Prodcom ESTP course 20 - 22 October 2010 The future of Prodcom

The need for a new regulation The current Prodcom regulation dates from 1991 It needs to be brought into line with more modern regulations Much of it is ambiguous October 2010 Prodcom ESTP course

This list of issues needs to be refined Issues to be resolved In November 2009 a possible list of issues to be resolved was presented to the Prodcom Working Group This list of issues needs to be refined Each of the issues needs to be addressed, to find agreement on how to resolve it. October 2010 Prodcom ESTP course

Issues to be resolved What is Prodcom for? How do we define what Prodcom is measuring? Who should report production by a subcontractor? Should the value and volume be coherent? What criteria should be used to assess coverage? How should we deal with long manufacturing chains The 1% rule The burden imposed by the Prodcom survey Quality October 2010 Prodcom ESTP course

To measure the manufacturing activity of enterprises? 1. What is Prodcom for? To measure the manufacturing activity of enterprises? To record the value and volume of goods produced? To measure the contribution of manufacturing to the economy? Something else? October 2010 Prodcom ESTP course

2. How do we define what Prodcom is measuring? Sold production: production Sold production: sales Production intended for sale Total production Stock movements October 2010 Prodcom ESTP course

3. Who should report production by a subcontractor? The subcontractor? The principal? October 2010 Prodcom ESTP course

4. Should the value and volume be coherent? Case of inconsistency: value of production based on invoices (what is actually sold during the year, including goods taken out of stock) volume based on what is actually produced in the year October 2010 Prodcom ESTP course

5. What criteria should be used to assess coverage? The 90% rule is problematic because: It does not specify what the 90% should be measured against If you know that you have achieved 90%, you know what 100% is. The generally accepted yardstick is turnover of enterprises classified to that NACE class. However a) not all turnover results from manufacturing activity and b) there is a poor correlation between the product code and the NACE class to which the producer is classified Coverage measured at the level of the NACE class can hide variations at the level of individual products October 2010 Prodcom ESTP course

6. Long manufacturing chains Increasingly, a number of enterprises are involved at various stages of manufacture of a product. The final stage that effectively creates the usable version of the product may be quite trivial, e.g. assembly, compression of a powdered drug into a tablet etc. Should we try to reflect the amount of effort or intellectual and financial capital contributed at different stages of the process? If so, how? October 2010 Prodcom ESTP course

The regulation should specify what the 1% is measured against 7. The 1% rule The rule was established when there were only 15 Member States. It is a lot easier to fall below 1% of the production of 27 countries than of 15. Should the percentage be changed? The regulation should specify what the 1% is measured against October 2010 Prodcom ESTP course

8. Burden on businesses The European Commission has been very concerned in recent years about the burden imposed on industry by “red tape”. This applies not only to the burden from statistics but from other regulations. Should the regulation say something about the burden imposed by the Prodcom survey, and how it can be minimised? October 2010 Prodcom ESTP course

9. Quality The regulation will need to specify that a quality report should be sent to the European Council and European Parliament every year, in order to bring it into line with modern standards for EU regulations October 2010 Prodcom ESTP course

Other developments MEETS (Modernisation of European Enterprise and Trade Statistics): a project to modernise business statistics in the ESS The Vision paper: a strategy paper looking at how the processing of different statistics should be integrated in future October 2010 Prodcom ESTP course

We will start this during the Prodcom Working Group in November Next steps We need to conduct a debate about how these questions should be answered We will start this during the Prodcom Working Group in November A new Prodcom regulation needs to wait until it is clear how MEETS and the Eurostat Vision will affect Prodcom October 2010 Prodcom ESTP course

Thank you October 2010 Prodcom ESTP course