Index of Production - Improvements Introduced, October 2011

In next month's publication the following improvements will be made to the Index of Production:

• A move onto the new 2007 Standard Industrial Classification (SIC07)

• The dataset will be consistent with the Blue Book 2011 publication

• The reference year will be moved forward by two years, so that the latest base year for the chained volume measure of IoP will be 2008

• Methodological improvements (see below).

New Standard Industrial Classification (SIC 2007)

In keeping with EU regulations IoP will be published on a SIC 2007 basis from October 2011. The change in classification is motivated by the need to keep up with changes in the structure of the economy.

The new classification has a small impact on total IoP and a slightly bigger impact on manufacturing. The main changes are:

• Sewerage and waste disposal has been moved from services to sector E

• Recycling has moved from manufacturing to sector E

• Publishing has moved from manufacturing into services.

The presentation of IoP, and therefore the bulletin, will change to four main sectors:

B Mining and quarrying

C Manufacturing

D Electricity, gas, steam and air conditioning supply

E Water supply, sewerage, waste management and remediation activities

Manufacturing will be split into 13 sub sectors:

C Manufacturing

CA Manufacture of food products, beverages and tobacco

CB Manufacture of textiles, wearing apparel and leather products

CC Manufacture of wood and paper products, and printing

CD Manufacture of coke, and refined petroleum products

CE Manufacture of chemicals and chemical products

CF Manufacture of basic pharmaceutical products and pharmaceutical preparations

CG Manufacture of rubber and plastic products, and other non-metallic mineral products

CH Manufacture of basic metals and metal products

CI Manufacture of computer, electronic and optical products

CJ Manufacture of electrical equipment

CK Manufacture of machinery and equipment n.e.c.

CL Manufacture of transport equipment

CM Other manufacturing and repair

Impact

Based on current 2006 weights the loss of recycling and publishing from manufacturing would reduce its weight within production to approximately 69.8% (currently 74.4%).

Based on current 2006 weights gaining sewerage and losing publishing would increase overall productions weight within GDP by 0.3%.

Note that both these estimates exclude any changes made to weights for 2007 and 2008.

Methodological Improvements

The main area of improvement will be the approach to deflation. A more consistent approach across the National Accounts will be introduced for Bluebook 2011 (see Drew S, 2011).

Other changes that effect the Index of Production are covered in the article Blue Book 2011: Improvements to GDP(O), IoS and IoP (see Duff H, 2011).

Source: Office for National Statistics

Background notes

1. Duff H (2011) Bluebook 2011: Improvements to GDP (O). Available at:

   http://www.ons.gov.uk/ons/rel/naa2/second-estimate-of-gdp/q2-2011/art---bb11-improvements-to-gdp--ios--iop.html

   Everett G (2011). ‘Content of Blue Book 2011’, Economic and Labour Market Review, April 2011, Volume 5, No 4, pp 87-85. Available at:

   http://www.ons.gov.uk/ons/rel/naa1-rd/united-kingdom-national-accounts/2011-edition/content-of-blue-book.pdf

   Drew S (2011). Deflation improvements in the UK National Accounts. Non-journal article, ONS. Available at:

   http://www.ons.gov.uk/ons/rel/naa1-rd/national-accounts-concepts--sources-and-methods/august-2011/deflation-improvements-in-the-uk-national-accounts.pdf

2. Details of the policy governing the release of new data are available by visiting www.statisticsauthority.gov.uk/assessment/code-of-practice/index.html or from the Media Relations Office email: media.relations@ons.gsi.gov.uk

   These National Statistics are produced to high professional standards and released according to the arrangements approved by the UK Statistics Authority.