Friday, January 28

Business Sales Support Strong Recovery

Those interested in monitoring the situation who study the graph that accompanies this article will appreciate the novelty it represents. It is the daily evolution of Domestic sales of large companies and others included in the VAT Immediate Supply of Information (SII) system. There are 61,000 companies with 70% of domestic sales of the total VAT taxpayers. The last three years are included so that the comparison with 2019, a very good year with a normal seasonal pattern, allows a precise analysis of the chronology of the impact of the pandemic on economic activity and the intensity of the current recovery.

The graph is taken from the new weekly daily sales bulletin that the Tax Agency (AEAT) has just released. I have selected the one corresponding to the total of sectors excluding the energy sector (Total without sectors D or Z on page 6) so that the powerful recovery observed since the beginning of October is not too contaminated by the rise in energy prices . The sectoral detail of the bulletin shows that the sales of sector D of electricity and gas have registered a 100% growth in sales since October.

Some aspects stand out. First of all the news of the newsletter, since it shows the daily sales until December 7, two weeks before the publication date. Therefore, this bulletin anticipates 20 days the knowledge of the sales in November that will be made public in mid-January in the monthly bulletin of Sales, Employment and Salaries in Large Companies (VESGE).

Second, the sustained recovery in sales since the beginning of October is confirmed, compared to 2019 sales in blue lines. The Bulletin publishes the growth rates compared to 2020 (orange line in the graph), which go from 13.1% in September to 16.2% in October and 22% in November, as can be seen on page 6.

Third, the chronology and intensity of the impact of the pandemic on sales can be precisely established with a detail of 30 sectors. The graph shows that in mid-March 2020 the SII companies were billing almost 2,500 million euros per day, exceeding the records of 2019, when a collapse began that ends in mid-May with a stabilized daily turnover around 1,700 millions. A drop of more than 30% in 60 days.

Comparing the black (2021) and blue (2019) lines allows us to divide the year 2021 into four periods. From January 15 to the end of March, sales are well below those of 2019 due to the effect of the third wave that reaches the peak of deaths (480 per day by Covid) from February 8 to 10. From the beginning of April to mid-July, sales in 2021 are close to those of 2019 but still at a lower level. From mid-July to the end of September, 2021 sales equal or slightly exceed those of 2019 and as of October 1, a recovery begins that progressively widens the distance with 2019. At the final moment that the report collects (December 7) daily sales (2,980 million) are 15% higher than those of 2019 (2,590 million) and 21% those of 2020 (2,460 million).

As the 2019 and 2020 series illustrate, starting on December 8, a period of extraordinary economic importance begins that will last until January 10. With the next weekly bulletins we will see if these Christmas and New Year sales meet expectations and to what extent they are affected by the sixth wave that is becoming virulent, exceeding 12,000 daily cases, precisely on December 8 – a figure that has grown with subsequently-.

Taking into account the sales of all sectors, including energy, this bulletin (see page 5) shows a 21.9% growth in sales in October and for November the growth rises to 29.8%. In the January-November period, sales growth was 16.7%.

In the arsenal of instruments for monitoring and controlling the economic situation, this bulletin represents an extraordinary technological leap from two perspectives.

From the perspective of the volume of processed information, we could say that we are facing a massive information scenario that represents a change in scale with respect to monthly statistics such as the aforementioned VESGE. As can be seen in the methodology of this new weekly bulletin, the SII system introduced in 2017 by the AEAT to optimize VAT compliance obliges more than 60,000 large companies, which request a monthly refund, to transfer the records of all of them daily to the AEAT. purchases and sales. Each company does not provide the aggregate sales and purchases data for the day as a daily version of the monthly statement, but rather each of the invoices for the day.

From the point of view of the time series process, the daily sales series are dominated by a powerful weekly cycle, variable according to the sector, which is added to the seasonality or annual cycle of the monthly series. In addition, there are some companies that concentrate billing on one or two days a month. All this extremely complicates the extraction of the relevant signal for the analysis of the conjuncture. The graph that accompanies this note is a moving average of 28 terms of the original series corrected for some deterministic effects that are detailed in the methodology. In this way, the powerful weekly cycle and irregular or erratic sales variations are eliminated, providing a good estimate of what we could call the local trend. But to obtain the corrected series of seasonality and calendar effects, which are the most useful, the process carried out by the AEAT SETE is more complicated, as can be seen in the methodology.

If this initiative of the AEAT encourages Social Security to publish a weekly Bulletin with the daily series of affiliation in 2022, it could represent a new stage in the analysis and control of the situation in Spain.

As an illustration of the possibilities that the new source opens, the following graph compares the daily sales from 2019 to 2021 with the daily mortality provided by the Carlos III Health Institute of the Ministry of Health. In this mortality series, the year 2919 also provides the reference for normal daily mortality and the centered moving average of 7 days is represented.

Daily sales and deaths

Source: AEAT

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