Manufacturing StatisticsManufacturing Statistics Maintaining comparability Maintaining comparability

in the changing worldin the changing world

Workshop on Integrated Economic Statistics Workshop on Integrated Economic Statistics

and Informal Sectorand Informal SectorUN Statistics DivisionUN Statistics Division

Teheran, 10-13 November 2007Teheran, 10-13 November 2007

Are Manufacturing statistics still relevant?Are Manufacturing statistics still relevant?

Often cited phrases:Often cited phrases:• ““Manufacturing activities are declining”Manufacturing activities are declining”

• ““The share of manufacturing activities is The share of manufacturing activities is declining and services dominate the declining and services dominate the economic production”economic production”

Are Manufacturing statistics still relevant?Are Manufacturing statistics still relevant?

Share of Manufacturing (Value Added in Const Prices)

0.0%

5.0%

10.0%

15.0%

20.0%

25.0%

30.0%

35.0%

1970

1972

1974

1976

1978

1980

1982

1984

1986

1988

1990

1992

1994

1996

1998

2000

2002

2004

2006

ECO - 4 ECO - 10 Asia World

Growth rate of manufacturing (value added in constant prices)

-10.0%

-5.0%

0.0%

5.0%

10.0%

15.0%

20.0%

ECO - 4 ECO - 10 Asia World

Are Manufacturing statistics still relevant?Are Manufacturing statistics still relevant?

Manufacturing activities are growing Manufacturing activities are growing worldwideworldwide

While services play an increasing role today, While services play an increasing role today, manufacturing as the source of all physical manufacturing as the source of all physical goods remains an essential key component goods remains an essential key component of economic statisticsof economic statistics

Many service industries support Many service industries support manufacturing or are based on goods manufacturing or are based on goods produced by the manufacturing sectorproduced by the manufacturing sector

Manufacturing statistics are a key input into Manufacturing statistics are a key input into the national accounts, but have also the national accounts, but have also important applications in their own rightimportant applications in their own right

Are Manufacturing statistics still relevant?Are Manufacturing statistics still relevant?

Manufacturing sector plays leading role for Manufacturing sector plays leading role for growth in developing countries, while the growth in developing countries, while the services sector does in developed countries, services sector does in developed countries, supported by strong technology-based supported by strong technology-based manufacturing sector.manufacturing sector.

Industrial development is particularly Industrial development is particularly important for economic prosperity because important for economic prosperity because of its technological and high value adding of its technological and high value adding nature and employment effects forward and nature and employment effects forward and backward linkages to other sectors.backward linkages to other sectors.

Are Manufacturing statistics still relevant?Are Manufacturing statistics still relevant?

Need for mfg. statistics at sub-sector levelNeed for mfg. statistics at sub-sector level Not all manufacturing industries have high growth Not all manufacturing industries have high growth

potential, therefore research and policy makers seek potential, therefore research and policy makers seek potential sources of growth, with notions of potential sources of growth, with notions of comparative advantage, competitiveness, productivity comparative advantage, competitiveness, productivity and structural change as such at the sub-sectoral level and structural change as such at the sub-sectoral level becoming relevantbecoming relevant

Demand for internationally comparable data on detailed Demand for internationally comparable data on detailed (structural) manufacturing statistics is increasing more (structural) manufacturing statistics is increasing more than ever for industrial-growth empiricsthan ever for industrial-growth empirics

Statistics need to reflect effects of globalization of Statistics need to reflect effects of globalization of production, such as outsourcing, global supply chainsproduction, such as outsourcing, global supply chains

Available statistics for manufacturingAvailable statistics for manufacturing

Data collection at the international level:Data collection at the international level:• General industrial statistics General industrial statistics (number of (number of

establishments, employment by gender, wages establishments, employment by gender, wages and salaries, output*, value added*, gross fixed and salaries, output*, value added*, gross fixed capital formation)capital formation) (annual, 3 and 4-digit ISIC) (annual, 3 and 4-digit ISIC)

• Index numbers of industrial productionIndex numbers of industrial production(quarterly, 2-digit ISIC; monthly, 1-digit ISIC)(quarterly, 2-digit ISIC; monthly, 1-digit ISIC)

• Commodity production statisticsCommodity production statistics(annual, 600 products; monthly, 15 products)(annual, 600 products; monthly, 15 products)

New ChallengesNew Challenges

Manufacturing technologies and methods of Manufacturing technologies and methods of production have changed production have changed

Manufacturing production has taken on a Manufacturing production has taken on a global character, with production owners, global character, with production owners, production organizers, production contractors production organizers, production contractors and clients located in different parts of the and clients located in different parts of the world (outsourcing, merchanting)world (outsourcing, merchanting)

Specialization in support activities has Specialization in support activities has changed the scope of activities of traditional changed the scope of activities of traditional manufacturing unitsmanufacturing units

Some of these changes impact on time series Some of these changes impact on time series for manufacturing statistics, while others are for manufacturing statistics, while others are not visible in traditional indicatorsnot visible in traditional indicators

We need a consistent approach to:We need a consistent approach to:

Scope of manufacturing activities and Scope of manufacturing activities and productsproducts

Detail of statistics required Detail of statistics required Selection of statistical unitsSelection of statistical units

• problems for continuity of historical time seriesproblems for continuity of historical time series Measurement issuesMeasurement issues

• industry vs. product based measurementindustry vs. product based measurement• measurement of volatile industriesmeasurement of volatile industries• productivity measuresproductivity measures• valuation of outputvaluation of output

Different forms of outsourcingDifferent forms of outsourcing

Consistent approach (cont.)Consistent approach (cont.)

Existing international guidelines:Existing international guidelines:• International Recommendations for Industrial International Recommendations for Industrial

Statistics (IRIS)Statistics (IRIS) Last revision: 1983 (currently under revision)Last revision: 1983 (currently under revision)

• International Standard Classification of All International Standard Classification of All Economic Activities (ISIC)Economic Activities (ISIC)

Last revision: 2007 - ISIC Rev. 4Last revision: 2007 - ISIC Rev. 4

• Central product classification (CPC)Central product classification (CPC) Last revision: 2007 - CPC Ver. 2Last revision: 2007 - CPC Ver. 2

• Manual on index numbers of industrial productionManual on index numbers of industrial production Last revision: 1950 (currently under revision)Last revision: 1950 (currently under revision)

Thank YouThank You