Archive:Real estate, renting and leasing statistics - NACE Rev. 1.1
This Statistics Explained article is outdated and has been archived - for recent articles on structural business statistics see here.
- Data from January 2009. Most recent data: Further Eurostat information, Main tables and Database
This article introduces a set of statistical articles which analyse the structure, development and characteristics of the economic activities in the real estate, renting and leasing sector in the European Union (EU). According to the statistical classification of economic activities in the EU (NACE Rev 1.1), this sector covers NACE Divisions 70 and 71, and its activities are treated in more depth in two further articles:
- real estate services (NACE Division 70);
- renting and operating leasing (NACE Division 71).
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Main statistical findings
Structural profile
The number of persons employed by the 1.3 million enterprises active in the EU-27's real estate, renting and leasing sector (NACE Divisions 70 and 71) was EUR 3.3 million in 2005. Within this total, paid employees made up 72.9 % of the workforce, some 13.4 percentage points below the non-financial business economy average (NACE Sections C to I and K). Both subsectors recorded a low share of paid employees (and therefore a high share of working proprietors and unpaid family workers), particularly real estate where the share of paid employees was 69.3 % in 2006, more than 10 percentage points lower than the next lowest share (retail trade and repair) across all of the non-financial business economy NACE divisions in 2005 or 2006. This workforce generated EUR 340 billion of value added in 2006, 6.0 % of the non-financial business economy's total, more than double this sector's 2.6 % (in 2005) share of employment. These remarkable differences result from the capital intensive nature of this sector. In the renting and leasing subsector as well as parts of the real estate subsector (notably letting of own property), enterprises own a good, often of high value, and this good is then rented or leased out to customers. As such, financial costs and depreciation charges may constitute the main element of total costs, neither of which are considered when calculating gross value added.
Real estate (NACE Division 70) accounted for close to four fifths (79.4 %) of the sector's value added in 2006 and a slightly larger share of employment (81.8 %) in 2005. Renting and leasing (NACE Division 71) naturally made up the remainder of the sector, and generated close to one quarter (23.1 %) of the sector's EUR 650 billion of turnover in 2005.
Germany, with EUR 82.1 billion of value added, accounted for the largest share (24.1 %) of the EU-27's real estate, renting and leasing sector in 2006. The United Kingdom had the second largest share (18.6 %) of EU-27 value added in this sector but the largest workforce, 686.3 thousand persons, equivalent to 20.5 % of the EU-27 total in 2005. In terms of its contribution to value added in the non-financial business economy, the real estate, renting and leasing sector represented 12.9 % of the total in Denmark, more than double the EU-27 average and far ahead of the next highest share. In fact Danish specialisation in this sector was so great that this sector was the second largest sector in the Danish non-financial business economy (based on the structural business statistics in Statistics Explained). At the other end of the spectrum, these activities accounted for less than 2 % of non-financial business economy value added in Greece, Slovenia and Bulgaria. In all Member States real estate, renting and leasing accounted for a smaller proportion of non-financial business economy employment than value added.
The regional specialisation of the real estate, renting and leasing sector is shown in the map which is based on the non-financial business economy employment share of this sector. The most specialised regions (at the level of detail shown in the map) were Latvia (considered as one region) and the Algarve (Portugal), followed by inner London (the United Kingdom). Many of the regions least specialised in this sector were Greek, including 10 of the 11 least specialised: these, along with one Romanian region, all recorded 0.5 % or less of their non-financial business economy employment in this sector.
An analysis of the EU-27's real estate, renting and leasing sector in 2005 shows that more than one half (52.4 %) of value added was generated by micro enterprises, namely those with less than 10 persons employed, nearly two and a half times the average share within the non-financial business economy. Large enterprises (with 250 or more persons employed) contributed a particularly low share of value added in this sector. Both subsectors recorded a dominant role for micro enterprises: for real estate the value added share of micro enterprises was 57.1 % in 2006 while for renting and leasing the share was 35.9 % in 2005, the highest and third highest shares among all of the non-financial business economy NACE divisions in 2005 or 2006.
Employment characteristics
The characteristics of the real estate, renting and leasing sector's workforce in the EU-27 were fairly typical of service sectors, in that the shares of male workers and full-time workers were below the non-financial business economy average. Nevertheless, a more complex picture is revealed when analysing the two subsectors that make up the sector. In 2007, according to the Labour force survey, 53.0 % of the persons employed in the sector as a whole were male, some 11.9 percentage points lower than the non-financial business economy average. The proportion of male workers within the renting and leasing subsector was higher, at 67.9 %. In the real estate subsector the male and female shares were almost identical, with the share of male workers below 40 % in Luxembourg, Bulgaria and Slovenia.
In the EU-27 as a whole, full-time employment was notably less common in real estate activities (78.6 %) than in renting and leasing (83.9 %), but this was not the case in all Member States, most notably in Slovenia and Ireland where the incidence of full-time employment was at least 5 percentage points higher in real estate than in renting and leasing.
In terms of age profile, there was a much higher proportion of the EU-27’s real estate, renting and leasing workforce that were aged 50 or over (29.8 %) than the average for the non-financial business economy (21.9 %). This difference reflects, to a large degree, the fact that just under one third (32.2 %) of workers in real estate services were aged 50 or more in 2007. In contrast, in the renting and leasing subsector the proportion of the workforce aged 50 or over was just 18.7 %, and as such below the non-financial business economy average.
Expenditure, productivity and profitability
The two subsectors within the real estate, renting and leasing sector were both relatively capital intensive services, but to quite different degrees. In 2006 gross tangible investment in the EU-27's real estate, renting and leasing sector was valued at EUR 252 billion, equivalent to 74.1 % of the sector's value added. The real estate subsector recorded a lower investment rate, 65.6 %, that was nevertheless more than three and a half times as high as the average rate for the non-financial business economy. The level of investment in the leasing and renting subsector exceeded value added, resulting in an investment rate of 107.1 %. At the NACE division level these were the highest and third highest investment rates recorded within the EU-27's non-financial business economy in 2005 or 2006.
An analysis of expenditure in 2006 shows that personnel costs accounted for 13.3 % of operating expenditure in the EU-27's real estate subsector, and 16.7 % in the renting and leasing subsector, the latter marginally higher than the non-financial business economy average (16.1 %). Average personnel costs were also slightly higher for the renting and leasing subsector than for real estate, but in both cases quite close to the non-financial business economy average. In contrast, the apparent labour productivity ratio was notably greater for renting and leasing than it was for real estate, but in both subsectors this ratio was well above the non-financial business economy average. For the EU-27's renting and leasing subsector this ratio indicated that on average each person employed generated EUR 125.0 thousand of added value in 2005, the fifth highest level for this ratio among the non-financial business economy NACE divisions in 2005 or 2006, and close to three times the non-financial business economy average (EUR 42.3 thousand) in 2005. As noted above, care has to be taken with the ratios based on value added for the renting and leasing subsector, and parts of the real estate subsector: financial costs and depreciation charges may constitute the main costs for these activities and these are not considered when calculating gross value added and the gross operating surplus.
The combination of particularly high apparent labour productivity and slightly higher than average personnel costs led to wage-adjusted labour productivity ratios of 400 % in 2005 for the EU-27's renting and leasing subsector, and 311.9 % for the real estate subsector in 2006, both more than double the non-financial business economy average. These two subsectors recorded the third and sixth highest wage adjusted labour productivity ratios among the non-financial business economy NACE divisions in 2005 or 2006. Every Member State [1] recorded a higher wage-adjusted labour productivity ratio for the real estate, renting and leasing sector than for the non-financial business economy, with Cyprus (2005), Denmark and Austria recording ratios in this sector at least three times as high as their national non-financial business economy average ratios.
The gross operating rate shows the percentage relationship between the gross operating surplus (value added minus personnel costs) and turnover, and is a measure of operating profitability. The gross operating rate of the EU-27's real estate, renting and leasing sector was 39.2 % in 2005, close to four times as high as the non-financial business economy average of 10.0 % in the same year. This rate was high for both subsectors, the second and third highest levels for this rate among the non-financial business economy NACE divisions in 2005 or 2006.
Data sources and availability
The main part of the analysis in this article is derived from structural business statistics (SBS), including core, business statistics which are disseminated regularly, as well as information compiled on a multi-yearly basis, and the latest results from development projects.
Other data sources include the Labour force survey (LFS).
Context
Real estate services and renting and leasing services are provided to households and to business clients. The use of renting or operating leasing can increase financial flexibility, reducing the need to commit own capital, whether for buildings, machinery, equipment or appliances.
See also
- Architectural, engineering and technical services statistics - NACE Rev. 1.1
- Construction statistics - NACE Rev. 1.1
- Construction statistics - NACE Rev. 2
- Housing statistics
Further Eurostat information
Publications
- European Business: Facts and figures - 2009 edition
Main tables
Database
Dedicated section
Notes
- ↑ Bulgaria, Cyprus, Poland and Romania, 2005; Ireland, Luxembourg, Malta, the Netherlands and Sweden, not available.