What is Quarterly economic statistics?

Quarterly economic statistics is a statistical product describing the private sector’s economic activities. Quarterly economic statistics covers private sector profitability, value added, gross fixed capital formation and changes in inventories. The statistics is used as input to the quarterly GDP, and can also be used as individual business cycle indicators.

Summary of the first quarter

All percentage and nominal changes are compared to the corresponding quarter last year.

• The total value added increased by 5.9 percent in current prices and by 6.7 percent in constant prices. The production volume increased by 2.6 percent and the volume of intermediate consumption increased by 0.5 percent.
• The profit share of value added amounted to 27.8 percent, an increase by 1.9 percentage points. Gross operating surplus increased by 13.6 percent and compensation of employees increased by 3.1 percent, all in current prices.
• The operating profit increased by 11.4 percent. The operating margin amounted to 7.3 percent, an increase by 0.6 percentage points.
• Gross fixed capital formation increased by 7.4 percent in current prices. Investments made in machinery and equipment contributed the most to the change.  
• Total inventories increased by 29.7 billion SEK in constant prices compared to last quarter. The speed of stockbuilding amounted to 16.6 billion SEK in constant prices.

A reduced input share leads to an increase in value added

In economic terms, value added is a measure of the return generated by a production process during a given period. In other words, value added represents the value of all goods and services produced, also referred to as gross output, excluding the value of all goods and services used as inputs in the production process, also referred to as intermediate consumption.

The total value added of the private sector increased by 6.7 percent in constant prices during the first quarter of the year. Gross output increased by 2.6 percent and intermediate consumption increased by 0.5 percent. As intermediate consumption increased at a slower rate than gross output, the input share decreased from 66.7 percent to 65.3 percent compared with the corresponding quarter last year. The reduced input share explains why the growth in total value added exceeds the growth in gross output.

An increased profit share drives value added

Value added is a measure of the total return generated by each production process. Within each process, different production factors are used to produce the given goods and services. These production factors are, in simple terms, labour – that is, the physical work performed and the skills required to carry it out – and capital, meaning the physical capital in the form of buildings, machinery, and equipment in which the firm has invested. Value added can be broken down into compensation of employees and gross operating surplus, which measure the returns accruing to each production factor. When the returns to the two production factors are related to total value added, we obtain the wage share and the profit share, which in turn indicate how the total return is distributed between labour and capital.

The profit share amounted to 27.8 percent in the first quarter, an increase of 1.9 percentage points compared with the corresponding quarter last year. Operating surplus increased by 13.6 percent, and compensation of employees increased by 3.1 percent, all in current prices.

Increased revenues result in improved profitability

Profitability can also be expressed using business oriented measures such as operating profit and operating margin. From this standpoint as well, profitability in the private sector increased in the first quarter. Operating profit increased by 11.4 percent and operating margin amounted to 7.3 percent, an increase of 0.6 percentage points compared to the corresponding quarter in the previous year. Operating revenues and operating costs excluding personnel costs increased by 1.9 and 0.9 percent respectively, while personnel costs increased by 3.1 percent.

The current global situation, specifically the developments in the Strait of Hormuz towards the end of February, has led to economic effects that can already be observed in certain sectors during the first quarter of the year. The operating profit has risen, however, it is the decrease in operating costs excluding personnel costs that explains the increase. The lower costs may be explained by businesses relying on existing inventories of raw materials that were purchased at lower prices. In this scenario, the increase in prices would primarily impact volumes sold, rather than volumes produced.

Machinery and equipment drive growth in gross fixed capital formation

Gross fixed capital formation increased by 7.4 percent compared to the corresponding quarter last year, measured in current prices. It was investments made in machinery and equipment that drove the growth with an increase of 10.0 percentage points. Other buildings and constructions had a negative growth of 2.3 percentage points. The contribution from investments made in dwellings was more or less at a standstill and had a marginal decrease of 0.3 percentage points. 

Positive inventory change

Total inventories increased with 29.7 billion SEK in constant prices compared with the previous quarter. Inventories of goods for resale accounted for the largest change, increasing by 19.3 billion SEK.

The speed of stockbuilding, calculated as inventory investment during the current period minus inventory investment in the corresponding period of the previous year, amounted to 16.6 billion SEK in constant prices. The increase in inventories during the year’s first quarter was therefore larger then the increase in the corresponding period last year.