Services - 2. quarter of 2004

Quarter-on-quarter comparison:

Seasonally adjusted constant price sales in services increased by 1.6%, rising most in computer and related services (+5.0%) and other business activities (+3.5%). Sales of transport and supporting and auxiliary transport activities of travel agencies were also growing (+2.2%) as were sales in retail trade incl. the automotive segment (+1.2%). A number of branches of services recorded an unusually high increase in sales in April. The enterprises probably reacted to the change in VAT rates (in force since May) by pre-invoicing a number of actions. This especially held for cargo handling and storage, transport via railways and other supporting transport activities.

Year-on-year comparison:

Seasonally adjusted constant price sales in services rose by 3.8% in the 2nd quarter.

Sales not seasonally adjusted were 4.8% up, rising most in computer and related activities (+13.2%), transport (+13.0%) and hotels and restaurants (+5.4%). The drop occurred in other service activities only (-5.8%).

Sales broken down in a more detailed manner were as follows:

- sales in retail trade, incl. the automotive segment, rose by 2.5%. In the automotive segment they were 1.4% up, rising along with sale, maintenance and repair of motor vehicles (+1.0%) and of automotive fuel (+2.0%). Sales in retail trade grew by 3.0%, as did in the 1st quarter, of which sale of food, beverages and tobacco by 1.3% and of non-food goods by 4.4% (where sales of textile, clothing and footwear increased most, +14.4%);

- sales in hotels and restaurants were influenced by the development in hotels and similar accommodation establishments where they increased by 21.9%. In restaurants, canteens and catering, they were 0.3% down. The unusual increase in sales of accommodation (hotels, camping sites and other provision of short-stay accommodation) was also connected with the world championship in ice hockey held in Prague and Ostrava as this event attracted a number of tourists unusually high for that period of time. Services in restaurants, bars, canteens and catering were adversely affected by the May amendment to the VAT Act;

- as far as transport is concerned, sales grew in all of its significant branches (also due to the above-mentioned pre-invoicing); they grew most in supporting and auxiliary transport activities of travel agencies (+17.1%). In transport by road they increased by 11.1%, in transport via railways by 5.5% and in air transport by 13.5%. Sales in post and telecommunications were higher by 3.4% of which post and courier activities accounted for an increase of 7.5% and telecommunications for an increase of 2.9%. The growth of post and courier activities was also affected by the introduction of certain new fees;

- sales in computer and related activities grew by 13.2%. A higher interest was recorded for hardware consultancy plus software consultancy and supply (+19.0%), the increase being partially due to the last year’s low basis for comparison. Sales related to database activities dropped (-0.6%) and so did maintenance and repair of office machinery (-6.0%);

- in other business activities the growth, which began in the 2nd quarter of 2004 continued (+4.3%). Sales grew in a majority of the industries measured, but most in architectural and engineering activities and technical testing and analysis (+16.0%) and in investigation and security activities (+6.6%);

- sales in other service activities dropped (-5.8%) and the decrease was the most marked in hairdressing and other beauty treatment (-10.2%). As in restaurants, canteens and catering, the rise in the VAT rate affected this area, too.

Since the 2nd quarter, the sale index of services (total) published by the CZSO is derived in a combined manner - i.e. sales in industries where prices are measured inclusive of VAT also include VAT and sales in industries where prices are measured exclusive of VAT are free of VAT. Up to the 1st quarter, sales inclusive of VAT were taken for all industries of services, and indices both including and excluding VAT did not virtually differ. After the VAT rate were changed (significantly for services) the sales index with VAT for all of the industries would provide incorrect results. The change in the methodology of calculation was also applied to previous periods. Except for the 1st quarter, these changes are insignificant.

Analysis - Services in the 2nd quarter of 2004

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Note
Contact: Hellerová Alena, phone (+420) 274052921, e-mail ahellerova@gw.czso.cz
Data source: CZSO direct survey in enterprises
End of data collection: 6 August 2004
End of data processing: 12 August 2004
Related publications: 9106-04 Results of Monthly Survey in Retail Trade, Hotels and Restaurants
9003-04 Market Services
9301-04 Transport and Communications ( https://csu.gov.cz )
The data are preliminary; revised data will be released in following-up publications.