1. Prodcom ESTP course 20 - 22 October 2010 The future of Prodcom

2. The need for a new regulation
The current Prodcom regulation dates from 1991
It needs to be brought into line with more modern regulations
Much of it is ambiguous
October 2010
Prodcom ESTP course

3. This list of issues needs to be refined
Issues to be resolved
In November 2009 a possible list of issues to be resolved was presented to the Prodcom Working Group
This list of issues needs to be refined
Each of the issues needs to be addressed, to find agreement on how to resolve it.
October 2010
Prodcom ESTP course

4. Issues to be resolved What is Prodcom for?
How do we define what Prodcom is measuring?
Who should report production by a subcontractor?
Should the value and volume be coherent?
What criteria should be used to assess coverage?
How should we deal with long manufacturing chains
The 1% rule
The burden imposed by the Prodcom survey
Quality
October 2010
Prodcom ESTP course

5. To measure the manufacturing activity of enterprises?
1. What is Prodcom for?
To measure the manufacturing activity of enterprises?
To record the value and volume of goods produced?
To measure the contribution of manufacturing to the economy?
Something else?
October 2010
Prodcom ESTP course

6. 2. How do we define what Prodcom is measuring?
Sold production: production
Sold production: sales
Production intended for sale
Total production
Stock movements
October 2010
Prodcom ESTP course

7. 3. Who should report production by a subcontractor?
The subcontractor?
The principal?
October 2010
Prodcom ESTP course

8. 4. Should the value and volume be coherent?
Case of inconsistency:
value of production based on invoices (what is actually sold during the year, including goods taken out of stock)
volume based on what is actually produced in the year
October 2010
Prodcom ESTP course

9. 5. What criteria should be used to assess coverage?
The 90% rule is problematic because:
It does not specify what the 90% should be measured against
If you know that you have achieved 90%, you know what 100% is.
The generally accepted yardstick is turnover of enterprises classified to that NACE class. However a) not all turnover results from manufacturing activity and b) there is a poor correlation between the product code and the NACE class to which the producer is classified
Coverage measured at the level of the NACE class can hide variations at the level of individual products
October 2010
Prodcom ESTP course

10. 6. Long manufacturing chains
Increasingly, a number of enterprises are involved at various stages of manufacture of a product. The final stage that effectively creates the usable version of the product may be quite trivial, e.g. assembly, compression of a powdered drug into a tablet etc.
Should we try to reflect the amount of effort or intellectual and financial capital contributed at different stages of the process?
If so, how?
October 2010
Prodcom ESTP course

11. The regulation should specify what the 1% is measured against
7. The 1% rule
The rule was established when there were only 15 Member States. It is a lot easier to fall below 1% of the production of 27 countries than of 15. Should the percentage be changed?
The regulation should specify what the 1% is measured against
October 2010
Prodcom ESTP course

12. 8. Burden on businesses
The European Commission has been very concerned in recent years about the burden imposed on industry by “red tape”. This applies not only to the burden from statistics but from other regulations.
Should the regulation say something about the burden imposed by the Prodcom survey, and how it can be minimised?
October 2010
Prodcom ESTP course

13. 9. Quality
The regulation will need to specify that a quality report should be sent to the European Council and European Parliament every year, in order to bring it into line with modern standards for EU regulations
October 2010
Prodcom ESTP course

14. Other developments
MEETS (Modernisation of European Enterprise and Trade Statistics): a project to modernise business statistics in the ESS
The Vision paper: a strategy paper looking at how the processing of different statistics should be integrated in future
October 2010
Prodcom ESTP course

15. We will start this during the Prodcom Working Group in November
Next steps
We need to conduct a debate about how these questions should be answered
We will start this during the Prodcom Working Group in November
A new Prodcom regulation needs to wait until it is clear how MEETS and the Eurostat Vision will affect Prodcom
October 2010
Prodcom ESTP course

16. Thank you
October 2010
Prodcom ESTP course