Bar chart Distribution by modes of supply 2023

Services by Mode of Supply (MoS)

Services are more difficult to trade across borders than goods or securities, as producers and consumers often have to come together. This explains why services account for almost 80 % of gross national income (GNI), but only around 25 % of cross-border trade. Free trade agreements such as the General Agreement on Trade in Services (GATS) are aimed at reducing trade barriers.

In 2023, most services were provided directly across borders. This is reflected in receipts of €295 billion and expenditure of €281 billion. Consumption abroad was significantly lower, with receipts of €65 billion and expenditure of €115 billion. The presence of natural persons played an even smaller role, accounting for €38 billion in receipts and €33 billion in expenditure. Commercial presence data for 2023 are not yet available.

The importance of the different modes of supply varies widely across partner countries and depends on the structure of the services traded. For example, traditional travel destinations have a higher “consumption abroad” share, as tourists travel abroad to use services there.

Explanation

Statistics on services by mode of supply have been prepared since the 2023 reporting year and are generally published by the Bundesbank eleven months after the end of a year.

The statistics provide information on how the service was supplied. There are four different modes.

Mode 1: Cross-border supply

The service is delivered from one country to another without the service provider or the recipient physically entering the other party’s country. One example of this is the provision of consultancy services by telephone or over the internet.

Mode 2: Consumption abroad

Here, the recipient of the service travels to the country of the service provider in order to consume the service there. A typical example is travel, where tourists travel abroad to consume services such as accommodation and meals.

Mode 3: Commercial presence

The service provider establishes an affiliate, a subsidiary or a joint venture abroad in order to offer services there. One example is a German bank that creates a subsidiary in another country and supplies services there through that subsidiary.

Mode 4: Presence of natural persons

This is the temporary presence of one country’s natural persons in another country to provide services there. An example is an engineer who is temporarily sent to another country for a project.

	Imports	Exports
Mode 1: Cross-border provision	Foreign service provider supplies a service to a German. Both remain in their own countries.	German service provider supplies a service to a non-resident. Both remain in their own countries.
Mode 2: Consumption abroad The consumer of the service moves	German consumer goes abroad to obtain the service (travel).	Foreign consumer comes to Germany to receive the service
Mode 3: Commercial presence	Enterprises resident abroad and controlled by Germany provide services abroad.	Enterprises domiciled in Germany that are controlled by non-residents provide services in Germany.
Mode 4: Presence of natural persons Service provider moves.	Foreign service provider (natural person) goes to Germany to provide a service there.	German service provider (natural person) goes abroad to provide a service there.

The dataset for these statistics will be expanded in the coming years. In future, Mode 3 will also be plotted and the information on a broader set of countries will be made available.