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PPI for Water & Sewerage in Sweden: Industry Structure, Price Collection, & Index Calculation

This document provides an overview of the water and sewerage industry in Sweden, including its structure, background to the construction of the PPI, price collection and weight calculation methods, and index calculation. It also discusses the reasons for a new review and poses questions for the 2012 review.

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PPI for Water & Sewerage in Sweden: Industry Structure, Price Collection, & Index Calculation

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  1. PPI for Water and Sewerage in Sweden 27th Voorburg Group meeting Warsaw, Poland October 4th 2012

  2. Content • Structure of the industry • Background to the construction of PPI for Water supply • Price collection and weight calculation • Index calculation • Reasons for a new review • Questions for the 2012 review

  3. Structure of the industry HOUSEHOLDS • Almost all water consumed by households is produced and treated by municipal plants. Municipalities are required by law to provide water and sewerage services. • Revenues for the business may not exceed necessary costs. • Raw water for tap water production is taken both from ground water and surface water. Mainly larger cities use surface water.

  4. Structure of the industry THE INDUSTRY SECTOR • The industry sector is almost completely self-sufficient in water supply. Only 5 % comes from other sources. • The most important water source is surface water from rivers and lakes, but also from the sea. • Wastewater treatment mainly done in-house.

  5. Background to the construction of PPI for Water supply • First published on the web for January 2000. • A review in 2003 - Changed method from survey to collected data due to a volatile index. • Sweden only covers Water supply. Sewerage not included but is to some extent integrated in Water supply. • Hard to measure the price for households and companies self-supply of water.

  6. Price collection • Prices collected are from municipal plants. Data for two type houses is collected from all municipalities by the trade association SvensktVatten (Swedish water). • The two type houses, A and B, are an average house and an average apartment building with the amount of water consumed specified. • We calculate a weighted average of the annual cost of each type house.

  7. Weight calculation • Weights for Type house A and B is based on the amount of houses in these forms in the country as well as the cost for respective house. • Weight for NACE 36 in the total PPI is based on the total production of water from municipal plants and the cost for water from municipal plants.

  8. Index calculation • Compilation of prices from all municipalities are usually not completed until sometime during the summer. • CPI index Water and Sewerage used as a proxy in January. • Only two price updates per year as seen in the chart on the next page.

  9. Reasons for a new review • Long time since last review (9 years). Do we cover what is produced in the industry and can we do better? • Concerns regarding calculations of weights. Can the calculation be more intuitive?

  10. Questions for the 2012 review • Can we include sewerage as an own division? • Should we split surface- and groundwater according to NACE Rev. 2? • What does National accounts want? Currently use CPI rather than PPI. • Could we replace PPI with CPI?

  11. Emma Strand Statistics Sweden +46 8 506 947 17 emma.strand@scb.se

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