Census of International Trade in Services and Royalties: Year ended June 2011

Data quality

Survey background

The 2011 Census of International Trade in Services and Royalties surveyed New Zealand businesses for the year ended June 2011. Businesses were asked to report their:

  • sales (revenue, exports) of services to overseas
  • revenue from royalties and other intangible assets
  • purchases (expense, imports) of services from abroad
  • and payments for use of royalties and other intangible assets.

In the 2011 Census we also asked business how those services were delivered to their non-resident customers. This question was based on modes of supply as defined by the Manual on Statistics of International Trade in Services (MSITS 2010).

The census collected information about New Zealand's international trade in commercial services and royalties. Commercial services are defined as services other than transport, travel, insurance, and government services not included elsewhere. Examples of commercial services measured by the census are business services, information technology and communication services, financial services, and technical and professional services.

The 2011 Census was a joint collection between Statistics New Zealand and the Ministry of Foreign Affairs and Trade (MFAT). As a result, all information collected within the census is released to MFAT, unless the survey respondent objects. One of MFAT's main roles is to work with New Zealand's exporters to improve competition and access to international markets. Information collected by the census is used to reflect the key interests of New Zealand exporters and negotiate international trade agreements.

See Census of International Trade in Services and Royalties 2011 for the survey questionnaire and guide.

Purpose of the census

The main use of this census is to improve the quality of service statistics within the balance of payments current account. The census results are used to calculate the non-sampled estimate. The non-sampled estimate is added to the regular quarterly sample survey data to represent the services trade for the whole population. More specifically, the census results are used to:

  • update the non-sampled estimate for the quarterly services series (this will be revised back to the September 2005 quarter)
  • generate a new non-sampled estimate for use in the quarterly sample survey (this will be carried forward until the next census)
  • update the quarterly survey population (to account for new entrants and service categories).

Indications are that the quarterly service series for exports and imports for the year ended June 2011 will be revised upwards, due to the new census. The revisions to the quarterly series will extend back to the September 2005 quarter. These revisions will be published on 21 September 2012, with the Balance of Payments and International Investment Position: June 2012 quarter information release.

The level of revenue and expenditure measured by the census shows change when compared with the previous sample-based quarterly series. The main reasons for the changes are:

  • the quality of the non-sampled estimate in the quarterly series
  • growth in the services sector, which is not reflected in the quarterly series and non-sampled estimate
  • better reporting by companies in both the quarterly and census population. A detailed survey guide was sent out with the census to explain the concepts.

Target population

The 2011 Census had population of approximately 6,300 New Zealand businesses. These businesses were identified primarily from the Statistics New Zealand Business Frame. The business frame is a database of New Zealand businesses, with GST exceeding $30,000. Therefore, the census population excluded enterprises below that threshold. Also excluded from the census were New Zealand individuals engaged in international service transactions.

Statistics NZ added enterprises from industry sources, and the business news and media.

Response rate

The response rate to the 2011 Census was 88 percent. Of all the enterprises surveyed, 55.2 percent responded with data, while 32.8 percent reported no data. Many respondents spent considerable time and effort providing data. Statistics NZ is very appreciative of the these contributions. 

Comparison with previous censuses

A Census of International Trade in Services and Royalties was also conducted in 1992, 1999, and 2005. Each census used a June year reference period, to allow comparability over time.

Export and import values are in current prices, so no adjustment is made for price changes. This means the increase in the export and import of commercial services since 2005 reflects increases in both prices and volumes. More useful conclusions about the series over time can be made by: assessing the relative importance to New Zealand's international trade in commercial services to total services, and examining the contribution of specific commercial service types to total commercial services. Several new service classifications were collected within the 2011 Census including: environmental services, contract manufacturing fees, and emission unit trading.

Since the previous censuses, service definitions and classifications have changed. While the broad categories of service types remain (the EBOPS classification used in the census is an extension of the IMF's Balance of Payments Manual, Edition 5, (BPM5) classification), the 2011 Census questionnaire used more disaggregated and explicit descriptions of services under each category, drawing on the developments in the 2010 Manual on Statistics on International Trade in Services.

Service classifications

The Manual on Statistics of International Trade in Services (MSITS) was originally published in 2002. This manual was a joint production by six international organisations – the United Nations Statistical Commission, the European Commission, the IMF, the Organisation for Economic Co-operation and Development (OECD), the United Nations Conference on Trade and Development, and the World Trade Organisation.

The MSITS was revised and subsequently re-published in 2010 (MSITS 2010). The contents of the new edition of the manual were aligned to the revisions of the sixth edition of the BPM6, the System of National Accounts 2008, and the revised OECD Benchmark Definition of Foreign Direct Investment. MSITS 2010 also includes a new chapter discussing the measurement of services 'modes of supply', in line with information needs related to the General Agreement on Trade in Services (GATS).

The aim of MSITS 2010 is to provide an internationally agreed framework for compiling and reporting statistics on international trade in services. The manual sets out how to collect data so it can inform policy around GATS.

The manual provides a detailed view on international trade in services. The main features of the manual are the classification of services into 12 main types and the introduction of the concept of 'modes of supply'.

The 12 major categories of services are:

  • manufacturing services on physical inputs owned by others
  • maintenance and repair services not included elsewhere (nie) 
  • transport
  • travel
  • construction
  • insurance and pension services
  • financial services
  • charges for the use of intellectual property nie
  • telecommunications, computer, and information services
  • other business services
  • personal, cultural, and recreational services
  • government goods and services nie.

Mode of supply

Modes of supply are statistics that examine where and how an international service transaction takes place. Mode of supply is important as it has implications for free-trade policy. By analysing the mode of supply, trade negotiators can identify strengths and weaknesses within the service sector. 

Estimating the mode of supply for commercial services

Mode 3, Commercial presence, is not relevant to the balance of payments. When a commercial presence is established within a foreign economy, the branch/subsidiary becomes a resident of the foreign economy. All service transactions between the subsidiary and foreign residents are between two non-resident parties. The balance of payments measures transactions between residents and non-residents.

As a result, the Census of International Trade in Services and Royalties only collected information on three modes of supply – cross-border supply, presence of natural persons, and consumption abroad. These three were determined by asking survey respondents to classify their service exports as:

  • delivered from New Zealand to a customer overseas – eg by Internet, phone, or mail (cross border)
  • delivered to an overseas customer by a New Zealand employee temporarily working abroad (presence of natural persons)
  • delivered to an overseas customer temporarily in New Zealand (consumption abroad).

For each export service type and destination, respondents were asked to give a percentage breakdown (by mode) of how the service was performed. This allowed respondents to classify a service as being delivered by more than one mode if necessary. For example, an engineering company may provide technical consulting from New Zealand over the Internet, but also travel abroad to visit the project site.

These mode percentages were multiplied by export revenue to derive the figures presented in tables 8 and 9 of this release. When a respondent did not indicate the mode of supply, the mode was estimated, based on the type of service being delivered.

The service categories used in table 8 are based on the sections in the 2011 questionnaire. The contents of each section are described below.

  • Information and communication technology services – includes computer and communication services (eg IT design, consulting, and support; telecommunication and Internet access services).
  • Financial services – includes asset management fees and financial advisory services.
  • Trade and sales services – includes advertising, merchanting, and contract manufacturing.
  • Business services – includes accounting, legal, consultancy, and management fees between related parties.
  • Entertainment and recreational services – includes motion picture production, radio, TV, and other artistic services.
  • Technical and professional services – includes engineering, technical testing, research and development, mining, and repair services.
  • Intellectual property – includes royalties from software, broadcast rights, musical works, brands, patents, and trademarks.
  • Miscellaneous services – includes education, health, and conference services.
  • Services not elsewhere classified.

Industry classifications used

The Australian Bureau of Statistics and Statistics NZ jointly developed the Australian and New Zealand Standard Industrial Classification (ANZSIC). ANZSIC is used in compiling and analysing industry statistics in Australia and New Zealand, and enhances the comparability of industry statistics between the two countries and the rest of the world.

For more detailed information on the ANZSIC 2006 and 1993 editions, see Industrial classification on the Statistics NZ website.

Confidentiality and accessing the data

Where data within a table in this release discloses information about an individual respondent, or would allow close estimation of such information, we publish data only after obtaining the consent of those respondents (ie published under section 37(4)(a) of the Statistics Act 1975). Where affected respondents have not provided their consent, data remains confidential.

Liability

While all care and diligence has been used in processing, analysing, and extracting data and information in this publication, Statistics NZ gives no warranty it is error-free and will not be liable for any loss or damage suffered by the use directly, or indirectly, of the information in this publication.

Timing

Timed statistical releases are delivered using postal and electronic services provided by third parties. Delivery of these releases may be delayed by circumstances outside the control of Statistics NZ. Statistics NZ accepts no responsibility for any such delays.

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