonia, Ireland, Greece, Spain, France, Italy, Cyprus, Latvia, Lithuania, Luxembourg, Hungary, Malta, the Netherlands, Austria, Poland, Portugal, Romania, Slovenia, Slovakia, Finland, Sweden and the United Kingdom plus the European Central Bank and the EU institutions.
The euro area (EA17) consists of 17 Member States: Belgium, Germany, Estonia, Ireland, Greece, Spain, France, Italy, Cyprus, Luxembourg, Malta, the Netherlands, Austria, Portugal, Slovenia, Slovakia and Finland plus the European Central Bank.
The profit share of non-financial corporations is defined as gross operating surplus divided by gross value added. This profitability-type indicator shows the share of the value added created during the production process remunerating capital. It is the complement of the share of wage costs (plus taxes less subsidies on production) in value added.
The compilation of the European sector accounts follows the European System of Accounts (ESA 95) and covers the period from the first quarter of 1999 to the second quarter of 2012. The European sector accounts are not a simple sum of the data of individual countries. There are six specific compilation steps: (1) conversion to euro, (2) estimation of missing countries,
(3) incorporation of the European institutions, (4) estimation of the flows between the euro area / EU and third countries,
(5) balancing of the accounts and (6) seasonal adjustment of key series.
Due to the conversion to euro, the growth rates of EU aggregates may be affected by movements in exchange rates and should be viewed with caution. For this reason, nominal growth rates (bar chart and table 2) are provided for the euro area only. However, there is hardly any impact on ratios such as the investment rate and the profit share.
The rest of the world accounts, as compiled by Member States, record transactions between the national economy and all non-resident units, including those in other EU Member States. To measure the external transactions of the euro area / EU, it is necessary to remove cross-border flows within the area concerned. Imbalances between intra-imports and intra-exports, called “asymmetries”, are then eliminated. Currently, intra-flows and resulting asymmetries are not removed in the other domains of national accounts of Eurostat. Therefore, European sector accounts are internally consistent but have discrepancies with other national accounts data.
Release and revision policy
The quarterly news releases are published four months after each quarter. The next release will take place on 29 January 2013.
The whole time series are revised every quarter. Compared with News Release 115/2012 of 1 August 2012, the business investment rate for the first quarter of 2012 has been revised from 20.6% to 20.2% in the euro area and remains unchanged at 19.9% in the EU27. The business profit share has been revised from 38.3% to 38.1% in the euro area and from 38.1% to 37.9% in the EU27.
The ECB and Eurostat publish integrated non-financial and financial accounts, including financial balance sheets, for the euro area. Eurostat also publishes the non-financial accounts of the European Union.
Eurostat's website includes detailed annual sector accounts by country and derived key indicators, which also include the indicators that combine non-financial and financial accounts such as additional profitability indicators.
The full set of quarterly sector accounts is published for euro area / EU27 aggregates only. However, a subset of quarterly key indicators is published 105 days after each quarter at http://ec.europa.eu/eurostat/sectoraccounts (see "Quarterly data") for 15 out of the 18 members of the European Economic Area (EEA) whose GDP is above 1% of the EU27 total. The other 12 EEA members, whose GDP is below 1% of the EU27 total, do not have to transmit the quarterly accounts of corporations to Eurostat.
Eurostat Press Office
Tel: +352-4301-33 444
Eurostat news releases on the internet:
For further information:
Tel: +352-4301-31 542
Tel: +352-4301-36 120
Selected Principal European Economic Indicators: http://ec.europa.eu/eurostat/euroindicators
Table 1: Key indicators of the euro area (EA17) and of the European Union (EU27)
* Adjusted for one outlier found in national data.
Table 2: Gross operating surplus, its components, changes in inventories and gross fixed capital formation of non-financial corporations, in the euro area (EA17)