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2.1.1.1 Industry (Division)
In 2014, there were approximately 21,000 Manufacturing, Mining and Quarrying establishments (self-employed or establishments with employees). The largest number of establishments was found in Manufacture of furniture (18%), and in Manufacture of fabricated metal products, except machinery and equipment (17%). The smallest number was found in Manufacture of other transport equipment (0.2%).
The total number of jobs in Manufacturing, Mining and Quarrying industries in 2014 was 362,000. The industry with the largest number of jobs was Manufacture of computer, electronic and optical products (approximately 18% of all jobs in Manufacturing, Mining and Quarrying industries), whereas the industry with the smallest number of jobs was Manufacture and processing of leather and related products (0.4%).
The highest output was found in Manufacture of petroleum products, chemicals and chemical products (21% of the total output) and in Manufacture of computer, electronic and optical products (20%), whereas the lowest output was found in Manufacture and processing of leather and related products (0.1%).
The highest value added was found in Manufacture of computer, electronic and optical products (27% of the total value added), and in Manufacture of food products (10%). The lowest value added was found in Manufacture and processing of leather and related products (0.2%).
The percentage of value added in output was 33% on the average. The lowest percentage of the value added in output was found in Manufacture of petroleum products, chemicals and chemical products (13%) and Manufacture of basic metals (19%); the highest percentages were found in the Mining and Quarrying industries (65%) and in Repair and installation of machinery and equipment (51%).
Analysis of the data by industry (division) indicates that output per job was highest in Manufacture of petroleum products, chemicals and chemical products (NIS 3.5 million), and lowest in Manufacture of wearing apparel (NIS 333,000) and in Manufacture of furniture (NIS 376,000).
Value added per job was highest in the Mining and Quarrying industries (NIS 2.2 million, more than 6 times the average), and the lowest was found in Manufacture of wearing apparel (NIS 137,000).
The highest compensation per job was found in Mining and Quarrying industries (NIS 327,000), and the lowest compensation per job was in Manufacture of wearing apparel (NIS 92,000).In 2014, the percentage of profit in the output1 measured for Manufacturing, Mining and Quarrying establishments was 12%.Selected data are presented in Tables E, F, and G.
1 “Profit” includes depreciation and amortization.
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Table E. Selected Data, by Industry (Division) 2014Percentages
Code Industry (division)
Income from manufacturing
activity as percentage of total revenue
Value added as
percentage of total output
Compensation for jobs as
percentage of value added
Consumption of materials
as percentage of inputs
33–05 Manufacturing; Mining and quarrying – total 98.9 33.0 51.7 68.7
09–05 Mining and quarrying 98.6 65.1 15.2 18.9
33–10 Manufacturing – total 99.0 31.7 60.4 69.710 Manufacture of food
products99.6 24.2 61.3 77.0
12–11 Manufacture of beverages and tobacco products
99.0 39.1 49.1 67.2
13 Manufacture of textiles 99.3 27.5 54.8 58.5
14 Manufacture of wearing apparel
99.5 41.1 67.1 52.3
15 Manufacture and processing of leather and related products
99.1 41.9 58.1 57.3
16 Manufacture of wood, cork and straw products except furniture
99.7 30.7 64.2 73.3
17 Manufacture of paper and paper products
98.0 27.2 68.6 69.4
18 Printing and reproduction of recorded media
97.9 43.9 70.0 56.1
20–19 Manufacture of petroleum products, chemicals and chemical products
99.3 13.0 50.0 87.7
21 Manufacture of pharmaceutical products, including homeopathic preparations
99.4 41.2 35.1 35.0
22 Manufacture of rubber and plastics products
97.7 33.1 58.6 74.3
23 Manufacture of other non-metallic mineral products
99.2 26.2 52.0 64.8
24 Manufacture of basic metals 99.7 19.2 64.5 83.4
25 Manufacture of fabricated metal products, except machinery and equipment
99.6 47.4 76.9 62.6
26 Manufacture of computer, 98.4 44.7 58.7 56.1
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electronic and optical products
27 Manufacture of electrical equipment 99.1 31.7 76.4 74.7
28 Manufacture of machinery and equipment n.e.c. 97.2 38.1 61.0 66.7
29 Manufacture of motor vehicles, trailers and semi-trailers 99.1 33.8 91.3 61.4
30 Manufacture of other transport equipment 99.9 44.3 88.1 26.5
31 Manufacture of furniture 98.1 38.5 71.0 67.332 Other manufacturing 98.9 42.4 72.1 60.033 Repair and installation of
machinery and equipment 99.4 51.3 72.8 64.3
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Table F. Establishments, Jobs, Output, Value Added, and Compensation for Jobs, by Industry (Division) 2014
Percentages
Code Industry (division) Establishments Jobs Output Value added
Compensation for jobs
33–05 Manufacturing; Mining and quarrying –total 100.0 100.0 100.0 100.0 100.0
09–05 Mining and quarrying 1.0 1.1 3.7 7.4 2.033–10 Manufacturing – total 99.0 98.9 96.3 92.6 98.0
10 Manufacture of food products 12.0 15.7 13.1 9.6 10.3
12–11 Manufacture of beverages and tobacco products
1.1 1.4 1.3 1.5 1.3
13 Manufacture of textiles 1.8 1.3 1.1 0.9 0.8
14 Manufacture of wearing apparel 4.4 2.0 0.7 0.8 1.0
15 Manufacture and processing of leather and related products
0.8 0.4 0.1 0.2 0.2
16 Manufacture of wood, cork and straw products except furniture
2.7 0.8 0.4 0.4 0.5
17 Manufacture of paper and paper products 1.0 2.1 1.7 1.4 1.7
18 Printing and reproduction of recorded media 7.6 2.7 1.0 1.4 1.7
20–19 Manufacture of petroleum products, chemicals and chemical products
2.2 6.0 20.8 8.2 7.2
21 Manufacture of pharmaceutical products, including homeopathic preparations
0.3 3.5 6.6 8.3 5.1
22 Manufacture of rubber and plastics products 3.4 6.0 4.5 4.5 4.6
23 Manufacture of other non-metallic mineral products 5.5 2.8 3.5 2.8 2.5
24 Manufacture of basic metals 1.7 1.9 2.4 1.4 1.6
25 Manufacture of fabricated metal products, except machinery and equipment
16.7 10.8 5.4 7.8 10.5
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26 Manufacture of computer, electronic and optical products
2.6 18.2 19.9 27.0 27.8
27 Manufacture of electrical equipment 1.5 2.7 1.6 1.6 2.1
28 Manufacture of machinery and equipment n.e.c. 3.5 5.1 4.3 5.0 5.3
29 Manufacture of motor vehicles, trailers and semi-trailers
0.5 1.5 0.8 0.8 1.3
30 Manufacture of other transport equipment 0.2 4.2 3.1 4.2 6.4
31 Manufacture of furniture 17.9 4.8 1.8 2.1 2.6
32 Other manufacturing 7.9 3.8 1.6 2.1 2.7
33 Repair and installation of machinery and equipment 3.6 1.1 0.5 0.7 0.9
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Table G. Selected Data of Sales, Administration and General Expenditures,(1) by Industry (Division), 2014
PercentagesCompensation
for jobs in sales and
administration as percentage
of total compensation
for jobs
Compensation for jobs in sales and
administration as percentage of total sales
and administration expenditures
General inputs, as
percentage of total revenue
from manufacturing
activity
Industry (division)Code
29.540.16.4Manufacturing; Mining and
quarrying – total33–05
18.416.16.2Mining and quarrying09–0529.740.86.4Manufacturing – total33–1040.035.27.5Manufacture of food products10
56.031.810.2Manufacture of beverages and
tobacco products12–11
32.439.63.9Manufacture of textiles1364.048.710.8Manufacture of wearing apparel14
49.340.812.3Manufacture and processing of
leather and related products15
36.137.47.7Manufacture of wood, cork and
straw products except furniture16
26.742.16.0Manufacture of paper and paper
products17
37.652.08.7Printing and reproduction of
recorded media18
32.332.73.2
Manufacture of petroleum products, chemicals and chemical products
20–19
37.221.417.6
Manufacture of pharmaceutical products, including homeopathic preparations
21
29.839.75.9Manufacture of rubber and plastics
products22
29.540.95.1Manufacture of other non-metallic
mineral products23
25.743.43.1Manufacture of basic metals24
44.268.75.6
Manufacture of fabricated metal products, except machinery and equipment
25
19.044.85.3Manufacture of computer,
electronic and optical products26
31.149.95.5Manufacture of electrical equipment
27
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29.545.86.3Manufacture of machinery and
equipment n.e.c.28
23.051.59.3Manufacture of motor vehicles,
trailers and semi-trailers29
8.752.23.2Manufacture of other transport
equipment30
36.542.010.7Manufacture of furniture3134.039.411.5Other manufacturing32
45.858.39.1Repair and installation of
machinery and equipment33
(1) After deduction of commissions for sales in Israel and export commissions.
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2.1.1.2 Research and Development
There were 488 establishments that reported on research and development activity.1 Those establishments provided 141,000 jobs (approximately 39% of the total jobs in Manufacturing, Mining and Quarrying); their output amounted to approximately 44% of the total output in these industries, and their value added was approximately 56% of the total value added. It should be noted that exports comprised approximately 76% of the sales from manufacturing activity in these establishments, whereas the proportion of exports for all Manufacturing, Mining and Quarrying industries amounted to 45%. Value added constituted 42% of the output in these establishments, and it exceeded that of the other establishments, in which the gross value added comprised 33% of their output on the average.
The net total research and development expenditure in Manufacturing, Mining and Quarrying amounted to approximately NIS 12 billion in 2014 (after deducting subsidies).2 The leading industries in research and development were: Manufacture of pharmaceutical products, including homeopathic preparations; and Manufacture of computer, electronic and optical products, in which 81% of the total expenditure for research and development and 89% of the total R&D subsidies were invested. These industries contributed 55% of the output and 59% of the total value added in Manufacturing, Mining and Quarrying.
2.1.1.3 Export-Intensive Establishments3
There were 1,067 export-intensive establishments. The percentage of the value added in the output of these establishments (33%) was equal to the percentage in all Manufacturing, Mining and Quarrying industries. The percentage of profit in the output of export-intensive establishments (13%) was slightly higher than the percentage recorded in all Manufacturing, Mining and Quarrying industries (12%). However, the percentage of compensation for jobs in the value added of export-intensive establishments (56%) was slightly lower than in all Manufacturing, Mining and Quarrying industries (57%).
For selected data on the components of output and value added in manufacturing and in export-intensive establishments, see Table H, and Table 3 in the Tables section.
1 In some Manufacturing establishments, research and development activity is included in production costs and is not regarded as a separate item in the profit and loss report.
2 A special survey on the expenditures for research and development by manufacturing establishments revealed similar expenditures.
3 See definition in Section 3.1.7.
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Table H. Components of Output and Value Added in Total Manufacturing,Mining and Quarrying and in Export-Intensive Establishments 2014
Export-intensive establishments
Manufacturing, Mining and Quarrying
Output and Value
1312Percentage of profit in output
3333Percentage of value added in output
5657Percentage of compensation for jobs in value added
3937Percentage of profit in value added
Of all Manufacturing, Mining and Quarrying establishments operating in the economy in 2014, there were approximately 153,000 jobs in export-intensive establishments (42% of all jobs in Manufacturing). The share of those establishments amounted to approximately 98% of the sales of manufacturing exports, approximately 61% of the total annual manufacturing output, and approximately 62% of the total value added.
2.1.1.4 Comparison of the Data Presented in this Publication (Manufacturing, Mining and Quarrying Survey) with Current Data Indices
The data on revenue presented in the Manufacturing, Mining and Quarrying Survey are at basic prices, and do not include export expenditure and agents’ commissions. The current monthly data (in the framework of the Manufacturing, Mining and Quarrying indices) are at purchaser’s prices (including taxes and VAT, and not including subsidies). For the purpose of comparison, the monthly data were adjusted to basic prices (VAT and other taxes were deducted, and subsidies were added). In the financial statement data, non-industrial revenue was deducted, and export expenditure as well as commissions that were deducted in the data processing stage, were added. Table I presents differences between annual data in the Manufacturing, Mining and Quarrying Survey and the current indices based on monthly data.
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Table I. Manufacturing, Mining and Quarrying Survey Data and CurrentManufacturing Indices Data, 2014
NIS million
Revenue and
Compensation for jobs
Manufacturing, Mining and Quarrying Survey data
(annual data)2014
Current Manufacturing indices (annual sums based on
monthly data)2014
Revenue (at basic prices) 376,065 378,214
Compensation for jobs 69,046 64,764
The above table reveals that although there was a difference of less than 1% in revenue between the data in financial statements and the monthly series data, there was a difference of approximately 7% in compensation for jobs. That difference can be attributed to adjustments in the financial statements (e.g., imputations for accumulated vacation, special payments, bonuses, and wages of managers). Moreover, the data on compensation for jobs in the Manufacturing, Mining and Quarrying Survey include wages of kibbutz members and imputation of wages for non-employee jobs.1
1.1.2 Manufacturing industries2 (Section C)
1.1.2.1 Sector
The division of manufacturing establishments by sector was prepared in accordance with the requirements of the System of National Accounts 2008.3 The requirements were formulated jointly by five international institutions: the UN, the IMF, the OECD, Eurostat, and the World Bank.
Classification of each dealer by sector was determined by control of shares in the company.
The definition of households4 included individuals who function as consumers or as entrepreneurs who produce market goods. Corporations with at least 50% of their shares under government ownership were classified as government corporations.
Selected data on Manufacturing establishments by sector are presented in Table J and in Tables 11–16 in the Tables section.
1 See the definition of “Compensation per job” in Section 3.2.2 Manufacturing industries only (Divisions 10–33), excluding Mining and Quarrying
(Divisions 05–09).3 European Commission, International Monetary Fund, United Nations, World Bank
and Organization for Economic Cooperation and Development (2009). System of National Accounts – 2008. New York: Author.Retrieved from: http://unstats.un.org/unsd/sna2008.asp.
4 See definition in Section 3.1.4.
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Table J. Selected Data, by Sector 2014
House-holds
Cooper-atives
Foreign controlled private corporations
National private corporations
Government corporations
Manufacturing (Section C)
Selected Data
Percentages
Percentages
PercentagesPercentagesPercenta
gesPercentagesPercentages
55.31.11.741.80.1100.0Establishments4.75.516.865.27.8100.0Jobs1.15.921.265.16.7100.0Output1.34.827.656.89.5100.0Value added0.14.631.154.89.4100.0Exports
38.025.841.327.745.131.7
Percentages of value added in output
0.834.165.537.764.544.8Share of exports in total revenue
NIS thousand at current prices
NIS thousand at current prices
NIS thousand at current prices
NIS thousand at current prices
NIS thousand at current prices
NIS thousand at current pricesNIS thousand
at current prices
232.2
1,061.01,247.8988.3839.9988.3Output per job
88.3273.4515.4273.4378.9313.4Value added per job
48.4154.8238.7164.6400.4189.4Compensation per job
1.1.2.2 Size Group
Number of Jobs per Dealer (Establishment)
In 2014, approximately 20,000 establishments (94%) had less than 50 jobs, which amounted to approximately 28% of all jobs in Manufacturing. The findings indicate that on the average, output per job increased with the size of the establishment, and ranged from approximately NIS 524,000 in establishments with up to 49 jobs, to NIS 1.4 million in establishments with over 250 jobs.
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In the group of small establishments (up to 49 jobs), the average value added per job (NIS 170,000) was lower than the average in Manufacturing (NIS 313,000), and compensation per job (NIS 112,000) was also lower than the average (NIS 189,000).
In 2014, the percentage of the profit in the output was 11% for total Manufacturing. Establishments with more than 250 jobs recorded the highest percentage of profit (12%), whereas the lowest percentage of the profit (8%) was recorded for the group of establishments with 50–99 jobs.
The distribution of establishments and jobs by number of jobs per dealer (establishment) is presented in Table K and in Tables 17–22 in the Tables section.
Table K. Selected Data, by Size Group of Jobs per Dealer (Establishment) 2014
No. of jobs per dealer
(establishment)
250+ jobs
No. of jobs per dealer
(establishment)
100-249 jobs
No. of jobs per dealer
(establishment) 50-99 jobs
No. of jobs per dealer
(establishment)Up to 49
jobs
Manufactu-ring
(Section C)
Selected Data
Percentages
Percentages
PercentagesPercentages
Percentages
Percentages
1.02.43.093.6100.0Establishments
38.721.112.527.7100.0Jobs
56.320.38.714.7100.0Output
57.019.18.915.0100.0Value added
72.218.15.83.9100.0Exports
32.129.832.332.331.7Percentage of value added in output
12.410.48.49.211.1Percentage of profit in output
58.139.529.311.844.8Share of exports in total revenue
NIS thousand
, at current prices
NIS thousand, at current
prices
NIS thousand, at current
prices
NIS thousand, at
current prices
NIS thousand, at current
prices
NIS thousand, at current prices
1,438.3950.7689.9524.2988.3Output per job
462.1283.7223.0169.6313.4Value added per job
262.8176.3155.8112.3189.4Compensation per job
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Revenue per Dealer (Establishment)
In 82% of the manufacturing establishments, the annual revenue was less than NIS 5 million, whereas most of the jobs (61%) were in establishments with high revenue levels (over NIS 50 million). Those establishments also contributed approximately 84% of the output and 81% of the value added. For selected data by size groups of total revenue per dealer (establishment), see Table L and Tables 23–28 in the Tables section.
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Table L. Selected Data, by Size Groups of Revenue per Dealer (Establishment) 2014
Total annual
revenue per
dealer (establishment)
(NIS Million)
50+
Total annual
revenue per
dealer (establishment)
(NIS Million) 20-49.9
Total annual
revenue per
dealer (establish
ment)(NIS
Million) 5-19.9
Total annual
revenue per
dealer (establish
ment)(NIS
Million) Up to 4.9
Manufac-turing (Section C)
Selected
Data
Percentages
Percentages
Percentages
Percentages
PercentagesPercentages
4.43.89.882.0100.0Establishments 61.112.513.013.4100.0Jobs
84.26.65.73.5100.0Output
81.07.86.64.6100.0Value added
95.92.51.20.4100.0Exports
30.737.136.642.131.7
Percentage of value added in output
11.79.57.08.311.1
Percentage of profit in output
51.116.79.64.644.8
Share of exports in total revenue
NIS thousan
d, at current prices
NIS thousan
d, at current prices
NIS thousand, at current
prices
NIS thousand, at current
prices
NIS thousand, at current
prices
NIS thousand, at current prices
1,359.7524.6436.5259.4
988.3Output per job 415.0194.4159.7109.
3313.4Value added
per job 237.3135.2127.581.5189.4Compensation per job
1.1.2.3 DistrictEach Manufacturing establishment in the sample was classified by the district in which it is located (see Table M). For more comprehensive data on the distribution of Manufacturing establishments by district and sub-district, see Tables 29–33 in the Tables section.
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Table M. Selected Data on Manufacturing Establishments, by District 2014District Judea and
Samaria Area(1)
District Southe
rn
District Tel-Aviv and
Central
District Haifa and Northern
District Jerusal
em
Manufac-turing (Sectio
n C)
Selected Data
Percentages
Percentages
Percentages
Percentages
Percentages
Percentages
Percentages
2.99.847.532.57.3100.0Establishments2.516.735.139.95.8100.0Jobs1.423.428.441.65.2100.0Output1.323.232.636.66.3100.0Value added1.225.627.939.45.9100.0Exports
27.931.536.427.938.631.7Percentage of value added in output
7.815.08.89.619.911.1Percentage of profit in output
37.248.844.142.451.544.8Share of exports in total revenue
NIS thousan
d, at current prices
NIS thousand, at
current prices
NIS thousand, at
current prices
NIS thousand, at
current prices
NIS thousand, at
current prices
NIS thousan
d, at current prices
NIS thousand, at current prices
567.01,382.2
798.41,029.6901.2988.3Output per job158.0435.1290.8287.3347.5313.4Value added per
job 109.6205.3210.0171.7175.7189.4Compensation per job (1) Israeli localities.
1.1.2.4 Technological Intensity
In accordance with the 2011 Standard Industrial Classification, the classification of industries by technological intensity includes only Manufacturing and does not include Mining and Quarrying.1,2 The classification of Manufacturing establishments by technological intensity revealed that most of the jobs in Manufacturing were in industries classified as high technology and low technology (59%). The shares of the
1 For the list of industries by technological intensity, according to the OECD classification, see Appendix 1.
2 See Section 3 – “Terms, Definitions and Explanations”.
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output and value added for those establishments in total Manufacturing were 53% and 63%, respectively. High technology industries include: Manufacture of pharmaceutical products, including homeopathic preparations; Manufacture of computer, electronic and optical products; and Manufacture of air and spacecraft and related machinery. The share of jobs in high technology industries out all Manufacturing industries was 26%, and their share of the output was 31%. The value added in these industries amounted to 42% of the total value added in Manufacturing. High technology manufacturing establishments contributed 52% to the total Manufacturing exports. The percentage of the profit in the output in these industries was 19% (more than 1.5 times the percentage in total Manufacturing, which was 11%). Compensation per job in high technology industries amounted to NIS 290,000 in 2014 – 53% higher than the average compensation per job in total Manufacturing (NIS 189,000), and more than approximately 2.4 times higher than the compensation per job in low technology industries.
Low technology industries include: Manufacture of food products; Manufacture of beverages; Manufacture of tobacco products; Manufacture of textiles; Manufacture of wearing apparel; Manufacture and processing of leather and related products; Manufacture of wood, cork and straw products, except furniture; Manufacture of paper and paper products; Printing and service activities related to printing; and Manufacture of furniture and other manufacturing industries, except Manufacture of medical, dental and orthopedic instruments and supplies. The share of jobs in low technology industries out all Manufacturing industries was 33%, whereas their share of the output was only 23% of the total output in Manufacturing. The value added in these industries amounted to 21% of the total value added in Manufacturing. The percentage of the profit in the output in these industries was 9% (approximately 18% less than the percentage in total Manufacturing).
For selected data on technological intensity, see Table N and Tables 39–47 in the Tables section.
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Table N. Selected Data, by Technological Intensity 2014
Low
technolog
y
Medium-
low
technology
Medium-
high
technology
High
technology
Manufac-turing
(Section C)Selected Data
Percent
ages
Percen
tages
Percentage
s
Percenta
gesPercentagesPercentages
55.531.210.23.1100.0Establishments
33.422.418.126.1100.0Jobs
22.629.517.230.7100.0Output
20.519.217.942.4100.0Value added
6.119.922.251.8100.0Exports
28.720.632.944.031.7
Percentage of value added in output
9.17.17.218.811.1Percentage of profit in
output
11.830.356.977.244.8Share of exports in
total revenue
NIS
thousan
d, at
current
prices
NIS
thousand,
at current
prices
NIS
thousand,
at current
prices
NIS
thousand,
at current
prices
NIS
thousand, at
current prices
NIS thousand, at
current prices
671.81,299.0939.81,158.5988.3Output per job
192.7268.1309.2509.2313.4Value added per job
121.0151.7217.7289.5189.4Compensation per job
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1.1.2.5 Export-intensive establishments, by technological intensity
The vast majority of jobs (84%), output (92%), value added (95%), and exports (99%) in high technology establishments were in export-intensive establishments; and 52% of the jobs, 46% of the output, and 63% of the value added in export-intensive establishments derived from high technology establishments. In low-technology establishments, the situation was the opposite: of those establishments, the export-intensive establishments were only 10% of the jobs, 14% of output and of value added; and 8% of the jobs, 5% of the output, and 4% of the value added in export-intensive establishments derived from low-technology industries (see Table O).
Table O. Selected Data on Export-Intensive Manufacturing Establishments,by Technological Intensity 2014
Low technolog
y
Medium-low technology
Medium-high technology
High technolog
y
Manufac-turing
(Section C)
Selected Data
Percentages out
of all manufact
uring establish
ments
Percentages out of all
manufacturing
establishments
Percentages out of all
manufacturing
establishments
Percentages out of
all manufact
uring establish
ments
Percentages out of
all manufact
uring establish
ments
Percentages out
of all
manufacturing
establishments
10.327.159.484.442.3Jobs
13.660.573.192.361.8Output
13.641.170.394.563.3Value added
85.196.797.799.197.5Exports
NIS thousand
, at current prices
NIS thousand, at
current prices
NIS thousand, at current prices
NIS thousand, at current
prices
NIS thousand, at current
prices
NIS thousand, at
current prices
888.82,902.51,156.51,267.91,443.5Output per job
255.1406.6365.8570.2469.1Value added per
job
137.2181.8268.6316.8270.6Compensation per
job
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1.1.3 Electricity and Water Supply, Sewerage and Waste Management Activities
In 2014, there were 27,000 jobs in the Electricity and Water Supply, Sewerage and Waste Management activities, and their output totaled NIS 43 billion. The gross value added totaled NIS 22 billion, which comprised 51% of the output in these industries. Of this, 12% was compensation for jobs.
The gross value added of the Electricity and Water Supply, Sewerage and Waste Management industries, as measured by the survey, was 2% of the total GDP.
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1.2 BALANCE SHEETS AND FINANCIAL RATIOS
2.2.1 Balance Sheet
Assets: In 2014, the total assets of Manufacturing, Mining and Quarrying establishments amounted to approximately NIS 585 billion (approximately 8% more than the amount in 2013). Current assets comprised 43% of all assets in those establishments; long-term investments and accounts receivable comprised 33%; fixed assets comprised 18%, and the rest were other assets. In companies classified in Electricity and Water Supply, and Sewerage and Waste Management, total assets amounted to NIS 148 billion. Current assets comprised 20% of the assets in those companies; long-term investments and accounts receivable comprised 10%; and fixed assets and other assets comprised 70%.
Liabilities and capital: The distribution of liabilities in Manufacturing, Mining and Quarrying establishments shows that 55% of the liabilities were shareholders’ equity, 27% were current liabilities, and the rest (18%) were long-term liabilities. In companies classified as Electricity and Water Supply, Sewerage and Waste Management Activities, 22% of the liabilities were shareholders’ equity, 17% were current liabilities, and the rest (61%) were long-term liabilities.
1.2.2 Financial Ratios
Current ratio: The highest current ratio in the Manufacturing, Mining and Quarrying establishments was found in Manufacture of pharmaceutical products, including homeopathic preparations (3.7). The establishments in that division were characterized by relatively high rates of current assets.
The lowest current ratio was found in the Manufacture of beverages and tobacco products division.
In Electricity and Water Supply, Sewerage and Waste Management Activities, the current ratio was 1.17.
Equity structure ratio: A high rate of finance provided by foreign debt (financial leveraging) was observed in Manufacture of wood, cork and straw products, except furniture, due to the high deficit in shareholder' equity in this industry.
The lowest rate of foreign debt in manufacturing was found in Manufacture of pharmaceutical products, including homeopathic preparations.
In Electricity and Water Supply, Sewerage and Waste Management Activities, the equity structure ratio was 3.7.
Assets turnover ratio: The assets turnover ratio was highest in Manufacture of furniture, whereas the lowest assets turnover ratio was in Manufacture of pharmaceutical products, including homeopathic preparations.
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In Electricity and Water Supply, Sewerage and Waste Management Activities, the assets turnover ratio was 0.3.
Profitability: The highest operating profit to revenue ratio in Manufacturing, Mining and Quarrying industries was found in the Mining and quarrying industries, whereas the lowest ratio was found in Manufacture of other transport equipment. The highest operating profit to shareholder' equity ratio was found in Manufacture of furniture.
3. TERMS, DEFINITIONS AND EXPLANATIONS
3.1CLASSIFICATION OF THE DATA
3.1.1 Classification by Industry
Data are published at the level of division and at the level of aggregated groups. The aggregation of the groups engaging in similar activities reduces both the bias caused by the mixed activity of some establishments, which makes it difficult to classify them in separate groups, as well as the sampling errors. For technical reasons, the names of the industries were abbreviated in the Introduction and in the Tables.
The classification of establishments by industry is based on the Standard Industrial Classification of All Economic Activities, 2011. (see Appendix 1).
3.1.2 Classification by Technological Intensity
The classification of establishments by technological intensity was based on the main activity and on the industrial classification of each establishment (see Appendix 1).
3.1.3 Classification of the Survey Data by Size Groups
The purpose of the classification is to present a distribution that portrays the distribution of small, medium, and large dealers in every industry.For some industries, size groups were combined due to considerations of statistical confidentiality.
3.1.3.1 Classification of the Survey Data by Size Group (Number of Jobs per Dealer), and by Industry (2011 Classification)
Every establishment was classified into a size group according to the number of jobs in 2014, as follows:Up to 4 jobs (also including dealers for which a National Insurance file was not received and that are not self-employed)5-9 jobs10-19 jobs20-29 jobs30-49 jobs50-99 jobs100-249 jobs
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250 jobs and more.
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3.1.3.2 Classification of the Survey Data by Size Group (Revenue per Dealer), and by Industry (2011 Classification)
Each establishment was classified into a size group according to the total revenue of the establishment in 2014, as follows:NIS 0-4.9 millionNIS 5-9.9 millionNIS 10-19.9 millionNIS 20-29.9 millionNIS 30-49.9 millionNIS 50 million and more.
3.1.3.3 Comparisons by year
The distribution of survey data by size groups must be examined separately each year. Comparisons of data over several years cannot be made due to year-to-year changes in the composition of groups.
3.1.4 Classification by Sector
Manufacturing establishments were classified by sectors according to the requirements of the System of National Accounts 2008, as determined by five international institutions: the United Nations, the IMF, the OECD, Eurostat, and the World Bank.
Classification of each dealer by sector was determined by control of shares in the company.
The division of the economy into sectors makes it possible to include institutions with similar economic behaviour and objectives in the same classification. An institution is an economic unit that is entitled to own assets, take on liabilities, engage in economic activities, and make transactions with other economic units. To aggregate institutional units into sectors, each unit must be classified separately. Classification of each institutional unit into a sector is based on control of shares in the company. The accounts by sector provide information about the distribution of income in the economy, about the activity of financial corporations, etc.
The purpose is to prepare a system of accounts for the investigated industries by sector.
There are five sectors in the economy:
(1) Non-financial corporations
(2) Financial corporations
(3) General government
(4) Private non-profit institutions
(5) Households.
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All five sectors represent the overall economy.
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This publication, which covers all Manufacturing, Mining and Quarrying industries as well as Electricity and Water Supply, Sewerage, Waste Management and Remediation Activities, presents the following:
(1) Non-financial corporations
(2) Households.
Non-financial corporations are corporations that deal with production of goods and/or non-financial services that are traded on the market.
Households are individuals or groups of individuals that function as consumers or as entrepreneurs that produce market goods and services (market producers), and the liability of those entities is not limited. The present survey deals only with households that function as entrepreneurs.
The dealers in the sample were divided into two groups:
1. Dealers whose identification number is their identity card (self-employed). These dealers were classified as households, except those with a high revenue and large number of jobs, which were classified as private corporations.
2. Dealers that are registered corporations or partnerships, whose identification number begins with “5”, were classified as non-financial corporations.
Dealers in non-financial corporations were divided into the following sub-sectors:
1. Government corporations
2. National private corporations
3. Foreign-controlled private corporations
4. Cooperatives.
Corporations with 50% of their stock under government ownership and 50% under private ownership were classified as government corporations.
Corporations with 50% of their stock under foreign ownership and 50% under Israeli ownership were classified as private corporations under foreign ownership.
3.1.5 Classification by District and Sub-District
Each dealer in the sample received a district and sub-district code, according to the address of the establishment.
3.1.6 Classification by Locality
Each dealer in the sample received a locality code, according to the address of the establishment.
3.1.7 Export-intensive Establishments
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Export-intensive establishments are those that export over 50% of value of their total revenue, and/or those whose exports amount to over NIS 10 million, where the revenue from exports is over 25% of the total revenue of the establishment.
3.2PRODUCTION ACCOUNT / PROFIT AND LOSS STATEMENT
The production account is the starting point for the development of accounts of business units and sectors, and describes how income is generated, structured and utilized. Responsibility, control, and management of production activity is assumed by an institutional unit that uses inputs such as labour, capital, goods and services for the production of goods and services. In the Manufacturing, Mining and Quarrying Survey publication, the production account is based on a summary of the profit and loss statements. The production account is used to calculate gross value added, which consists of gross output less inputs.
Profit and loss statement – The purpose of the profit and loss statement is to show the profit from the establishment’s current activities during the year. The statement includes income data in the year under review from sales to the local market and from exports, as well as from the value of work and repairs performed by the establishment using the materials of the ordering party, and from other sources. The expenditure data relate to expenditures connected with production (cost of sales), expenditures connected with sales, management and financing, and other expenditures. Income after deduction of expenditure reflects the establishment’s profit (or loss) in the reported year. The profits appearing in the tables in this publication include depreciation and amortization.
Total revenue consists of the following items:
a. Total industrial revenue:
1. Sales to the local market includes revenue from sales of the establishment’s products to the local market, and revenue from exports to the Palestinian Authority, less purchase tax and commissions to agents in Israel, and with the addition of participation from the Chief Scientist in R&D expenditures, as well as the value of manufacturing assets for own use.
2. Sales for export include revenue from sales of the establishment’s products for export, less export commissions.
3. Income from services, work and repairs includes export of services, work and repairs.
b. Total non-industrial revenue includes income from renting out buildings and equipment, and other income. Capital gains are not included.
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Establishment expenditures consist of the following items:
a. Cost of sales: This item includes various expenditures related to production, such as compensation for jobs, purchase of materials, maintenance and repairs, fuel and electricity.
b. Research and development expenditures: For establishments in which research and development is conducted, this item includes: compensation for jobs of R&D personnel, use of raw materials, work carried out by sub-contractors, and other expenditures related to R&D. Some of the profit and loss statements include R&D expenditures in “cost of sales”. In this publication, we did not relate separately to these R&D expenditures, because there was no way of completely separating them from the rest of the expenditures included in cost of sales.
c. Sales expenditures include all expenditures related to the sale of the products, such as: compensation for jobs of sales workers, office maintenance, and advertising.
d. Management expenditures and general expenditures include all expenditure items related to managing the establishment: compensation for jobs of managers and clerks, telephone expenses, and legal expenses. Occasionally, there is no distinction in the profit and loss statement between sales, management and general expenditures, and all of these are recorded in one item.
e. Financing expenditures: Payments made by establishments for credit, such as: interest, linkage differences, rate differences and bank commissions. Net financing expenditures are financing expenditures less financing income.
f. Other expenditures: Expenditures that were not recorded in the previous items. In most cases, this item includes balance cancellation, loss of capital, and loss due to disposal of assets.
Operating profit is derived from a profit and loss statement of manufacturing establishments and is computed as the difference between total income and total expenses of the establishment (before financing expenses are subtracted). This figure does not include return on capital.
Gross output of Manufacturing, Mining and Quarrying industries: Industrial and non-industrial revenue, with the addition of the value of the change in the inventory of finished and unfinished goods, excluding taxes and less the value of goods that were not processed, and including subsidies and export incentives.
Inventory: Goods produced during the period of the report or in a previous period, which are stored for purpose of sales, for use in the production
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process, or for other uses afterwards. The value of inventory is specified below:
a. Inventory of materials – materials stored in the inventory of the establishment, for use as intermediate inputs in the production process.
b. Inventory of unfinished products – products which have not yet been completed by the date of the report.
c. Inventory of finished products – finished products owned by the establishment on the date of the report, which had not yet been sold by the date of the report.
d. Inventory of products for sales that were not processed – products that were purchased by the establishment for the purpose of sales, and did not undergo further processing.
Adjustment of the prices of inventory data: The value of the change in inventory (i.e., the value of the additions to the inventory minus the value of withdrawals and minus the value of recurrent losses of goods stored in the inventory during the period of the account) reflects, in addition to the physical change in the inventory, capital gains or losses, caused by price changes between the beginning and the end of the year. Because the survey aimed to present the establishments’ activity without these capital gains or losses, the inventory data were adjusted. In the process of adjustment, the value of inventory at the beginning of the year and at the end of the year was calculated at mid-year prices. The difference between the adjusted value of inventory at the beginning of the year and the adjusted value at the end of the year reflects the physical change in the inventory that year. It is estimated at average prices of that year, and can be compared with other data that represent the economic activity of the establishments such as revenue, purchases and compensation for jobs.
The value of the inventory was adjusted to the average prices of that year on the basis of the Consumer Price Index at the level of an individual establishment and for each type of inventory – products, finished products, unfinished products, and raw materials.
Materials include raw materials, auxiliary materials, and packaging materials.
Other input in the manufacturing process includes all inputs that are not components of the value added. (components of the value added include: compensation for jobs, depreciation, royalties and municipal taxes), and these appear in the profit and loss statement under the items “cost of sales” or "R&D expenditures".
General input includes all inputs that are not components of the value added (components of the value added include: compensation for jobs, depreciation, royalties and municipal taxes), and that appear in the profit and loss statement
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under sales and administration expenditures and general expenditures, or other expenditures. These inputs are after deduction of agents’ commissions and export commissions, and include transport expenses.
Input (intermediate consumption): The value of the goods and services consumed as inputs in the process of production, excluding fixed assets whose consumption is recorded as consumption of fixed capital. The goods or services may change in the production process.
Gross value added is the total gross output after deduction of total inputs.
Data at purchasers’ prices and at basic prices: The data on gross value added are presented in the publication twice:
a. At purchasers’ prices – including taxes and excluding subsidies and export incentives.
b. At basic prices – excluding taxes and including subsidies and export incentives.
Employee jobs: All jobs of people appearing on the payrolls as employees, as well as jobs of members of cooperatives, and jobs of workers from the Judea and Samaria Area. Jobs of kibbutz members who work in an establishment and appear on its payrolls are defined as employee jobs, even if their wages are transferred to the kibbutz and not to them. Kibbutz members are not defined as employees in the monthly data of the manufacturing indices framework. This figure does not include jobs of workers hired through employment agencies.
Jobs: Employee jobs, owners, and unpaid family members.
Compensation per job – wages and salaries, and supplementary expenses for wages: Includes all the taxable sums (before deductions) appearing on the payrolls for employee jobs, and all of the expenditures made by the establishment that relate to hiring people for employee jobs and do not appear on the payrolls.The expenditures appearing on the payrolls include: basic wages, allowances (cost of living, vocational, seniority, travel, premiums, bonuses), payments for overtime, absence days (such as vacation, illness, and holidays), recreation allowance, “13 th month” salary, vehicle maintenance (including imputation of employer’s vehicle which is at the disposal of the employed person), telephone, clothing, food and lodging (only if taxable), and payments in kind (such as meals, gifts, and housing).
Supplementary expenses for wages include the establishment’s expenses related to hiring employees that do not appear on the payrolls. These expenses include: payments to the National Insurance Institute and payments to the Mivtahim fund and equalization funds, to pension funds, to provident and compensation funds, and to provident schemes of banks, as well as parallel tax, employers’ tax, severance pay and pension (if paid by the employer on his own account), managers’ insurance, employers’ insurance, education and proficiency allowance, expenditures for transportation of workers, and expenditures on maintenance of dining facilities for
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workers. Employers’ savings loans are not included. Nor do these expenses include wages of workers hired through employment agencies, an expenditure recorded as payments for outside work.
When the annual financial statement is closed, compensation for jobs also includes special wage supplements such as an imputation of accumulated vacation, as well as bonuses and charges for stockholders which are presumably not included in current monthly data. Therefore, the figures on compensation for jobs obtained in the survey are generally higher than those obtained in the monthly summary report of manufacturing indices. Additionally, the survey data include wages of kibbutz members who were defined as having employee jobs even though they are not defined as such in the current indices.
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3.3BALANCE SHEETS
The balance sheet data are presented in reported (nominal) values according to Accounting Regulations Nos. 12 and 17 of the Israel Accounting Standards Board.
3.3.1 Structure of the Balance Sheet
3.3.1.1 Assets
Current assets: This item includes assets that presumably will become cash within the coming year, cash and cash equivalents, short-term investments, accounts receivable, debitory balances, and inventory.
Long-term investments and accounts receivable: The long-term investments and accounts receivable item includes investments of more than a one-year term – investments in subsidiaries and affiliated companies, long-term investments in securities (shares and bonds), excess earmarking of reserves, long-term debts, etc.
Other assets: Includes intangible assets such as goodwill, patents, and copyrights.
Fixed assets: Includes physical assets such as land, buildings, machinery, motor vehicles, equipment, computers and software. Fixed assets are shown at cost, adjusted for inflation until 2003 (since 2004 the new assets which were purchased are shown in nominal values), and with deduction of accumulated depreciation.
3.3.1.2 Liabilities and Shareholders’ Equity
Current liabilities: Liabilities due within one year of the balance sheet date. They include short-term loans, suppliers and other accounts payable, notes and checks due, expenses payable, income received in advance, customer payments received in advance, current maturity of long-term loans, etc.
Long-term liabilities: Liabilities due more than one year after the balance sheet date. They include loans from various sources such as banks, interested parties, subsidiaries and affiliated companies, bonds issued by the company, owners’ loans and reserves.
Shareholders’ equity: The company’s equity (paid-up share equity) and equity reserved for various purposes. Equity item also includes surpluses, i.e., net undistributed profit.
3.3.2 Financial RatiosThe analysis includes four types of financial ratios: liquidity, equity structure, operating efficiency and ratios measuring earnings.
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3.3.2.1 Liquidity RatiosLiquidity ratios examine the company’s ability to meet its liabilities in the short-term. Our analysis included two ratios – the current ratio, and the quick ratio.
3.3.2.2 Equity Structure RatiosEquity-structure ratios examine the establishments’ sources of finance. We examined three ratios: debt to the total assets (financial leverage), the ratio complementary to it – shareholder' equity to the total assets (financial strength) and debt to shareholder' equity.
3.3.2.3 Operating Efficiency RatiosThese ratios examine how effectively the establishments utilized the various assets available to them. One ratio was examined: the assets turnover ratio. The higher the revenue turnover relative to assets turnover, the greater the efficiency.
3.3.2.4 Profit RatiosWe examined three ratios that measure profits: operating profit to revenue examines the marginal profit from each sheqel of revenue; operating profit to shareholders’ equity examines profit on investments of shareholders’ equity; and operating profit to assets examines the rate of profit obtained by the establishments from all funding sources – i.e., shareholders’ equity as well as foreign debt.
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Revenue
Revenue is derived from the profit-and-loss statements, and includes the incomes of the businesses minus capital gain. In financial ratios revenue is recorded only for dealers for which a balance sheet was reported or imputed.
Operating Surplus
Operating surplus is derived from a profit-and-loss statement, and is calculated as the difference between total revenue and total expenses, before funding expenses are subtracted. This figure does not include capital gain. In financial ratios operating surplus is recorded only for dealers for which a balance sheet was reported or imputed.
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4. SOURCES OF THE DATA
Sources of the Data for the Production Account and the Balance Sheet:
a. Data on revenue based on reports to the VAT authorities.
b. The number of employee jobs, based on reports of employers to the National Insurance Institute.
c. Financial statements for the 2014 survey year and their appendices. The statements were collected from income tax files at all branches of the Income Tax authorities in Israel, and the establishments themselves.
d. Financial statements for the 2014 tax year as reported online to the Tax Authority using Form 6111.
The uniform reporting requirements for financial statements on Form 6111 applied to all business owners, other than exceptions such as banks, insurance companies and farmers. In addition, the full reporting requirement does not apply to small dealers that have turnover of less than NIS 300,000.
A file containing the data of dealers as reported on Form 6111 for 2014 was received from the Tax Authority in the framework of the survey on all industries in the economy. Statements of dealers whose data were received in the file were not collected from the Income Tax files of the local income tax officers.
Sources of the Data for Gross Fixed Capital Formation
a. Explanations of the fixed assets in the balance statement. This explanation includes the reduced cost at the beginning of the year, annual additions for fixed assets, and annual depreciation. Notably, the item fixed assets appears as the amount accumulated since the business was established, whereas capital formation is the addition of the same year to the fixed assets.
b. Form 11 – A report on the details of the assets for which it is possible to claim depreciation. This report includes acquisition of fixed assets during the survey year.
c. Cash flow statement – The purpose of this statement is to provide information on the establishment’s cash receipts and payments during the accounting year. Based on this report, it is possible to isolate the information on acquisition of fixed assets during the survey year. For establishments that did not provide a cash flow statement, the amount of additional capital formation in 2014 was imputed. Capital formation in 2014 was not imputed for self-employed persons who did not have cash flow statements and for whom the information on capital formation could not be isolated.
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5. METHODOLOGY
5.1 THE SURVEY POPULATION
The data in this publication are based on a summary of a 2014 survey of all industries in the business sector. The survey population included all active dealers in 2014 who were classified in the following industries: Agriculture, Forestry and Fishing; Manufacturing, Mining and Quarrying; Electricity and Water Supply, Sewerage, Waste Management and Remediation Activities; Construction; Wholesale and Retail Trade and Repair of Motor Vehicles; Services (General); and other industries as defined in the Standard Industrial Classification of All Economic Activities, 2011. The data on Manufacturing, Mining and Quarrying industries and the data on Electricity and Water Supply, Sewerage and Waste Management Activities in this publication relate to some of the industries examined in the survey.1
The survey population did not include the following: 1) Dealers in the Diamonds industry, where manufacturing activity is
combined with commercial activity and there is no way of separating the two types of activities.
2) Non-profit institutions.
To draw the sample, it was necessary to use a list of all the establishments belonging to the survey population (henceforth “the frame”). The source for building the sampling frame was the Business Register established at the Central Bureau of Statistics. The Register includes combined information from two administrative sources:
1. The monthly file of dealers and the annual file of partnerships from the VAT authorities.
2. The file of deductions from the National Insurance Institute.
The administrative sources provided the information relevant for planning the frame. That information included descriptions of the activities of the dealers, which served as the basis for classifying the economic industries (according to the Standard Industrial Classification of All Economic Activities, 2011) as well as current quantitative data on revenue and employee jobs.
The investigation unit, which is also the reporting unit, is the “establishment” – an economic unit (e.g., a mine, a factory, or a workshop) that produces or manufactures products and/or provides industrial services (e.g., repair of machinery). In this sense, an establishment is generally located on one site and engages in one economic activity. According to this principle, departments of an establishment were also defined as separate establishments if each of them engaged in a different type of
1 See: Central Bureau of Statistics (2017). Survey of Industries 2014. Publication No. 1698. Jerusalem: Author.
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manufacturing or provided a different type of service, on the condition that the department kept accounts that enable separate statistical reporting. It should be noted that departments functioning as auxiliary units and serve only the establishments themselves were not defined as establishments. Nor were they treated as separate investigation units (for example, a carpentry shop that serves the needs of a metal establishment, or a workshop that maintains the equipment of a textile establishment). When departments were incapable of reporting separately on the major topics of investigation (number of employees, wages, revenue, etc.), the establishment was considered one investigation unit.
5.2 THE SURVEY PERIOD
The survey relates to the 2014 fiscal year (from 1 January to 31 December). A few of the reports related to other periods, and the financial data of those dealers were adjusted to the prices of the survey year.
5.3 THE SAMPLE
The sample of industries for 2014 covers all industries in the economy (excluding Diamonds). The sample for the Manufacturing, Mining and Quarrying Survey was part of the sample of dealers in the Survey of Industries in the Business Sector.
5.4 SAMPLING METHOD
The sampling frame of the Manufacturing Survey is drawn from the Business Registry of the CBS. The frame includes all the active dealers according to VAT sources, excluding dealers in the diamonds industry.
The frame was divided into sampling industries. Each sampling industry in the frame was stratified by revenue, separately for dealers that submitted Form 6111, and for those who that did not submit it. In each sampling stratum, a simple random sample without replacement was drawn. Each year the frame is updated and the dealers are allocated anew to the size strata according to the revenue data from the last year. Following this, the sampling strata and probabilities are updated and a sample is drawn again, preserving the continuity of the sample as much as possible.
The dealers with the highest revenues in each industry (in the highest sample stratum) are sampled with certainty. Dealers employing more than 250 persons were sampled with certainty as well, even if their revenue was relatively low.
The 2014 sample is statistically independent of the previous one.
The industry sample was intended to efficiently estimate the total revenue, and not particularly the number of dealers. Therefore, it was expected that more exact estimates would be obtained for the revenue (or other variables correlated with revenue), less exact estimates of the number of jobs, and even less exact estimates
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of the number of dealers. Because of this, in this publication, the estimate of number of dealers is not presented broken down by group.
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5.5 ESTIMATION
The data (either original or imputed) on each dealer were multiplied by its weighting factor. The weighting factor of a dealer is the inverse of the sampling probability, and expresses the number of dealers that the dealer in the sample represents (the weighting factor of a “take-all” establishment is 1). The weighted data of the business are calculated as the data of the dealer multiplied by the weighting factor. All the estimates were based on the weighted data.
5.6 IMPUTATIONS FOR DEALERS THAT DID NOT REPORT IN THE SURVEY
Two types of imputations were carried out for profit and loss data:
A. Imputation for dealers that did not report in the survey for various reasons.
To carry out these imputations, administrative data available at the CBS were used: VAT revenue (or tax turnover) data were used to impute total income; compensation for jobs was imputed on the basis of data on wages from the National Insurance Institute with the addition of other work expenses; and data on other expenses by type as well as data on profits were imputed on the basis of the distribution of similar dealers in the industry or the distribution of the same dealer obtained for the previous year.
B. Imputations for compensation for non-employee jobs, among self-employed dealers.
In cases where compensation for jobs was not listed in profit and loss statements, it was assumed that the dealer is not an employee. Therefore one job was imputed, and compensation for jobs was imputed according to the average for that industry in the survey.
Two main types of imputations were carried out for the balance sheet data:
A. Imputation of reported data for establishments that only provided a nominal report. The data published in the balance sheets are reported data. In the statements that included only nominal data, the figures were adjusted according to the ratio of the reported and nominal items in statements that contained adjusted and nominal data – by industry and revenue size groups.
B. To impute balance sheets for establishments that did not provide any information, the missing establishments were divided into size groups by revenue and industry. Because each establishment has revenue data from a profit and loss statement, we multiplied revenue by the revenue-to-assets ratio found in the group of establishments that submitted balance sheets for the current survey. In that way, we computed the assets for each group of industries and for each size group. After the total assets were estimated, the other balance sheet components
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were calculated by applying the proportions found in the data of the establishments that submitted balance sheets.
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One imputation was carried out for data on fixed capital formation:
For dealers that did not submit financial statements, the added capital formation was imputed. However, the information on capital formation for self-employed dealers who did not have balance sheets could not be isolated. Hence their capital formation was not imputed.
5.7 RELIABILITY OF THE DATA
a. Because the estimates are based on a sample, there is a discrepancy between the estimates and the “census value”, i.e., the data that would have been obtained in a census. These deviations are referred to as “sampling errors”.
b. For dealers that did not report in the survey, imputations were conducted. The imputations deviate from the “true” figures, which are unknown.
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