Home > Statistics > Wage and salary indices > Concepts and definitions

Concepts and definitions

Adjustment for seasonal variation

Seasonal adjustment means the estimation of seasonal variation and the elimination of its impact from a time series. The obtained result is a seasonally adjusted time series. The trend of a time series is obtained when both seasonal variation and irregular random variation are eliminated from a time series. Trading or working day adjusted series are in turn obtained when the factors caused by the variation in the number of trading days or weekdays is eliminated from the observation of the original time series. The Tramo/Seats method is used for the seasonal adjustment of time series at Statistics Finland. In the Tramo/Seats method, preadjustment is based on a regression model (which allows for outlying observations, public holidays and the weekday structure) and the seasonal adjustment proper on an ARIMA model constructed for the time series.

Annual change

Annual change is the relative change of the index in comparison with the corresponding time period one year ago (e.g. annual change of total index of consumer prices, i.e. inflation).

Base year

Base year refers to the base point in time of a time series. Normally, years divisible evenly by five are used as base years. In releases base year is noted, for example, as 2010 = 100 or 2015 = 100. The mean of the index point figures of a base year is 100. For example, in monthly indices the the index point figures of the months of the base year disclose the distribution of an examined variable between different months.

Growth review

Growth reviews are analyses that provide information in the form of figures, tables and written descriptions about the breakdown of growth in, say, turnover, sum of wages and salaries or number of employees between enterprises. Growth reviews can be used to ascertain how much small enterprises or local enterprises only operating in their own area influence growth in their respective industry or whether the growth originates from just a few strongly expanding enterprises. The share of growing enterprises of all enterprises in the industry can be examined with growth reviews.

Incentive stock options

Conventional incentive stock options refer to a normal stock option arrangement in which an employee has a right based on his/her employment relationship to subscribe in future for the company's or group's parent company's shares under predetermined conditions.

Index

An index is a ratio describing the relative change in a variable (e.g. price, volume or value) compared to a certain base period (e.g. one year). The index point figure for each point in time tells what percentage the given examined variable is of its respective value or volume at the base point in time. The mean of the index point figures for the base period is 100.

Monthly business indicators

Monthly business indicators are index-format indicators describing turnover, exports, sum of wages and salaries and number of employees that are produced monthly and by industry, and are intended to help in the monitoring of business trends. Production of the indicators was started based on the EU regulation concerning short-term business statistics.

Original series

An index series from which the effects of factors not related to production have not been removed. Non-productional factors include variations in the number of working days per month and fluctuations in production caused by seasonal variation.

Panel calculation

Panel calculation refers to a calculation method that is used to produce certain statistics on economic trends. If there is not enough source data for the latest examined time periods, as a rule the statistical units with comparative data for both the examined month and the corresponding month of the previous year are taken into account in the calculation. Data on this population, or panel, are used to calculate the change with which an index can be calculated for the examined point in time from the index of the corresponding point in time in the year before.

Revision

Revision means added accuracy of data. The accuracy of data can increase due to changes in the data that are used in calculations or to the availability of new data.

Sales inquiry

The sales inquiry covers around 2,000 most important enterprises in their respective industries from which data on turnover are collected monthly. In addition, data on the sum of wages and salaries are inquired from around 45 enterprises divided into kind-of-activity units, because these are not available from other sources.

The inquiry does not extend to enterprises operating in financing, the public sector, education or health and social care, because turnover data are not produced for them. The inclusion criterion is the size of the enterprise's turnover relative to the turnover of the respective industry.

Seasonal variation

Seasonal variation is variation in a time series within one year that is repeated more or less regularly. Seasonal variation may be caused by the temperature, rainfall, public holidays, cycles of seasons or holidays.

Seasonally adjusted series

A seasonally adjusted series is obtained when the effect of seasonal variation is eliminated from the original time series. The figures of a seasonally adjusted series are mutually comparable and thus it is meaningful to compare two successive observations. A seasonally adjusted series can be used for detecting short-term developments and significant turns of economic cycles.

Sum of wages and salaries

The wages and salaries sum refers to the sum total of the gross wages and salaries paid to employees without incentive stock options.

Tailored trend indicator service

Tailored trend indicators is a charged information service providing fast data by area on e.g. turnover, exports, wages and salaries or numbers of employees. Additional growth reviews can be produced to elaborate on the factors behind development trends. The data on development in business trends can be supplied to the customers monthly, quarterly or annually as agreed.

Tax Administration's self-assessed tax data

The Tax Administration's self-assessed tax data contain monthly and quarterly information concerning the payment of employer contributions and in respect of the payment of value added tax also yearly data. The observation unit is an enterprise. The self-assessed tax data cover all enterprises and employers paying wages which the tax account reform concerns, in other words, almost the entire entrepreneurial activity in Finland. Self-assessed tax data were formerly called periodic tax return data.

Trading day adjustment

Adjustments for trading days take into account different distributions of weekdays and public holidays in the compared months. Trading days could put the sales of an industry above normal in a certain month if the month concerned contains a higher than usual number of Fridays. In other words, the aim in making adjustments for trading days is to remove calendar effects in order to make the index figures for the corresponding months of different years as comparable as possible. However, adjustments for trading days do not remove the effects of monthly seasonal variation.

Trend

Trend describes the long-term development in a time series. A trend series has been adjusted for seasonal and random variations, so that the effects of e.g. weather conditions or short-term labour disputes do not show in it. By contrast, permanent changes, such as growth in demand due to changed taxation, will show in a trend. The direction indicated by the end of a trend should be interpreted with caution. The latter part of a trend indicator may change once it has been updated with data for subsequent months.

Value index

A value index is a measure (ratio) that describes change in a nominal value relative to its value in the base year. The index point figure for each point in time tells what percentage a given value is at that point in time of its respective value at the base point in time. Thus, in monthly statistics the value index point figure for an examined month describes the percentage share of the value of that month of the average monthly value for the base year.

Wages and salaries

Wages and salaries include compensations in money of all employees of the enterprise for work done during the month. Wages and salaries comprise all income taxes and social security contributions collected from employees as well as diverse additional work (overtime work, night work) bonuses and holiday bonuses. Wages and salaries exclude incentive stock options, expenditure arising from the performing of the work and employer's social security contributions.