PRODCOM methodology Inge Feldbaek, PRODCOM November 2002

Legal texts on PRODCOM The Council Regulation of 1991 The Commission Regulation of 2002 concerning the List The Commission Regulation of 2003 concerning the implementation of survey population, observation unit and coverage

Other legal texts relevant for PRODCOM Council Regulation on Registers, 1993 Council Regulation on Statistical Units, 1993 Council Regulation on Structural Business Statistics, 1996 Council Regulation on Short Term Statistics, 1998 Council Regulation on Intrastat, 1991 The Statistical Law

The Council Regulation does not specify the products to be surveyed is ambiguous on survey field and observation unit is not clear on ‘representativeness’ is aimed at being completed by a manual on methodology and adjusting the definitions of the PRODCOM variables to the ESS

Removing ambiguities Article 2, paragraph 1: Survey population: Enterprises with principal or secondary activities within NACE C, D, E Observation units: Enterprises

Coverage Article 3, paragraph 1: Obligation incumbent on any enterprise that produces products listed in the PRODCOM List

Coverage Article 3, paragraph 2: Data collection shall represent at least 90% of national production per NACE class within sections C, D, E

Coverage Article 3, paragraph 4: Data on a product need not be collected if MS production of the product is less than 1% of the community total BUT such data shall be reported as zero

Data collection Article 5, paragraph 3: Member States may acquire the necessary data using a combination of different sources and methods

Survey population Enterprises classified with activities to NACE classes within C,D,E Identified by the Business Register Structural Business Statistics

Observation unit The enterprise regardless of reporting unit to ensure correct definition of ‘production sold’

Coverage to be interpreted: Total sales of products (PRODCOM) aggregated to a 4 digit CPA class divided by Total production of ‘units’ classified to the same 4 digit NACE class

Coverage in theory Makes sense only if: ‘Units’ are homogenous, i.e. only produces products classified within the 4 digit CPA class, and all production of the products classified within the 4 digit CPA is carried out by these ‘units’.

Coverage in practice 100% homogenous units only exist in theory in practice, even Kind of activity units are not 100% homogenous The ‘90% rule’ must therefore be applied with caution

Rate of Coverage Total sales of the products classified to a certain CPA class divided by Total sales of the products classified to this CPA class regardless of the NACE classification of the ‘units’ producing them

Rate of specialisation Total sales of own products classified to a certain CPA class divided by Total sales of the production of the ‘unit’ classified to the same class (NACE)

Example: Rate of specialisation ‘Unit’, NACE class 1520 : total sales of own products 200 of which Rate of specialisation: 150/200 = 75% i.e. 75% of the ‘unit’s’ production is classified to the same class as the ‘unit’ Secondary production: 50/200 =25%

Example: Rate of coverage Total sales of products produced ‘units’:200 Total sales of products produced by all units:250 Rate of coverage: 200/250 = 80% i.e. 80% of the production of products classified to is produced by ‘units’ classified to 15.20

DK examples: Rate of coverage Quarrying of stone for construction 0% 100% production in Cutting, shaping and finishing … Production of salt100% Rate of specialisation 100% Manufacture of underwear41% Rate of specialisation 70% Manufacture of dyes and pigments87% Rate of specialisation 99% Copper production11% Rate of specialisation 100%

Action plan After discussions with Member States: draft Commission Regulation - approve by MS - legal procedure, 6 months work on manual of methodology - Eurostat recommendations - Member States’ implementations task force on Industrial services - subcontracting - statistical territory

Cost efficient PRODCOM Low burden for the respondents Low burden for Member States Low burden for Eurostat Compared to its usefulness to European and national users