Page - 8 - in The Austrian Business Cycle in the European Context

8 velopments than by weather conditions. Boehm ( 1998) pro- vides clear empirical evidence for the better suitability of pro- duction series adjusted for this primary sector component. • Real value added of manufacturing at market prices in a wider sense. This includes NACE16 C (mining and quarrying), NACE D (manufacturing) and NACE E (electricity, gas and water supply). As all these industries include goods producing activities, this is presumably the aggregate showing the larg- est cyclical variations. For Austria, separate data were avail- able for all three components. • Real value added at market prices for construction (NACE F). • The sum of real value added at market prices of wholesale and retail trade (NACE G), hotels and restaurants (NACE H) and transport and communication (NACE I). Despite the rela- tive heterogeneity of these branches, their total is used, as quarterly data are only available at this level of aggregation. • The sum of real value added at market prices of financial in- termediation services (NACE J) and real estate, renting and business activities (NACE K). Again, only their total is available. This aggregate is selected mainly because NACE K contains the production of business-related services, which is supposed to have risen in cyclical variation, recently. This assumption is based on the fact, that industry has outsourced a large num- ber of services in the last decade and increasingly responds to cyclical bottlenecks in productive capacity by resorting to personnel service agencies instead of recruiting own staff. Consequently, it is to be expected that, while industrial output still shows substantial business cycle variations, value added 16 NACE (Nomenclature d'Activites des Communautes Europeennes) is the harmo- nised framework for classifying branches contributing to GDP in EU member states.