PRODCOM Grant Subcontracting Work Nina Waltner Statistik Austria nina.waltner@statistik.gv.at Vienna June 2019 PRODCOM Grant Subcontracting Work

Types of production (PRODCOM) EA – Own production intended for sale EW – Own production intended for futher processing within the enterprise EI – Own production intended for internal deliveries and performances DL – Subcontracted work carried out as a subcontractor AP – Sold production IL – internal deliveries, transactions and performances VL – subcontraced work carried out by another unit (principal) Total production Sold production

Defintion of subcontracting work Current definition and EUROSTAT proposal for subcontracting work: PRODCOM-report Actual concept Concept with FRIBS subcontractor Subcontracted work carried out as a subcontractor DL Value of subcontracted work = compensation of service according to invoice Subcontracted work carried out as a subcontractor DL + sold production Value of subcontracted work as well als sold production according to invoice. principal Subcontracting work carried out by another unit VL + sold production AP Value of subcontracting work according to current market price of the (sold) product no report!

Sold production with VL/without DL Sold production without VL/with DL CPA-2 Units (KAU) Sold production with VL/without DL Sold production without VL/with DL difference in Mio. Euro in % 06 4 G 07 2 08 253 977 980 -0,3% 09 12 65 0,0% 10 739 12.811 12.843 -0,2% 11 96 5.553 3.009 84,5% 13 127 1.266 1.136 11,4% 14 55 539 339 59,0% 15 26 757 558 35,7% 16 541 7.041 6.985 0,8% 17 113 5.672 5.670 18 191 1.838 1.867 -1,6% 19 5 4.149 20 152 6.982 6.223 12,2% 21 39 2.251 2.749 -18,1% 22 294 5.897 5.945 -0,8% 23 469 5.212 5.237 -0,5% 24 126 15.448 15.509 -0,4% 25 1.076 13.463 13.703 -1,8% 151 6.272 5.940 5,6% 27 210 9.357 9.099 2,8% 28 480 17.163 17.212 29 124 13.082 13.205 -0,9% 30 38 3.495 3.482 0,4% 31 396 2.329 2.331 -0,1% 32 189 3.020 2.885 4,7% 33 643 6.228 6.296 -1,1% B+C 6.551 151.411 147.962 2,3%

EUROSTAT-Grant – Additional survey Objective of this additional survey is to analyse the current unterstanding of subcontracting by our respondents, to clarify uncertainties and if needed correcting our explanations and adopting our help. Maybe we can also clarify some aspects on EUROSTAT-level. Background: According to EUROSTAT-Definitions subcontracted work occurs, when at least 80% of material is provided by the principal. But our experience shows that usually subcontracting work is seen by the respondents on a much wider scale. The additional survey was carried out in December 2018 and February 2019 as a voluntary survey. Depending on the actual production reported by the respondent, different topics were targeted -> 4 different survey parts.

EUROSTAT-Grant – Additional survey Part 1 for respondens reporting only own production and sold production and no subcontracting work. Questions: Is production carried out only within the enterprise? Are materials, plans or patterns provided by others within the production process? Objective of these questions is to look for hidden subcontracted work.

EUROSTAT-Grant – Additional survey Part 2 for repondents reporting subcontracted work carried out as subcontractor. Questions: Is material supported totally, partly or not provided by a principal? If partly, please specify the proportion of own-purchased material? Objective is to see, when respondents use subcontracted work. Do they distinguish between subcontracted work (as defined by EUROSTAT) and subcontracting as it is defined under ISA (no material input).

EUROSTAT-Grant – Additional survey Part 3 for respondents reporting subcontracted work carried out by another unit (as principal) Questions: Is material provided totally, partly or not to another unit? Objective same as within part 2.

EUROSTAT-Grant – Additional survey Part 4 for respondents reporting industrial services (IS). Selection: IS refer to installation, repair and maintenance. IS refer to processing and finishing of materials provided by a subcontractor from own production purchased

First Results - Response Response rate: 22,2 % (mainly in December 2018) corresponding to 2646 units Part1: 2318 units Part2: 135 units Part3: 31 units Part4: 172 units Within part2 to 4 multiple reports are possible.

First Results - Response Results of Part 1 (no subcontracting work, no industrial services) 80 % of the production is only carried out within the enterprise 20 % of the production is not only carried out within the enterprise: Comments: trade, subcontracted work carried out by another unit, production carried out by a subsidiary company. We will have to analyse these reports in detail by contacting the entprises.

First Results - Response Results Part 2 - 135 units and 167 PRODCOM-preports: In 54 % material is provided entirely In 30% material provided partly (50 units): 28 units without specification of percentage, 8 units with 80% and more material provided by a principal 14 units with less than 80% material provided In 11% no material was provided. 5% selected other.

First Results - Response Results Part3: 31 units and 70 PRODCOM-reports 40 units reported material is provided totally 27 units reported material is provided partly 3 units reported material is not provided Results Part4: 172 units – 178 reports: 108 units reported service and repair 18 processing and finishing of material provided by a principal 11 processing and finishing of own produced material 27 processing and finishing of purchased material 14 other

First Results – Main Problems Enterprises do not report subcontracted work. Distinction between subcontracted work (as defined by EUROSTAT) and subcontracting as it is defined under ISA (no material input). In many cases the subcontractor does not know the value of material input and sold value (CPA-guideline of 80% material input) – this is usually only known by the principal. Treatment of service codes (industrial services): Should entprises report subcontracted work within industrial services? When to report production and when industrial services if material is not supported by a subcontractor?

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