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PPI for Water and Sewerage in Sweden
27th Voorburg Group meeting
Warsaw, Poland
October 4th 2012
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
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.
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.
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.
Price collection
• Prices collected are from municipal plants. Data for two type houses is collected from all municipalities by the trade association Svenskt Vatten (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.
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.
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.
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?
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?
