EBS Manual Status quo with emphasis on Prodcom related issues Josef Richter, GOPA item 4 of the agenda Prodcom Working Group Meeting October 21, 2013

Structure of the presentation Preliminary remarks Purpose of the EBS Manual Contents of the Inventory - Draft Manual Principles and characteristics of business statistics Scope of business statistics The role of consistency Common methodological elements - cross cutting issues Common business statistics specific methodological elements Domain specific conceptual elements – Prodcom Concluding remarks

Preliminary remarks Objective of the presentation: provide an overview of the general structure of the ‘Inventory - Draft EBS Manual’. Emphasis is laid on the chapters on Prodcom Main objective of the ‘Inventory - Draft EBS Manual’ is to serve as a basis for the discussion in the Working Groups.

Purpose of the EBS Manual EBS Manual is quite different compared to standard Manuals, mainly because the legal basis does not exist at the moment. The accent is on concepts not on processes. The EBS Manual does not cover data requirements.

Purpose of the EBS Manual Two versions Inventory – Draft EBS Manual’ organised according the present statistical domains. Objectives: Explain the present system of business statistics in a systematic form, present the proposal included in the FRIBS packages, identify existing inconsistencies and present proposals how consistency in the system of business statistics could be improved.

Purpose of the EBS Manual Two versions EBS Manual no longer organised according to the present structure by domains. Objectives: Integrate the results from the internal Eurostat discussions and of WG Meetings. Documentation of the definitions and methodological elements at present laid down in existing Regulations which will be repealed by FRIBS. Important role in the FRIBS architecture

Contents of the Inventory – Draft Manual 1 Introduction   1.1 Purpose of the Manual 1.2 Role of the Manual in the FRIBS architecture 1.3 Relation to other handbooks and international standards 1.4 Scope of the Manual 1.5 Structure of the Manual 2 Business statistics 2.1 Introduction – Principles and characteristics of business statistics 2.2 Scope of business statistics 2.3 The role of consistency

Contents of the Inventory – Draft Manual 3 Conceptual framework of business statistics 3.1 Common methodological elements – cross cutting issues 3.1.1 Statistical units 3.1.2 Registers 3.1.3 Classifications 3.2 Common business statistics specific methodological elements 3.2.1 Target populations and frames including thresholds 3.2.2 Characteristics and definitions 3.2.3 Periodicity 3.2.4 Timeliness 3.2.5 Breakdown of results 3.2.6 Classifications (specific)

Contents of the Inventory – Draft Manual 3 Conceptual framework of business statistics 3.3 Domain specific conceptual elements 3.3.1 SBS 3.3.2 FATS .. 3.3.11 Prodcom 4 Sources of inconsistencies – a synoptic overview   4.1 Inconsistencies in closely related fields 4.2 Inconsistencies in the overall system of business statistics 4.3 Inconsistencies in relation to National Accounts

Principles and characteristics of business statistics Business statistics as part of European Statistics (ES) are governed by the principles as laid down in Article 2 of Regulation (EC) No 223/2009 Vision paper: Consistency and coherence (horizontal and vertical) Lower costs for NSIs Reduction in response burden More flexibility Allowing more information (especially on services) to be collected

Principles and characteristics of business statistics Business statistics aim to provide a quantitative description of a specific aspect of reality, namely the economic aspect. Business statistics do not deal with all economic activities in a broad sense, limited to economic activities which are market oriented. Specific feature: business statistics are the results of a process characterized by a high degree of division of labour.

Scope of business statistics In a narrower sense: All characteristics and economic activities of statistical units classified under NACE Rev. 2 B to N and P to S and classified in the institutional sectors S.11, S.12 and S.141 and S.142 (market activities). Business statistics in FRIBS go beyond this narrow definition.

The role of consistency Users’ perspective Coherence is a necessary condition to ensure that information from different statistical sources can be combined in an analysis in a meaningful way. Production side of statistics When two statistical projects are based on the same statistical units, the same reference period, the same coverage and have some of the variables in common which are defined in an identical way, the information collected for the one project might also be used for the second project.

Sources for inconsistencies Inconsistencies which occurred more or less “by accident” ‘Stove pipe’ principle Lack of a ‘blueprint’ Inconsistencies because of differences in the underlying objectives Different analytical orientation Cost considerations Need to reduce the response burden Wish to grant flexibility

Common methodological elements - cross cutting issues Business statistics are based on a number of concepts and methodological elements the relevance of which is not limited to business statistics. Statistical units Business Registers Classification systems

Common business statistics specific methodological elements Target populations and frames including thresholds Characteristics and definitions Periodicity Timeliness Breakdown of results Classifications (specific)

Domain specific conceptual elements – Template Documentation of the present situation Presentation of the proposal included in the FRIBS packages Sources of inconsistencies Proposals for the reduction of inconsistencies

Prodcom Prodcom is of strategic importance. It is one of the backbones of the system of business statistics. Within the system of business statistics it is the only project which provides information on domestic production in a product detail. Prodcom statistics provide an important source for National Accounts, environmental statistics and accounts and are a main source for the compilation of weighting schemes for PPIs.

Sources of inconsistencies – Prodcom Scope – coverage The coverage of the production in manufacturing by products by Prodcom can neither be solely described in a satisfactory way in terms of NACE Rev. 2 nor in terms of CPA. The two criteria to include the production of all enterprises employing at least 20 people but at least 90 % of national production on the level of NACE Rev. 2 class can lead (even within the limits set by the ‘Prodcom list’) to very different degrees of coverage.

Sources of inconsistencies – Prodcom Inconsistencies with respect to National Accounts Statistical units The incomplete and to a high degree undefined coverage both in the NACE Rev. 2 and the CPA dimension cause severe problems for the integration of Prodcom data in National Accounts.

Ideas for the reduction of inconsistencies – Prodcom Statistical Business Registers Clear provisions are required on the basis of which of the (infra-annual) vintages (snapshots) of the Statistical Business Registers the scope of Prodcom has to be defined. Prodcom list – CPA Full consistency should be achieved.

Ideas for the reduction of inconsistencies – Prodcom CPA 22.29.91 Manufacturing services of other plastic products 88170 (*) 22.29.99 Sub-contracted operations as part of manufacturing of other plastic products 88170 (*) Prodcom  22.29.91.10 Plastic parts for machinery and mechanical appliances, excluding internal combustion piston engines, gas turbines 22.29.91.25 Plastic parts for apparatus of HS 85.09 and 85.16 22.29.91.27 Plastic parts for turntables, record players, cassette-players, magnetic tape recorders, other sound or video recording/reproducing apparatus excluding pick-up cartridges Code S

Ideas for the reduction of inconsistencies – Prodcom Scope in the activity dimension Enterprises classified in NACE Rev.2 Sections B and C with more than, but ... Scope in the product dimension Complete representation of the production programme of the enterprises classified in NACE Rev.2 Sections B and C, at least complete representation of CPA Sections B and C.

Prodcom scope – present situation A simplified description with respect to production sold Activities, classified by NACE Rev. 2 ∑ A B C D E F Others Supply Products classified according CPA and Prodcom  

Prodcom scope – future situation Prodcom scope – future situation? A simplified description with respect to production sold Activities, classified by NACE Rev. 2 ∑ A B C D E F Others Supply Products classified according CPA and Prodcom   Output

Ideas for the reduction of inconsistencies – Prodcom Emphasis on production sold In the case of productions that are not finished within the reference period the accent should be laid on production sold. Goods and services purchased in order to be rendered to third parties in the same condition should not be included in the production even if they are not invoiced separately.. Better documentation of definitions, concepts

Key questions Coverage – full coverage of all production activities of units classified in NACE B and C Replacement of the ‘Prodcom list’ changing every year by a CPA compatible “Classification of products of manufacturing“ Enterprise as the only statistical unit Key SBS compatible definitions

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