Information Note on Implications of COVID-19 on the Monthly Services Index May 2021

Monthly Service Inquiry

Data for the Monthly Services Index (MSI) is collected each month from a sample of 2,250 enterprises. Information on the Retail and Motor Trade sectors is taken from the Retail Sales Index sample of approximately 1,600 enterprises. The Monthly Services Value Index (MSI) monitors trends in output at current prices of enterprises in the non-financial traded services sector and covers services provided by businesses both to individual consumers and to other businesses.

Response Rates

Despite difficult circumstances, many enterprises have continued to supply us with information on a monthly basis and we wish to thank all survey respondents for their ongoing support. The response rate for the May 2021 MSI has returned to pre-COVID-19 levels. The provisional index for each month is subject to revision in the following month as additional information from late respondents is obtained.

COVID-19 restrictions - May 2021

On 30th December 2020, the Government agreed to move the entire country to Level 5 lockdown from midnight until 31st January 2021 at the earliest. All non-essential retail and services closed from 6pm on 31st December. Further measures were announced on 6th January. Restrictions related to non-essential retail and selected services were gradually lifted during the course of May 2021 with hairdressing and other personal services opening in the beginning of May and non essential retail allowed to fully reopen on 17th May. Certain sectors such as accommodation and bars remained closed in May.

In May 2020 services rose by 3.6% compared to the previous month and declined by 19.3% compared to May of the previous year (2019). In May 2021, services output decreased by 0.7% compared to the previous month on a seasonally adjusted basis, resulting in an annual increase of 18.6%. Caution should be exercised when interpreting this annual change, as the comparison is with a low base from a year ago. The value of services output in May 2021 was 4.3% lower when compared to May 2019.  Many sectors have yet to return to pre-pandemic levels of May 2019.

Imputation

The Monthly Services index is based on a matched sample of enterprises in consecutive months. Imputation is not normally carried out for smaller enterprises which have not returned data. In each sector several key companies are identified based on their significance to the sector (turnover). If key company data is not received on time for the Provisional results, an estimate is derived for the current month using trends shown by responding enterprises in the same sector and, in certain cases, using auxiliary data sources.

These auxiliary data sources were also used to validate the results for May 2021. The CSO is satisfied that this range of auxiliary information supports the trends shown in the Monthly Services Index for May.

The auxiliary sources used for imputation and validation purposes included:

• Published media and research reports on the services sector for May
• Government guidelines and announcements on restrictions and essential retail/services under the different Levels (1-5) of Ireland’s Plan for Living with COVID-19
• Websites of large services enterprises, for information issued by non-responding companies about closure, continuation of trade, online trade, etc
• Data from other CSO outputs covering a range of sectors including transport and aviation
• Sectoral data on the numbers availing of support schemes such as the Pandemic Unemployment Payment by sector

Seasonal Adjustment

The patterns since March 2020 have been an exception to the existing seasonal patterns. Seasonally adjusting the Monthly Services Index will continue to be challenging until the scale and shape of the COVID-19 impact on the time series is better understood. The seasonal adjustment models are reviewed each month and have been changed as appropriate. Users should be aware that further observations, as data becomes available in the months ahead, and revisions to the seasonal adjustment models may result in revisions to the seasonally adjusted series.

Thanking Respondents

The CSO wishes to thank all those enterprises who supplied their turnover data for May and urge them to continue to do so for June 2021 and future months. Even if turnover is nil or very low, such information is still needed to measure the trends in the services sector. The CSO will continue to monitor the range of supplementary information described above to derive the best estimate for services turnover in June. The June Monthly Services Index is planned for publication on 3rd August.