Services by Mode of Supply (MoS)

Bar chart Distribution by modes of supply 2024

Importance of services in cross-border trade

Services are more difficult to trade across borders than goods or securities, as producers and consumers frequently have to meet in person. 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 like these.

Data availability and time reference

Data are currently available up to 2023 for the indirect supply of services via subsidiaries. Data for 2024 are already available for direct modes of supply (cross-border supply, consumption abroad, presence of natural persons).

Indirect supply via subsidiaries (commercial presence)

Services are supplied on a large scale indirectly by subsidiaries in the partner country (“commercial presence”). In 2023, this mode of supply accounted for around 59 % of total services turnover on the receipts side and 46 % on the expenditure side. In nominal terms, this corresponds to receipts of €646 billion and expenditure of €417 billion. This means that a large part of the international supply of services is handled by subsidiaries domiciled abroad. Data for 2024 are not yet available for methodological reasons.

Direct modes of supply in 2024

As regards direct modes of supply, most services were provided across borders in 2024, i.e. producers and consumers remained in their respective countries. This mode of supply is reflected in receipts of €365 billion and expenditure of €338 billion.

“Consumption abroad” (e.g. tourism, study abroad) was significantly lower, with receipts of €73 billion and expenditure of €133 billion. “Presence of natural persons” (temporary secondment of service providers abroad, e.g. advisers, fitters) played an even smaller role, with receipts of €36 billion and expenditure of €43 billion.

Differences by partner country

The importance of the different modes of supply varies widely across partner countries and depends on the structure of the services traded. Traditional tourist destinations have a particularly high share of the “consumption abroad” mode of supply, as tourists travel abroad to make use of services such as accommodation, food and beverage service activities or leisure activities. In other countries, the commercial presence of service providers plays a particularly important role, for example in financial centres or locations with a strong presence in trade and business-related services (e.g. bank branches, branches of consultancy firms).

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.