CHAPTER 4 – Session 10

United Nations Statistics Division/DESA

RevisionRevisionof the Index of Industrialof the Index of Industrial

Production (IIP) Production (IIP) publicationpublication

by the UNSDby the UNSD

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Chapter 4Chapter 4

• Summary of chapter:Summary of chapter:• This chapter outlines the sources and methods This chapter outlines the sources and methods

from which an IIP can be compiled. from which an IIP can be compiled. • Section 4.1 presents the variables used to approximate Section 4.1 presents the variables used to approximate

industrial production;industrial production;

• Section 4.2 presents the methods to obtain volume measures. Section 4.2 presents the methods to obtain volume measures. Having outlined the variables and methods; Having outlined the variables and methods;

• Section 4.3 presents the recommended variables and Section 4.3 presents the recommended variables and methods to obtain industrial production volumes; andmethods to obtain industrial production volumes; and

• The chapter concludes with a discussion on sources of data.The chapter concludes with a discussion on sources of data.

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Chapter 4 – Recommendations and Chapter 4 – Recommendations and FeedbackFeedback

• General support for the structure and content of chapter 4.General support for the structure and content of chapter 4.

• Recommendation:Recommendation: Variables to be used to approximate Variables to be used to approximate industrial production for the IIP - industrial production for the IIP - In general, measures of In general, measures of output (value of output, physical quantity of output) are output (value of output, physical quantity of output) are preferred to input (labor and materials consumed) measures.preferred to input (labor and materials consumed) measures.• Note – chapter 8 provides detailed industry recommendations which Note – chapter 8 provides detailed industry recommendations which

shows in certain circumstances other variables produce sound results.shows in certain circumstances other variables produce sound results.

• FFEDBACK - Suggestion of additional qualifying text around the use of FFEDBACK - Suggestion of additional qualifying text around the use of labour input variables (Stats Can).labour input variables (Stats Can).

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Chapter 4 – Recommendations and Chapter 4 – Recommendations and FeedbackFeedback

• Recommendation:Recommendation: Method to achieve Method to achieve volume estimates for the IIP -volume estimates for the IIP - In general, In general, the deflation process with the use of an the deflation process with the use of an appropriate price index is recommended.appropriate price index is recommended.

• FFEDBACK - This was generally accepted FFEDBACK - This was generally accepted with some additions required to explain the with some additions required to explain the reasons for the recommendation (additions to reasons for the recommendation (additions to para 132 - US)para 132 - US)

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Chapter 4 – Recommendations and Chapter 4 – Recommendations and FeedbackFeedback

• Recommendation:Recommendation: Deflator to be used to achieve Deflator to be used to achieve volume estimates from value data - volume estimates from value data - The PPI is The PPI is recommended as the price index to be used by recommended as the price index to be used by countries when current price values are deflated to countries when current price values are deflated to achieve volume measures of output for the IIP.achieve volume measures of output for the IIP.

• FEEDBACK suggests this recommendation is FEEDBACK suggests this recommendation is supported.supported.

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Chapter 4 – Recommendations and Chapter 4 – Recommendations and FeedbackFeedback

• Recommendation:Recommendation: Level at which to apply deflator Level at which to apply deflator - - It is recommended the deflator be applied to the It is recommended the deflator be applied to the value data at the ISIC class (4-digit) level in order value data at the ISIC class (4-digit) level in order to obtain a volume estimate for use in the to obtain a volume estimate for use in the compilation of the IIP. The detailed PPI used for compilation of the IIP. The detailed PPI used for deflation should be defined as closely as possible deflation should be defined as closely as possible to the respective product groups for which it is to the respective product groups for which it is being used as a deflator and that it (the deflator) being used as a deflator and that it (the deflator) should be applied at the ISIC class (4 digit) level.should be applied at the ISIC class (4 digit) level.

• FEEDBACK suggests this recommendation is FEEDBACK suggests this recommendation is supported.supported.

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Chapter 4 - DiscussionChapter 4 - Discussion

• Are there any comments on the suggested Are there any comments on the suggested additions to chapter 4:additions to chapter 4:• Suggestion of additional qualifying text around Suggestion of additional qualifying text around

the use of labour input variables (Stats Can).the use of labour input variables (Stats Can).• Additional explanation needed for Additional explanation needed for

recommending the deflation method.recommending the deflation method.