1. 21 th Meeting of the Wiesbaden Group on Business Registers International Roundtable on Business Survey Frames Ana Ma. Landeros México. Noviembre 2008 Reorganization of Manufacturing Sector Statistics due to the Dynamics of its Business Units

2. Contents 1. Characteristics of the Economic Units in the Mexican Manufacturing Sector Introduction 2. Measurement of the Manufacturing Activity 3. Situations affecting the Business Directory 4. Design of a new survey for the Manufacturing Sector Conclusions

3. Introduction The economic units are dynamic, they change: Type of activity Financial structure Organization structure and make: Reengineering Strategic alliances Subcontracting

4. Introduction Then, in order to measure their activity it´s necessary to update: - The instruments of measurement - The organization structure for measurement

5. Characteristics of the economic units It is the economic unit which in a single physical location, built in a permanent place and surrounded by fixed constructions and installations, combines actions and resources under the control of a sole property or controlling unit to perform mainly activities of transformation, fabrication, assembly or processing of one or several products totally or partially on its own or for others. Manufacturing Establishment

6. Characteristics of the economic units Maquila Establishment It is the economic unit which in a single physical location, built in a permanent place and surrounded by fixed constructions and installations, and under a sole owner or control, performs for others industrial or services processes for the transformation, assembly or repair of temporarily imported merchandise which result in the production of goods and services for exportation and/or for sale in the national market.

7. Characteristics of the economic units It’s the generation of goods and services with temporarily imported raw materials which belong to a third party, intended for exportation, under the maquila program established by the Mexican federal government to promote external trade. An enterprise may act as the main plant and another as a branch or else be an independent plant and still perform the maquila process under the program of Incentives for Exportation which offers fiscal advantages to the economic units which decide to become affiliated. Maquila for Exportation

8. Characteristics of the economic units Maquila for Exportation Establishment It is the maquila establishment which has its affiliation to the “Maquila for Exportation Program“ issued by the government.

9. Measurement of the Manufacturing Activity -The Monthly Industrial Survey (EIM). - The Monthly Survey of the Manufacturing for Exportation Industry (EMIME).

10. Monthly Industrial Survey SAMPLE SIZE: 9051 UNIT OF OBSERVATION: Establishments dedicated to the transformation of raw materials Not include: Maquila for exportation enterprises incorporated to the Maquila Exportation Program. MEASURES :Value of the manufactured goods Value charged for the national maquila Value of repairs and maintenance Measurement of the Manufacturing Activity

11. Monthly Survey of the Maquila for Exportation Industry SAMPLE SIZE: 2592 UNIT OF OBSERVATION: all the establishments which adopted the Maquila Exportation Program MEASURES : - Added value - Salaries - Gross profits - Raw materials - packaging used Measurement of the Manufacturing Activity

12. The EMIME is an important source of information for the commercial balance, for the exports Participation in Exports by activity of the Economic Units Graph 1 Farming 2.9 Petroleum 14.9 Maquila 45.5 Rest of Manufacturing 6.3 Others 0.4 INEGI, Balanza Comercial September of 2006 Measurement of the Manufacturing Activity

13. Economic Importance of each Segment in the Manufacturing Industry. Chart 1 (Million Pesos) CONCEPTECONOMIC UNITSHIRED PERSONNELTOTAL GROSS PRODUCTION INCOME Total Manufacturing 328 7184 198 5792 403 394.62 857 684.9 Industry of Transformation 326 2493 169 0732 372 172.92 614 809.1 Maquila for Exportation Industry 2 4691 029 50631 216.7242 875.8 PERCENT DISTRIBUTIONECONOMIC UNITSHIRED PERSONNELTOTAL GROSS PRODUCTION INCOME Total Manufacturing 100.0 Industry of Transformation 99.2575.4898.7091.50 Maquila for Exportation Industry 0.7524.521.308.50 Source: INEGI Economic Censuses 2004. Measurement of the Manufacturing Activity

14. Importance of the information from the Surveys for the System of National Accounts of Mexico The industrial surveys provide the fundamental input for the measurement of the Gross Internal Product (GNP) of the country. With industry accounting for approximately 21% of the GNP, the maquila industry and the transformation industry are added in a weighted way to measure the contribution of the industrial sector. A change in the conformation of these two segments would generate changes in the calculated amount of the GNP.

15. Situations affecting the Business Directory Sources of the Industrial Sector: I. The economic censuses, employed as a sampling frame for the EIM II. The directory of the maquila for exportation enterprises of the National Department of Economics, which is the sampling frame for the EMIME

16. Situations affecting the Business Directory Main changes in the directories: Changes in the Type of Activity Appearance of Auxiliary Maquila Units Changes in Program

17. Changes in the Type of Activity The economic unit produces goods or provides services which are different Continues in the same activity class yes no Movement in the directory The statistics are altered No movement in the directory Situations affecting the Business Directory

18. Appearance of Auxiliary Maquila Units Enterprises which form establishments for producing, under the maquila system, parts of the production of the main enterprise Changes in the measurement of the economic activity Situations affecting the Business Directory It´s added one or more units in the directory

19. no yes EMIME Directory The e.u. belongs to The e.u. continues in exportation Maquila Program The e.u. is passed to EIM directory The e.u. adopted the exportation Maquila Program The e.u. is passed to EMIME directory The e.u. continues in EIM directory The e.u. continues in EMIME directory Changes in Exportation Maquila Program EIM Directory

20. An hypothetical example Two enterprises belonging to the EIM with one and two establishments respectively and within the CMAP activity class 382302 “Manufacture, assembly and repair of equipment for information processing” adopted the Program of Maquila for exportation. Then, these establishments were moved from one directory to the other.

21. Importance of the activity Activity weight by level of aggregation ConceptPercentage The class in the branch34.6 The branch in the division13.6 The division in the manufacturing sector21.3 The manufacturing sector in the GNP21.0 An hypothetical example Chart 2

22. Results 2004-2005, WITH and WITHOUT the Maquila for Exportation establishments. Monthly variation in Hired Personnel PERIODCLASSBRANCHDIVISIÓNMANUFACTURING 2005/2004WITHWITHOUTWITHWITHOUTWITHWITHOUTWITHWITHOUT JANUARY 7.9-67.16.8-9.62.20.0-0.7-1.1 FEBRUARY 23.2-68.69.4-11.12.2-0.6-0.9-1.5 MARCH 14.4-69.07.7-11.21.0-1.6-1.3-1.9 APRIL 3.9-68.54.7-11.60.7-1.7-0.8-1.3 MAY 6.9-67.64.4-12.51.0-1.2-0.6-1.2 JUNE 1.368.73.5-12.90.6-1.6-0.7-1.3 JULY 10.0-68.54.9-12.70.8-1.4-0.5-1.1 AUGUST 10.1-68.56.0-11.91.3-1.2-0.2-0.8 SEPTEMBER 13.468.53.3-14.81.8-0.80.5-0.0 OCTOBER 84.5-50.712.9-7.22.8-0.20.2-0.4 NOVEMBER 90.3-47.013.0-7.22.6-0.10.0-0.5 DECEMBER 135.0-8.710.7-2.03.1-1.50.5-0.1 An hypothetical example Chart 3

23. Results 2004-2005, WITH and WITHOUT the Maquila for Exportation establishments Monthly Variation of the Physical Volume of Production Index PERIODCLASSBRANCHDIVISIÓNMANUFACTURING 2005/2004WITHWITHOUTWITHWITH OUTWITHWITHOUTWITHWITH OUT JANUARY 12.4-67.611.9-28.64.0-4.83.81.3 FEBRUARY -16.6-74.7-14.5-40.1-1.30.60.91.7 MARCH 2.8-82.00.4-54.3-2.5-13.5-3.8-7.0 APRIL -1.9-75.00.3-34.17.33.36.75.5 MAY -3.4-79.1-2.5-44.23.1-3.42.91.2 JUNE -11.7-84.6-11.1-55.6-3.2-11.70.6-2.1 JULY -31.7-77.0-29.6-45.2- 12.3 -8.4-3.9-2.5 AUGUST -1.7-79.8-2.3-45.96.71.23.92.1 SEPTEMBER 10.2-84.78.7-59.99.7-5.45.10.1 OCTOBER 24.6-77.120.7-42.414.01.16.41.9 NOVEMBER 6.4-77.95.0-44.710.03.04.21.8 DECEMBER 72.1-73.663.0-37.931.61.810.81.2 An hypothetical example Chart 4

24. Results 2004-2005, WITH and WITHOUT the Maquila for Exportation establishments Yearly Variations of the Physical Volume of Production Index VariableCriterionClassBranchDivisionTotal Manufacturing Hired PersonnelWith the 3 plants-64.1-10.5-0.7-0.8 Without the 3 plants23.27.11.7-0.4 Production (PVPI)With the 3 plants-78.9-45.9-3.20.4 Without the 3 plants5.74.55.63.0 Source: INEGI. Monthly Industrial Survey (EIM). An hypothetical example Chart 5

25. Survey Frame The monthly survey of Manufacturing Industry (EMIM) Design a new survey for the manufacturing sector EIMEMIME EMIM + = Sample frame of 354,478 Establishments

26. Sampling Scheme The monthly survey of Manufacturing Industry (EMIM) Design a new survey for the manufacturing sector 237 activity classes. 255 with a deterministic design. 12 with a probabilistic sample.

27. Sample Size Design TypeNumber of Classes Number of Establishments Deterministic2258167 Probabilistic 121576 Total2379743 The monthly survey of Manufacturing Industry (EMIM) Design a new survey for the manufacturing sector

28. Conclusions The definition of the dominions of study for a permanent measurement of the economic activity must be based in the characteristics of the productive process of the economic units and not in considerations of administrative type such as the government support programs for some type of activity.

29. Conclusions There are no essential differences between the productive process of a manufacturing establishment and a maquila establishment, so the latter should not be considered as excluded segments for the measurement of the sector activity.

30. Conclusions An integral measurement of the industrial sector makes it easy to visualize the dynamics of the different segments of activity and the relationships between them.

31. Epilogue In November 2006 the new Decree for the Manufacturing, Maquila and Services of Exportation Industries know fot it’s initials as IMMEX, was published. In compliance with this new decree, starting in 2007 the Maquila for Exportation Industry statistics are no longer captured as a support program of the National Department of Economics. The INEGI also measure the economic activity of the establishments in the IMMEX program, presenting results in early 2008. The affiliation of a establishment to the program does not modify it’s condition of belonging to the universe for the manufacturing industry, measured by the EMIM

32. ¡MERCI!