Marcel van Kints United Nations Statistics Division/DESA Revision of the Index of Industrial Production (IIP) publication by the UNSD Marcel van Kints United Nations Statistics Division/DESA

Background Why revise the IIP publication? The most recent UN publication on the IIP was published in 1950; Methods and approaches have changed over time (e.g. fixed weight to chain approaches, etc); and Various related standards and international recommendations have been updated over time (e.g. IRIS, SNA, PPI, classifications). These need to be reflected in updated IIP text. The revision of the IIP has been carried out at the request of the United Nations Statistical Commission.

Process and timetable for revision Discussion of topics/issues at UN expert group meeting in 2005 & 2007 UN IIP country practices questionnaire to all countries – Sept 07 Initial draft and input from countries/organisations – Jan 08 1st draft by the UNSD – April 08 Review of 1st draft by experts (STESWP, UN expert group) – end July 08 Revised draft for expert comment – Sept 08 Worldwide consultation – Oct/Nov 08 Submit to UN Statistical Commission – Mar 09

Objectives of revised IIP publication Outline practical and suitable measurement methods and document issues and benefits from recent theoretical and practical work in the area. It is intended for compilers and users of indices of industrial production. It helps compilers to produce index numbers in comparable ways so they can serve as reliable international comparisons of economic performance and behavior using the best international practices. This publication also assists countries that plan to set up a more comprehensive systems of volume measures by providing not only the methodological foundations for the index number compilation, but also by giving practical guidance on individual steps and elements of the compilation process. It is recognized that due to practical constraints, some of the recommendations in this publication may not be immediately attainable by all statistical offices and, therefore, should serve as guideposts for agencies as they revise and improve their IIP programs.

Key issues/recommendations 1: Publication Structure: Part I includes a description of the international recommendations on index numbers of industrial production, covering the scope of industrial production, fundamental concepts, etc. It is encouraged that countries comply with the recommendations set out in Part I. Part II includes international guidance to assist countries in implementing the international recommendations presented in Part I. It presents a set of methods (categorized as ‘preferred’, ‘alternative’ and ‘other’) and variables for each ISIC Rev. 4 class in-scope of this publication for the compilation of an IIP. This information is based on current country practices that have been surveyed for this purpose and is intended to provide guidance to countries in setting up or revising their IIP calculation.

Key issues/recommendations 2: Statistical units, classifications & business register Recommendations outlining - Statistical Units to use; classifications; use of business registers; and data sources (incl. administrative data sources). 3: Frequency Publication recommends monthly compilation of the IIP so turning points in economic activity can be identified at the earliest possible point in time.

Key issues/recommendations 4: Laspeyres index recommended with annually updated weights Laspeyres recommended; Annual update of weights provides an up-to-date weighting structure for the index. Feasibility? 5: Benchmarking the IIP to the Annual National Accounts Aim to present a consistent picture (annual and sub-annual) about the economy to users. Comments?

Key issues/recommendations 6: Scope of the IIP: Scope is defined to cover activities in sections B through E of ISIC rev.4, i.e. Mining, Manufacturing, Electricity, gas steam and air-conditioning supply, as well as water supply, sewerage, waste management and remediation activities. This scope coincides with the scope of the International Recommendations for Industrial Statistics 2008, which includes the index numbers of industrial production in its list of recommended indicators.

Key issues/recommendations The IIP scope now includes Sewerage and collection and treatment of waste in section E of ISIC Rev.4 – new areas for inclusion in the IIP. In general, the publication lists the following to compile the IIP: a volume indicator (e.g. tonnes of waste) as the preferred approach; a volume indicator (e.g. hours worked) as the alternate method; and A volume indicator (e.g. number of persons employed) as the ‘other method’. Are there better measures for these activities that should be suggested?

Next steps Review of 1st draft by experts (UN Expert Group Meeting on Industrial Statistics in NY July 15-17, 2008) – end July 08 Revised draft for expert comment – Sept 08 Worldwide consultation – Oct/Nov 08 Submit to UN Statistical Commission – Mar 09

Thank you Thank you for your input on the draft IIP text. My contact details if you have any further questions or comments: Email: vankints@un.org