Prodcom Working Group JMO M2 29-30 November 2012 Item 4b : The PRODCOM package in FRIBS

Organisation of the discussion Brief summary of points presented in the paper Round table 29-30 November 2012 Item 4b : The PRODCOM package in FRIBS

Questions to be addressed in round table Scope of PRODCOM? List to be used (CN / CPA / PRODCOM dedicated list) ? Variables (stocks/fees) ? How to measure completeness of collected data? Sub-contracting (who reports what) ? Deadline & Revision policy Mail with the questions was sent before the meeting 21 Nvember 2013. Last chance to think about for those who have not done it yet. 29-30 November 2012 Item 4b : The PRODCOM package in FRIBS

Item 4b : The PRODCOM package in FRIBS Need to change? PRODCOM Responds to user needs Input for other statistics and statistical indicators Known issues How to report products partially/totally sub contracted Opportunity offered by FRIBS and globalisation measurement challenges Do we really need changes ? Changes would be justify if we are able to solve issues on sub-contracting. From Quality visit and Quality report available we have noted that countries are requesting enterprises much more data than what the PRODCOM requires. We do not want to appear the ones creating burden … if this is not our direct interest. Golabilisation and efficency gains might be trigger to changes. 29-30 November 2012 Item 4b : The PRODCOM package in FRIBS

Item 4b : The PRODCOM package in FRIBS Scope of PRODCOM Domestic production? When data are used for carbon leakage or environmental indicators domestic production is fundamental. Is this reported/collected consistently by enterprise? Coverage of industrial services (more than contract processing? – building/installing plant) New needs Raw materials (production / stocks ?) Bio production Enterprises could easily provide Sold Value and Sold volume. The production figures are likely to be easier to provide for large enterprise. It seems unlikely that enterprise with more than 20 employees do not have IT system… It is true that in some countries the threshold is lowered to less than 5 employees… Comment on industrial services followed discussion made with Austria when comparing SBS and PRODCOM data. It seems that some countries are requesting usage of raw material to be able to build National Accounts. In such case CPA seems to be the list used. It does not help for rare earth. Split between bio and no bio production is not likely to be achieved by introducing new NACE or CPA as this is a transversal characteristics. 29-30 November 2012 Item 4b : The PRODCOM package in FRIBS

Item 4b : The PRODCOM package in FRIBS Lists of Products All have their pros and cons Historical consistency Should this be a regulation or only gentlemen's agreement? CN CPA PRODCOM Nice for enterprise doing external trade Fits better Commission needs Fits market study purpose Data for other statistics We have consider that it was fair to assess the list to be used as this was mentioned as an issue in our Quality Visit in Portugal. We have not been able to find convincing figures on share of enterprises involved in externall trade. 29-30 November 2012 Item 4b : The PRODCOM package in FRIBS

Variables (current ones) Sold production: the products manufactured by the enterprise and sold outside the enterprise during the reference period. The value and volume of production of the product should be reported. Total production: volume of the products manufactured during the reference period including those sold outside the enterprise and those retained for reuse by the enterprise as input to the manufacture of other products. 29-30 November 2012 Item 4b : The PRODCOM package in FRIBS

Item 4b : The PRODCOM package in FRIBS Variables (new) 1/2 SOLDVAL – Sold Values: the value of production sold during the survey period. SOLDQNT –Sold Quantities: the volume of production sold during the survey period. PRODQNT – Physical Quantities: Physical volume of actual production during the survey period used (volume sold + volume used in other production or put in stocks) = current concept of Total Production 29-30 November 2012 Item 4b : The PRODCOM package in FRIBS

Item 4b : The PRODCOM package in FRIBS Variables (new) 2/2 STOCKS Volume and Value at beginning of the year Volume and Value at end of the year Valuation of stocks based on price when production occurred or last sold price? Fee Paid / Fee Received Apparently this information that would help assessing quality of data is not easy to get. Furthermore the question of valuation is really tricky. May be only volume would help. Variables on Fees are already collected in some surveys. They are important for National Account purpose. For NA it seems that CPA would be the ideal levelof dis-aggregation. 29-30 November 2012 Item 4b : The PRODCOM package in FRIBS

Coverage of Production Ambiguity with the 90% of the production If you know you have x% of the production you are able to estimate the total. Out of SBS variables (turnover/production, product/services, … )? Means to assess coverage are needed What is the best reference to assess 90% (SBS values?) ? Should we keep 90% ? SBS provide information on Total turnover of enterprise of a specific Nace class. Not all production is done by enterprise of the specific Nace class Not all turnover is constituted by products. 29-30 November 2012 Item 4b : The PRODCOM package in FRIBS

Sub-Contracting /Contract Processing Are there general concerns with all sub-contracting reporting or only with contract processing? Is PRODCOM the right place for fees? If we agree that main issue is the reporting of contract processing, we may be able to propose at least some ways. The fee reporting may better fit the SBS survey. But then the delay of transmission is an issue. 29-30 November 2012 Item 4b : The PRODCOM package in FRIBS

Who reports what ? 29-30 November 2012 Ctry Sold Value Sold Volume Physical Volume Stocks Fee Received Fee paid Principal & contractor in same country Raw Material owned by principal Principal A X   Contractor Raw Material owned by contractor Principal & contractor in different country B Case split with same or different countries. Raw material owned by principal or not Proposal made after discussion with Bulgaria. What is nice is that the domestic/external production is treated consistently 29-30 November 2012 Item 4b : The PRODCOM package in FRIBS

How would this look like? Principal owns the shirts (15 000) and as their owner sells them for 180 000 €. Principal provides Processor shirts, buttons, … and pays 3€ for each finished shirt. Principal Processor Bg company “X” contracts Bg enterprise “Y” to sew 15 000 men’s shirts as provides all necessary raw materials (fabrics, buttons, samples, threads etc.). According to the contract the Principal has to pay for this service 19 000 € as fee.   Roles of these two business partners from Prodcom point of view: Principal manufactures nothing ( Total production=0) owns the shirts and as their owner sells them for 180 000 €. It means that 19 000 € having been paid as fee are included into the Sold Value (he should report Sold production in Value and Volume) Contractor: manufactures these 15 000 shirts (Total production=15 000) receives 19 000 € for this service as fee and knows nothing about the further fate of these shirts (he doesn’t sell them, so he doesn’t have to report Sold production) Ctry Sold Value Sold Volume Physical Volume Stocks Fee Received Fee paid Principal A 180 000 15 000 X   45 000 Contractor 29-30 November 2012 Item 4b : The PRODCOM package in FRIBS

If we collect "physical volume" More or less same concept as Total production now. But T codes represents only 562 codes Probably not directly accessible from business accounting system. 515 codes (out of 3813) without units 29-30 November 2012 Item 4b : The PRODCOM package in FRIBS

Periodicity / Timeliness Annual data 6 month after end of reference period Revision policy First Data T+6 Revised data T + 10 29-30 November 2012 Item 4b : The PRODCOM package in FRIBS

Arrival of revision for 2009 reference year Do not forget that variation of the Sold Values are marginal. 29-30 November 2012 Item 4b : The PRODCOM package in FRIBS

Nov/July revision of 2011 data Nb of Products modified Country Total Which Sold Value Modified Which Sold Quantities Modified diff(val)T/T0 % A 1210 1001 956 342,108,400 0.26% B 267 252 193 6,570,367,000 6.06% C 61 2 60 -377,941,998 -0.03% D 1396 1344 e600 261,476,394 0.33% E 788 717 622 -2,334,642,141 -0.39% F 662 420 e125 1,110,229,959 7.04% G 35 17 850,405,000 0.95% H 24 21 19 758,618,100 0.40% I 393 318 303 1,967,907,446 3.83% J 471 469 377 487,841,242 2.52% TOT modif.   9,636,369,402 0.36% 29-30 November 2012 Item 4b : The PRODCOM package in FRIBS

Questions to be addressed in round table Scope of PRODCOM? List to be used (CN / CPA / PRODCOM dedicated list) ? Variables (stocks/fees) ? How to measure completeness of collected data? Sub-contracting (who reports what) ? Deadline & Revision policy 29-30 November 2012 Item 4b : The PRODCOM package in FRIBS