Third quarter of 2012 Household saving rate nearly stable at 13.0% in the euro area and 11.2% in the EU27 Household real income per capita fell by 0.3% in the euro area

Reference: STAT/13/15 Event Date: 29/01/2013

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STAT/13/15

29 January 2013

Third quarter of 2012
Household saving rate nearly stable at 13.0% in the euro area and 11.2% in the EU27
Household real income per capita fell by 0.3% in the euro area

In the third quarter of 2012 compared with the second quarter of 2012, the household saving rate remained almost stable in both the euro area (EA17) and the EU27. The household investment rate was unchanged in the euro area and remained almost stable in the EU27. In the euro area, household income per capita1 fell by 0.3% in real terms, after a decrease of 0.5% in the previous quarter.

These data come from a detailed set of seasonally adjusted2 quarterly European sector accounts3 released by Eurostat, the statistical office of the European Union, and the European Central Bank (ECB).

Household saving rate remained nearly stable in both the EU27 and the euro area

In the third quarter of 2012, the gross saving rate4 of households in the EU275 was 11.2%, compared with 11.1% in the second quarter of 2012. In the euro area6, the household saving rate was 13.0%, compared with 12.9% in the previous quarter (see next chart and table 1).

Household saving rate (seasonally adjusted)

Household investment rate remained at low levels in both zones

In the EU27, the gross investment rate of households7 was 8.0% in the third quarter of 2012, compared with 8.1% in the second quarter of 2012. In the euro area, the household investment rate was 8.9%, stable compared with the previous quarter (see next chart and table 1).

Household investment rate (seasonally adjusted)

In the euro area, in nominal terms, household income rose by 0.3% in the third quarter of 2012, while consumption increased by 0.2% and investment (gross fixed capital formation, mostly in dwellings) fell by 0.3% (see next chart and tables 3 and 4).

Nominal growth of household adjusted gross disposable income, actual final consumption and gross fixed capital formation (euro area)

(seasonally adjusted data, change compared with the previous quarter)

In the euro area, in nominal terms, the increase in household income (+0.3%) was due to the positive contributions of social benefits (+0.3 percentage points - pp), wages8 (+0.2 pp) and gross operating surplus/mixed income (+0.1 pp), while taxes (-0.2 pp) and net property income and other current transfers (-0.1 pp) contributed negatively (see next chart and table 3).

Contributions of components to the nominal growth of household adjusted gross disposable income (euro area)

(seasonally adjusted data, change compared with the previous quarter)

Household real income per capita down in the euro area

In the euro area, in real terms, household income per capita fell (-0.3%) in the third quarter of 2012, as nominal income per capita (+0.2%) rose at a slower pace than prices (+0.5%) (see next chart and table 3). Household real consumption per capita decreased (-0.4%) (see table 4).

Growth of household adjusted gross disposable income per capita, in nominal and real terms,
and of the deflator of final consumption expenditure (euro area)

(seasonally adjusted data, change compared with the previous quarter)

• In this release, household income / consumption refer to the adjusted gross disposable income / actual final consumption of households including the value of goods and services (e.g. in education and health) financed by government. The amount of goods and services financed by government are recorded under 'social transfers in kind'. Household real income per capita is defined as the adjusted gross disposable income of households, in nominal terms, divided by the total population (source: National Accounts) and by the deflator (price index) of household final consumption expenditure.

• 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 saving rate of households is defined as gross saving divided by gross disposable income, with the latter including the change in the net equity of households in pension funds reserves. Gross saving is the part of the gross disposable income, after the latter inclusion, which is not spent as final consumption expenditure. Therefore, saving rate increases when gross disposable income grows at a higher rate than final consumption expenditure.

• 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 gross investment rate of households is defined as gross fixed capital formation divided by gross disposable income, with the latter being adjusted for the change in the net equity of households in pension funds reserves. Household investment mainly consists of the purchase and renovation of dwellings.

• In this release, wages exclude social contributions paid either by employees or by employers.

Methodological information

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 third 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 charts and table 3) are provided for the euro area only. However, there is hardly any impact on ratios such as saving and investment rates.

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.

For detailed data and methodology, please see Eurostat's website at: http://ec.europa.eu/eurostat/sectoraccounts and ECB's website at: http://www.ecb.eu/stats/acc/html/index.en.html.

Release and revision policy

The quarterly news releases are published four months after each quarter. The next release will take place on 29 April 2013.

The whole time series are revised every quarter. Compared with News Release 152/2012 of 30 October 2012, the household saving rate for the second quarter of 2012 remains unchanged at 12.9% for the euro area and has been revised from 11.0% to 11.1% in the EU27. The household investment rate has been revised from 8.8% to 8.9% in the euro area and remains unchanged at 8.1% 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 debt-to-income ratios.

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 households to Eurostat.

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)

Table 2: Household adjusted gross disposable income and its components in the euro area (EA17)

(seasonally adjusted, millions of euro at current prices)

Table 3: Household adjusted gross disposable income and its components, in the euro area (EA17)

(seasonally adjusted, percentage change compared with the previous quarter)

* The contribution 'C' of an element 'E' to the growth of an aggregate 'A' between T-1 and T is CT = (ET - ET-1) / AT-1. It is also equal to the growth rate of the component (ET - ET-1)/ET-1 multiplied by its share in the aggregate at the previous period ET-1/AT-1.

** Deflator for the seasonally and working days adjusted final consumption expenditure of households (including non-profit institutions serving households) which has been used to deflate adjusted gross disposable income and actual final consumption (See table 4).

Table 4: Household final consumption and gross fixed capital formation, in the euro area (EA17)

(seasonally adjusted, millions of euro at current prices / percentage change compared with the previous quarter)