CHAPTER 4 – Session 10 United Nations Statistics Division/DESA Revision of the Index of Industrial Production (IIP) publication by the UNSD

2 Chapter 4 Summary of chapter:Summary of chapter: This chapter outlines the sources and methods from which an IIP can be compiled.This chapter outlines the sources and methods from which an IIP can be compiled. Section 4.1 presents the variables used to approximate industrial production;Section 4.1 presents the variables used to approximate industrial production; Section 4.2 presents the methods to obtain volume measures. Having outlined the variables and methods;Section 4.2 presents the methods to obtain volume measures. Having outlined the variables and methods; Section 4.3 presents the recommended variables and methods to obtain industrial production volumes; andSection 4.3 presents the recommended variables and methods to obtain industrial production volumes; and The chapter concludes with a discussion on sources of data.The chapter concludes with a discussion on sources of data.

3 Chapter 4 – Recommendations and Feedback General support for the structure and content of chapter 4.General support for the structure and content of chapter 4. Recommendation: Variables to be used to approximate industrial production for the IIP - In general, measures of output (value of output, physical quantity of output) are preferred to input (labor and materials consumed) measures.Recommendation: Variables to be used to approximate industrial production for the IIP - In general, measures of output (value of output, physical quantity of output) are preferred to input (labor and materials consumed) measures. Note – chapter 8 provides detailed industry recommendations which shows in certain circumstances other variables produce sound results.Note – chapter 8 provides detailed industry recommendations which shows in certain circumstances other variables produce sound results. FFEDBACK - Suggestion of additional qualifying text around the use of labour input variables (Stats Can).FFEDBACK - Suggestion of additional qualifying text around the use of labour input variables (Stats Can).

4 Chapter 4 – Recommendations and Feedback Recommendation: Method to achieve volume estimates for the IIP - In general, the deflation process with the use of an appropriate price index is recommended.Recommendation: Method to achieve volume estimates for the IIP - In general, the deflation process with the use of an appropriate price index is recommended. FFEDBACK - This was generally accepted with some additions required to explain the reasons for the recommendation (additions to para US)FFEDBACK - This was generally accepted with some additions required to explain the reasons for the recommendation (additions to para US)

5 Chapter 4 – Recommendations and Feedback Recommendation: Deflator to be used to achieve volume estimates from value data - The PPI is recommended as the price index to be used by countries when current price values are deflated to achieve volume measures of output for the IIP.Recommendation: Deflator to be used to achieve volume estimates from value data - The PPI is recommended as the price index to be used by countries when current price values are deflated to achieve volume measures of output for the IIP. FEEDBACK suggests this recommendation is supported.FEEDBACK suggests this recommendation is supported.

6 Chapter 4 – Recommendations and Feedback Recommendation: Level at which to apply deflator - It is recommended the deflator be applied to the value data at the ISIC class (4-digit) level in order to obtain a volume estimate for use in the compilation of the IIP. The detailed PPI used for deflation should be defined as closely as possible to the respective product groups for which it is being used as a deflator and that it (the deflator) should be applied at the ISIC class (4 digit) level.Recommendation: Level at which to apply deflator - It is recommended the deflator be applied to the value data at the ISIC class (4-digit) level in order to obtain a volume estimate for use in the compilation of the IIP. The detailed PPI used for deflation should be defined as closely as possible to the respective product groups for which it is being used as a deflator and that it (the deflator) should be applied at the ISIC class (4 digit) level. FEEDBACK suggests this recommendation is supported.FEEDBACK suggests this recommendation is supported.

7 Chapter 4 - Discussion Are there any comments on the suggested additions to chapter 4:Are there any comments on the suggested additions to chapter 4: Suggestion of additional qualifying text around the use of labour input variables (Stats Can).Suggestion of additional qualifying text around the use of labour input variables (Stats Can). Additional explanation needed for recommending the deflation method.Additional explanation needed for recommending the deflation method.