The purpose of harmonised competitiveness indicators (HCIs) is to provide meaningful and comparable measures of euro area countries' price and cost competitiveness that are also consistent with the real effective exchange rates (EERs) of the euro. They are constructed using the same methodology and data sources as the euro EERs.
The HCIs reflect a common understanding between Eurosystem national central banks (NCBs). They complement other competitiveness indicators published by some NCBs, which may follow different methodologies and, in some cases, use different price and cost measures in order to account for the specific circumstances in their countries.
The HCIs are conceptually equivalent to the real EER of a currency. They are calculated on the basis of weighted averages of bilateral exchange rates vis-à-vis the currencies of the trading partners of each euro area country and are deflated by appropriate cost or price indices. The methodology is based on the following elements:
The weights are based on bilateral data on trade in manufactured goods, as defined in Sections 5 to 8 of the Standard International Trade Classification (i.e. excluding agricultural, raw material and energy products) for the periods 1995-1997, 1998-2000, 2001-2003, 2004-2006 and 2007-2009.
The weights incorporate information on both exports and imports. Import weights are the simple shares of each partner country in the total imports. Exports are double-weighted in order to account for “third-market effects”, i.e. to capture the competition faced in foreign markets from both domestic producers and exporters from third countries. The final overall weights of each partner country are obtained as the weighted average of the export and import weights.
Five sets of weights are currently available, based on trade data for the periods 1995-1997, 1998-2000, 2001-2003, 2004-2006 and 2007-2009. The final HCIs result from chain linking, at the end of each period, the indices based on the weights for two consecutive periods. The weights are updated every three years in order to reflect recent developments in the pattern of international trade.
The HCIs based on the GDP deflators and on unit labour costs are compiled vis-à-vis the other 16 euro area countries and the group of 20 trading partners, which comprises the 10 non-euro area EU Member States, Australia, Canada, China, Hong Kong, Japan, Norway, Singapore, South Korea, Switzerland and the United States. The HCIs based on consumer prices are additionally calculated vis-à-vis the other 16 euro area countries and the group of 40 trading partners, which comprises the group of 20 plus Algeria, Argentina, Brazil, Chile, Croatia, Iceland, India, Indonesia, Israel, Malaysia, Mexico, Morocco, New Zealand, the Philippines, Russia, South Africa, Taiwan, Thailand, Turkey and Venezuela.
Non-deflated HCIs are available on the ECB website, in the Statistical Data Warehouse (see http://sdw.ecb.europa.eu/browseSelection.do?DATASET=3&node=6374972).
Indicators based on consumer price indices are the most widely used indicators of price competitiveness since they offer the best data quality and comparability across countries, are available on a timely basis (also for emerging market economies) and are subject to only minor revision. As all Harmonised Competitiveness Indicators they do, however, have a number of drawbacks from a conceptual point of view (e.g. the indicators based on consumer price indices exclude some tradable goods, such as capital goods; they are affected by indirect taxes and subsidies; and they are only indirectly related to production costs). 
Indicators based on unit labour costs usually show some volatility and are subject to more significant revisions, owing to the specificities of the compilation of statistics on wages and employment.
The indicators based on GDP deflators can be affected by the volatility of quarterly GDP series, in particular, for smaller economies. Whole year results may be more reliable indicators of underlying trends. The comparability of these indicators can also be affected by distortions owing to taxes and subsidies.
Overall, comparability across countries can be affected by the inclusion of prices or costs of goods and services that are not internationally tradable, and thus might only indirectly affect the price competitiveness of the export sector.
|De Nederlandsche Bank|| www.statistics.dnb.nl
See Statistical Bulletin, Table 13.1, Economic key indicators for the Netherlands and the euro area, lines 3.1.1 and 3.1.2.
|National Bank of Belgium||Economic Indicators for Belgium http://www.nbb.be/doc/dq/e/dq3/IEE.pdf|
|Banque de France||In English: http://www.banque-france.fr/gb/publications/bulletin/stat_2006.htm
See chapter entitled “Statistics”, Table 4 – “The competitiveness of France’s economy”.
In French: http://www.banque-france.fr/fr/publications/bulletin/bulbdf.htm
See items “Actualités”, part 1 – “La situation économique de la France” and “Statistiques”, figure 4 – “Compétitivité de l’économie française”.
|Banque centrale du Luxembourg|| http://www.bcl.lu/fr/publications/bulletins_bcl/Bull_2005_2/chapitre_1.pdf
See “La compétitivité telle qu’appréhendée par les indicateurs du taux de change effectif réel:mise à jour”, BCL Bulletin 2005/2, p. 40.
See “Can price-cost competitiveness indicators explain export growth?”
|Deutsche Bundesbank||Monthly Report, page 76 in the Statistical Section:
In English: http://www.bundesbank.de/volkswirtschaft/vo_monatsbericht_aktuell.en.php
In German: http://www.bundesbank.de/volkswirtschaft/vo_monatsbericht_aktuell.php
Zeitreihen-Datenbank/Indikatoren der preislichen Wettbewerbsfähigkeit:
|Oesterreichische Nationalbank||Indikatoren der preislichen Wettbewerbsfähigkeit:
In English: http://www.oenb.at/en/stat_melders/datenangebot/preise/preise_wettbewerbsfaehigkeit.jsp#tcm:16-2882
In German: http://www.oenb.at/de/stat_melders/datenangebot/preise/wettbewerbsfaehigkei/indikatoren_der_preislichen_wettbewerbsfaehigkeit.jsp#tcm:14-3552
|Central Bank and Financial Services Authority of Ireland||http://www.centralbank.ie/frame_main.asp?pg=sta_late.asp&nv=sta_nav.asp|
|Bank of Greece|| http://www.bankofgreece.gr/BogEkdoseis/sdos201011.pdf
See Table VI.2, Real Effective Exchange Rate Index, CPI-deflated in the Bulletin of Conjunctural Indicators
|Central Bank of Cyprus||
Publication in Greek: ”Oικονομικό Δελτίο” http://www.centralbank.gov.cy/nqcontent.cfm?a_id=6326&lang=gr
Publication in English: ”Economic Bulletin” http://www.centralbank.gov.cy/nqcontent.cfm?a_id=6326&lang=en
See in Section A entitled: “Macroeconomic Developments and Projections” Part 3 entitled “Domestic Competitiveness and Balance of Payments”, Chart A.25 “Real and nominal effective exchange rates of the Cyprus currency (IMF weights)”.
|Banco de España||Boletín Estadístico, Tables 20.06 and 20.07
In English: 20.6, http://www.bde.es/infoest/a2006e.pdf , 20.7 http://www.bde.es/infoest/a2007e.pdf
In Spanish: 20.6 http://www.bde.es/infoest/a2006.pdf, 20.7 http://www.bde.es/infoest/a2007.pdf
Supplements to the Statistical Bulletin, Balance of Payments (recent releases in PDF format) and Statistical Database (BIP on-line) (full database, downloadable) contain indicators based on producer price indices.
The statistical annex to the Annual Report (Italian unabridged version only) includes indicators based on unit labour costs and on producer price indices.
Methodology: en . it
Economic Bulletin and http://www.bancaditalia.it/pubblicazioni/relann;internal&action=_setlanguage.action?LANGUAGE=en
|Národná banka Slovenska||Monetary Survey (chapter 4.2, table 15) en . sk|
|Suomen Pankki - Finlands Bank||http://www.bof.fi/en/tilastot/indikaattorit/taulukot.htm|
 For details, see "Revisiting the effective exchange rates of the Euro" (ECB, June 2012, 1.5 MB en), "The effective exchange rates of the euro – revised trade weights in the light of global economic integration" (ECB Monthly Bulletin, March 2012, pp. 17-21, 169 kB en), the methodological note concerning section 8.1 of the ECB’s Monthly Bulletin on effective exchange rates (ECB, January 2011, 38 kB en), "The effective exchange rates of the euro following the recent euro area and EU enlargements" (ECB Monthly Bulletin, March 2007, pp 77-79, 2.26 MB en), "The update of the euro effective exchange rates" (ECB, September 2004, 159 kB en) and "The effective exchange rates of the euro" (ECB Occasional Paper No 2, February 2002, 545 kB en).
 Unlike the euro real EER, the HCI for a euro area country is also calculated vis-à-vis the other euro area countries. Within the framework of Economic and Monetary Union, the bilateral nominal exchange rates among the former currencies of the originally participating Member States have been irrevocably fixed since 1999.
 See Section II.3 in ECB Occasional Paper No 2 for a more detailed description of the capturing of third-market effects.
 For a detailed discussion of the merits and limitations of various indicators of cost and price competitiveness, see the article entitled "Developments in the euro area's international cost and price competitiveness" in the August 2003 issue of the ECB's Monthly Bulletin.