1 The Potential for International Comparability of Manufacturing Statistics in AMCs: the current situation and issues for the future Workshop on Manufacturing

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The Potential for International Comparability of Manufacturing Statistics in AMCs:

the current situation and issues for the future

Workshop on Manufacturing StatisticsRio de Janeiro, Brazil,24-26 September 2007

EAMS Secretariat EAMS Secretariat

Tomoyuki Kuroda, Ph.D.Tomoyuki Kuroda, Ph.D.

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Objective of this Presentation

◆The following presentation looks at the current situation with regard to the international comparability of manufacturing statistics based on study carried out to date by the AMEICC WGS.

◆It also puts forward issues for the future with regard to international comparability, drawing on the findings of the aforementioned study.

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Table of contents

１　 Overview and major findings

２　 Issues regarding international comparability

３　 Future effort to resolve issues

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Table of contents

１　 Overview and major findings


３ Future effort to resolve issues

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1. Overview and major findings ー Overview of the study ー

Target area: ASEAN + China, South Korea and Japan (extended to ASEAN+3)

- Extending the study to cover all categories of ISIC- 4digit industries (Section-D)

2006

Target area: 8 ASEAN countries + Japan

- Basic study on industrial statistics in general2003


- Initial study into the international comparability of manufacturing statistics

2004


- Trial studies into the comparability of manufacturing statistics in three industries

2005

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1. Overview and major findings ー Study in 2003 ー

Major findings from the study in 2003Major findings from the study in 2003

There are differences between each country, including factors such as the definition and level of statistics compiled.

- Differences in survey subjects (“establishments” vs. “enterprise”)

- Differences in the level of compilation of lists (Directory) of establishments

- Differences in statistical survey methods (different survey scopes, etc.)

- Differences in organizational capabilities (budget and personnel, etc.)

These were just some of the issues relating to international comparability highlighted as a result of research carried out.

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Main findings from the study in 2004Main findings from the study in 2004

a) Factors relating to statistical survey methods

- Because of differing survey period, it is not possible to conduct comparisons covering the entire ASEAN region on an annual basis.

- Because of insufficient budget and human resources, some countries have made little progress in terms of compiling lists (Directory) of establishments/ enterprises.

- Full-scale international comparability is unfeasible because of differences in the classification of the scale of survey subjects (e.g. scale of workforce).

- Whereas surveys in some countries target “establishments,” surveys in others target “enterprises.” (Brunei, China, Vietnam)

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b) Factors relating to industrial classification (Section D)

Countries can be broadly divided as follows, with ISIC Rev. 3 as the common factor.

- Countries using ISIC Rev.3 (Cambodia, Laos, Myanmar, etc.)

- Countries using their own system of industrial classification based on ISIC Rev.3 (other countries)

Although there are a number of outstanding issues to be addressed before accurate comparisons can be made, including statistical survey methods, it is increasingly apparent that it may be possible to conduct international comparisons from the standpoint of industrial classification based on ISIC Rev.3.

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The previous trial study on international comparisons only on three industries in ASEAN countries

ISIC Rev.3・ 17 Textiles

・ 34 Motor Vehicles, Trailers and Semi-trailers ・ 361 Furniture

Reasons for selecting the above industries

The above industries were selected from those thought to be active in each of the ASEAN countries based on agreement from the ASEAN countries themselves.

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　 Envisioned study results　 Envisioned study results

Value of Input Cost, Gross Output and Value Added (Manufacture of Textiles)

(As of May 31, 2005)

Brunei

Darussalam Cambodia Indonesia Lao PDR Malaysia Myanmar Philippines Singapore Thailand Vietnam Japan

Reference year 2001 2000 2000 1999 2000 2002/03 1998 2002 2003(NSO) 2001(MOI) 2000 2000 2003

Unit of value (Local currency) 1000BRD million Riels 1000 Rp million Kips 1000 Ringgits million Kyats 1000 Pesos 1000 SGD 1000 Bahts 1000 Bahts Billion VND million Yens million Yens

Survey Unit total total total total total total total total total total total total total

Number of establishments 16* 227 350,120 1,010 530 4,932 1,735 126 58,688 404 408* 46,950 37,349

Number of workers 171 223,337 1,516,614 3,411 46,142 119,176 57,643 1,663 395,255 na na na na

of which employees 163 223,128 na 1,783 45,357 na 55,595 na 309,785 na 122,756 326,107 262,597

Employment cost 1,204 923,181 4,789,111 3,783 702,331 10,240 4,180,798 39,492 20,531,583 na 1,208 926,306 698,701

Total (Input cost)・・・・・・・・・・・・・・・① 3,633 1,911,302 51,966,905,433 22,310 5,347,916 26,216 20,091,809 194,789 137,159,810 76,741 11,125 2,222,244 1,735,275

of which raw materials 1,106 1,421,562 na 17,108 4,104,261 na 17,196,005 129,786 104,646,976 70,516 na na na

of which maintenance and industrial services 150 74,541 na 927 419,992 na 490,693 2,789 9,421,317 na na na na

Total (Value of gross output)・・・・・・・・・・② 4,971 3,749,279 777,659,708,478 38,966 7,812,198 42,288 31,829,355 254,605 187,073,421 132,703 13,078 4,334,614 3,394,506

of which goods produced 2,347 3,898,637 na 37,576 7,554,500 na 29,561,905 243,351 173,900,156 na 13,078 3,067,172 2,402,339

of which value of industrial services rendered 1,490 280,552 na na 1,390 na 767,333 na 9,512,019 na na 1,264,760 972,716

Value added at market price(②－①) 1.338 1,837,977 25,692,803,045 16,656 2,464,282 16,072 11,737,547 59,816 49,913,611 55,962 247 1,899,734 1,512,034

Book value of fixed assets na 1,072,182 na 4,285 5,883,708 46,308 14,401,624 89,790 119,158,215 na 10,202 na na

of which fixed assets other than land na na na na 5,587,879 na na na 97,789,808 na na na na

*Number of enterprises

Value of Input Cost, Gross Output and Value Added (Manufacture of Textiles)(As of May 31,2005)

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Trial international comparisons between three industries in ASEAN countries

- In spite of differences between countries conducting censuses and those conducting sample-based surveys, data was obtainable for more or less all establishments for the Y2000.- The concepts and definitions used in each country with regard to factors such as methods of calculating total value added more or less comply with international standards.

⇒There was determined to be sufficient data available for international comparability in the ASEAN countries in the future.

Research indicated a number of outstanding issues however with regard to the conditions required for comparisons to be carried out, including the following.

- Differences between “Establishment” and “Enterprise” based statistics - The need to investigate indices to enable comparisons in local currencies 　

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Items surveyed

- Number of business establishments / enterprises - Number of employees - Total value added etc.

a) An ISIC Rev.3 4-digit data comparative matrix was compiled for the manufacturing industry as all categories of ISIC (Section-D).

The matrix was evaluated in an attempt to identify issues relating to improvements in international comparability.

b) Evaluation of the above matrix

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a) Four-digit data comparative matrix for the manufacturing industry

1.Number of Establishments (original)

Brunei Cambodia Lao PDRName of statistics 2002 Economic

CensusSurvey ofIndustrialEstablishment2000

Survey of IndustrialEatablishments,1999

Reference Year 2001 2000 1999

Stastiscal unit Enterprise Establishment Establishment

Size coverage All ActiveregiteredEnterprises

TNE=10%11～99=50%100=100%

10 or more workers

ISIC ISIC KBLI ISIC MSIC

D Manufacturing 482 7,857 D 20,324 410 D 19,065

15 Manufacture of food products andbeverages

42 5,515 15 4,414 74 15 2,988

151 Production, processing and preservationof meat, fish, fruit, vegetables, oils andfats

36 151 951 151 686

1511Production, processing and preserving ofmeat and meat products

2 1511 33 1511 54

1512Processing and preserving of fish and fishproducts

3 36 1512 523 1512 131

1513Processing and preserving of fruit andvegetables

1513 69 1513 54

1514Manufacture of vegetable and animal oilsand fats

1514 326 1514 447

Large and MediumManufacturingStatistics

Annual survey ofmanufacturing industries 2004

Indonesia Malaysia

2003 2003

Establishment Establishment

ISIC

20 or more workers 1 or more worker

Number of Establishments (original)Envisioned research results

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Major findings from the Study in 2006Major findings from the Study in 2006

b) Number of comparable industries based on the comparative matrix

Envisioned numbers

ISIC

ASEAN+3 ASEAN ASEAN+3 ASEAN ASEAN+3 ASEAN

D Manufacturing 61 127 6 19 6 10 37 48

15Manufacture of food products andbeverages 5 17 1 2 5 7

16 Manufacture of tobacco products 1 1 0 0 0 017 Manufacture of textiles 3 7 　 ○ 0 0 0 1

18Manufacture of wearing apparel;dressing and dyeing of fur 2 2 　 ○ 0 0 0 2

19Tanning and dressing of leather;manufacture of luggage, handbags,saddlery, harness and footwear

2 3 ○ ○ 0 0 1 1

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Manufacture of wood and ofproducts of wood and cork, exceptfurniture; manufacture of articlesof straw and plaiting materials

2 5 　 ○ 0 0 4 5

21Manufacture of paper and paperproducts

1 3 ○ ○ 1 1 0 0

No. of 3-digit

categories

No. of4-digit

categoriesNumber of comparable categories

3-digit categories 4-digit categories2-digit

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-Although each country essentially uses either ISIC Rev.3 classification or its own system of industrial classification based on ISIC Rev.3, detailed evaluation of four- digit data shows that the number of industries that are actually comparable in reality is relatively low.

c) Issues regarding international comparability based on evaluation of the matrix

Number of industries under ISIC Rev.3 Section D (manufacturing

industry) (4-digit)

Number of such industries that are comparable

between ASEAN countries

Number of such industries that are comparable between ASEAN

countries, China, Japan and ROK

12748 　

（ 38% ） 36 　（ 28% ）“Industries that are actually compatible” here refers to industries that correspond to one item of data under one category (class) of ISIC (rather than being bundled together with other categories).

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- Whereas it is possible for industries to be comparable if there is one-to-one correspondence between ISIC and industrial categories in individual countries, comparability becomes distorted in cases in which multiple ISIC categories only correspond to one category in the relevant country (i.e. if national categories are bundled together).

B r Cm Id Lao Mly Mya Ph Sg Th VnTotal 127 127 127 － 127 127 － 127 127 127

26 47 121 － 121 106 － 113 127 122

26 42 121 － 109 106 － 63 73 122

None 5 None － 12 －－ 50 54 None

101 80 6 － 6 21 － 14 None 5

Data includes “number of business establishments” or “number of companies”

One-to-one correspondence with ISIC (i.e. comparable cases)

Multiple ISIC categories correspond to one category under national data (i.e. cases with distorted comparability)

Data does not include “number of business establishments” or “number of companies” (i.e. cases in which comparability is unclear)

Example: The number of “business establishments” (“enterprises”) in the 10 ASEAN countries

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Table of contents

１　 Overview and main findings


３　 Efforts to resolve issues

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2. Issues regarding international comparability

Main issuesMain issues

Based on findings from research carried out to date, some of the key issues relating to international comparability are as follows.

(1) Reduced comparability when applied to actual figures (numerical data)

(2) The absence of a harmonized industrial classification (4 digit level)

(3) Differences in the development stage of statistics compiled

(4) Issues relating to factors such as the definition of statistics and survey methods

Focusing first of all on point (2), the EAMS intends to examine the issue of industrial classification in line with regional characteristics, based on ACIC/ISIC Rev.4. Each country will therefore be required to provide data from economic censuses carried out in 2005 or thereabouts. (This is expected to eliminate any issues arising as a result of sample design.)

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(1) Reduced comparability when applied to actual figures (numerical data)(1) Reduced comparability when applied to actual figures (numerical data)

Industries tend to be uniquely bundled together in each country when it comes to actual figures (numerical data), even in the case of industries that exhibit “one-to-one correspondence with ISIC” at the industrial classification research stages.

This results in the emergence of a large number of industries in which international comparability is not possible.

a) The bundling of industries within data

1511

ISIC 4-digit data

1511 ＋ 1512 listed under same data category

Data provision stage

1512

1513 1513 ＋ 1514 listed under same data category

1514

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ExampleExample

In this example, the only comparable category is 1531. It is unclear as to whether 1520 is comparable or not. Comparison is not possible for any of the other categories due to the different methods used to bundle data together in Countries A and B.

ISICNo. of business

establishments in Country ANo. of business

establishments in Country B

4-digit data

1511 10

1512 100

1513 60

1514 30

1520 Blank 50

1531 40 30


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Due to factors such as survey methods and sample sizes, multiple categories are inevitably bundled together at the data provision stage.

b) Reasons for reduced comparability

⇒Ultimately, if it is not possible to compare figures (data), it will not be possible to carry out international comparisons. It will therefore be necessary to focus investigations into comparability on figures (data) rather than conceptual research.

To put it another way, it will be necessary to investigate factors such as the meaning of individual figures, the underlying definitions and survey methods in an effort to share information and establish mutual understanding between Member Countries.

c) The significance of this issue


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(2) The absence of a harmonized industrial classification (4 digit level)(2) The absence of a harmonized industrial classification (4 digit level)

There is no system in place to enable regional consensus with regard to industrial classification or data listing rules geared towards international comparability on the four-digit data level.

a)The absence of any listing rules or guidelines relating to four-digit data

⇒The absence of any obligation to publish four-digit data effectively allows each country to bundle industries together in its own unique way.

This is a matter that needs to be addressed first of all in order to develop internationally comparable statistical data for the manufacturing industry.

(It will be necessary to formulate a set of guidelines along the same lines as those drawn up by the TFSC at the time of the establishment of the ACIC.)

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- Factors such as survey methods and sample sizes

- Due to the low frequency of revisions to national standard classification, data corresponds with manufacturing statistical surveys on a practical level in order to coincide with current economic conditions.

b)Specific factors

⇒ Results in the bundling of industries

- Confidentiality measures(Need to protect privacy due to small number of business establishments (enterprises))

(Confidentiality in industries relevant to security and other issues)

⇒Either industries are inevitably bundled together for the sake of confidentiality or comparability is unclear due to data being left blank

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- In the absence of a set of harmonized rules regarding compliance with industrial classification, individual countries are free to randomly bundle industries together for a variety of different reasons.

- As long as the situation remains unchanged, international comparisons on the four-digit level will continue to be unfeasible.

- It is hoped that a set of guidelines will be established and a harmonized East Asian system of classification for the manufacturing industry (four-digit) developed based on ISIC Rev.4 and the ACIC in order to help enable the publication of four-digit data in the future.



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(3) Differences in the development stage of statistics compiled(3) Differences in the development stage of statistics compiled

Country A Country B

Annual surveysNo regular surveys(most recent 3 years ago)

Business establishments with 10 or more employees

Business establishments with 20 or more employees

All such establishments surveyed Sample taken of such establishments

4-digit data published Only 2-digit data published

a) Example

- Difference in the level of government priority placed on statistics

- Incompatibility between the survey system and an increasing number of survey subjects in line with rapid economic growth

- Issues relating to the statistics body’s budget and organizational capabilities

- Issues relating to proficiency levels on site (both statisticians and survey subjects)

b) Main factors

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It will be essential to take into account the level of statistics compiled in each country as part of the process of laying the foundations for international comparability.

There is also an increasing need for initiatives such as the following.


(3) Differences in the development stage of statistics compiled (3) Differences in the development stage of statistics compiled

- Capacity building programs in line with the situation in each country

- Joint Study in more advanced countries and countries representative of the region

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2. Issues regarding international comparability－ (4) Definitions, survey methods, etc. ー

In addition to establishing a harmonized industrial classification, issues such as the following also need to be addressed.

- A statistical unit : “Establishments” or “Enterprises”

- The difference of a clear cut definition of how to classify a business unit based on its size (large, medium, small and micro)

- Scope and Definitions of “Cost”, “Input”, “Output”, and “Value added”

- Classification methods of Establishment (Activity base, Product base)

- Methods of compiling lists (ex.directories, survey frame) of business establishments (enterprises) 　

　 etc.


(4) Issues relating to factors such as the definition of statistics and survey methods(4) Issues relating to factors such as the definition of statistics and survey methods

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Head Office

Based on businessestablishments

Survey basedon enterprises


ExampleExample

- Differences between “Establishments” and “Enterprises”

Plant 1 Plant 2 Plant 1 Plant 2

Head Office

- The difference of a clear cut definition of how to classify a business unit based on its size (large, medium, small and micro)

Targeting all business

establishments

Only targeting business establishments with 20 or

more employees

Only targeting business establishments with 6 or

more employees

- Definitions relating to items such as “Input” and “Output”

Country A Country B

Total production Total shipments

Total usedConverted to total used based on total purchased

Definition of “output”

Definition of “raw materials

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- Classification methods of Establishment (Activity base, Product base)

- Methods of compiling directories of Establishments / Enterprises

Based on products manufactured

・ Maximum production・ Maximum sales

Based on activity

・ Major economic activity

Target area: Coverage (nationwide, urban areas only, etc.)

List updates: Survey methods and lists updated to reflect site closures/new openings, frequency of updates

Dealing with small companies: Listing of home workshops and the informal sector

⇒Unless ways of handling these differences between the conditions required for data comparison are investigated, it will not be possible to conduct valid international comparisons. It is however unfeasible to unify these concepts over a short period of time.

It is therefore essential to proceed with the compilation of information geared towards the establishment of a set of basic guidelines to help countries is East Asia to implement revisions to their respective survey methods.

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Table of contents

１　 Overview and main findings

3 　 Future effort to resolve issues


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- In the face of an increasingly united ASEAN+3 region, it is essential that experts in manufacturing statistics from each country exchange opinions and share information with one another.

　 - Promoting cooperation between the AHSOM and AMEICC through the EAMS

1) The need for a forum to examine international comparisons of manufacturing industry statistics in the ASEAN+3 region

3. Future effort to resolve issues

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- A comparative matrix in line with figures will help clarify issues relating to international comparability in greater detail.

- Examining a harmonized system of classification will help improve and maintain international comparability in practice.

(2)Two effective approaches to improving international comparability: a comparative matrix and a harmonized East Asian version of industrial classification for the manufacturing industry


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Envisioned comparative matrix

Country A Country B

Reference year: 2006 Reference year: 2005

Subject: Business establishments

Subject: Business establishments

Country B

Reference year: 2006

Subject: enterprises

- 4 employees or more- All establishments surveye

d (census)

- 20 employees or more- All establishments surveye

d (census)

・ All companies・ All companies surveyed

(census)

No. of establishments No. of establishments No. of enterprises

：：

ISIC 1511 200

ISIC 1512 60ISIC 1513 120

ISIC 1514 30

：：

ISIC 1511 30

ISIC 1512 -ISIC 1513 40

ISIC 1514 5

：：

ISIC 1511 8

ISIC 1512 50ISIC 1513 0

ISIC 1514 -

Definitions,

methods, scope,

etc.

Industrial classification/figures

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Envisioned functional standardized ASEAN+3 system of industrial classification (4-digit) for the manufacturing industry

Focusing on harmony between classification systems 　（ ISIC, ACIC, NSIC)

Focusing on harmony between classification systems 　（ ISIC, ACIC, NSIC)

ISIC Rev.4

Section A

Section B

Section CManufacturing

Section D

：

ACIC Manufacturing industry classification in ASEAN+3

Section A

Section B


Section D

：

Compliance

4-digit Current: 3-digit

Section A

Section B

Section D

：

Future: 4-digit

Manufacturing

4-digit

Manufacturing industry only


Converte

r

A standardized ASEAN+3 system of industrial classification (4-digit) for the manufacturing industry

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Thank you very much!

Documents

1 The Potential for International Comparability of Manufacturing Statistics in AMCs: the current situation and issues for the future Workshop on Manufacturing