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  • UK index of production: August 2017

    1. Main points

    • In the three months to August 2017, the Index of Production was estimated to have increased by 0.9%; all four main sectors increased with the largest contribution from manufacturing.

    • The largest contribution to the rise in manufacturing in the three months to August 2017 came from other manufacturing and repair, which rose by 3.8%; this sub-sector includes a wide range of high-value milestone-based contracts for repair and maintenance, such as for aircraft, ships and boats.

    • In August 2017, total production was estimated to have increased by 0.2% compared with July 2017, due mainly to a rise of 0.4% in manufacturing.

    • Total production output for August 2017 compared with August 2016 increased by 1.6%, with manufacturing providing the largest upward contribution, increasing by 2.8%; mining and quarrying partially offset this rise, decreasing by 6.0%.

    • The earliest period open for revision in this release was January 1997; revisions to Index of Production data up to Quarter 2 (Apr to June) 2017 are consistent with Quarterly National Accounts: April to June 2017, published on 29 September 2017 and data used for Blue Book 2017, due for release on 31 October 2017.

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    2. Things you need to know about this release

    In this release, periods back to January 1997 were open for revision, as this dataset contains the annual updates that are also included in the Quarterly National Accounts: April to June 2017, published on 29 September 2017 and data used for Blue Book 2017, due for release on 31 October 2017. This is in line with the standard National Accounts Revisions Policy. As is common for the first Index of Production (IoP) publication following the annual updates, there can be larger revisions than in an ordinary publication (see Table IOP5R, which shows the revisions to IoP estimates against the previously published).

    Revisions can be made for a variety of reasons; the most common include:

    • the annual update of the weights used to construct the chained volume measures of output
    • the annual update of seasonal adjustment models
    • the published indices being re-referenced from 2013 equals 100 to 2015 equals 100
    • methodological improvements
    • updated source data

    The Index of Production is an important economic indicator and one of the short-term measures of economic activity in the UK. It is used in the compilation of gross domestic product (GDP); the production industries’ weight accounts for 14.0% of the output approach to the measurement of GDP.

    The IoP measures the UK output in the mining and quarrying; manufacturing; energy supply; and water supply and waste management industries. The IoP estimates are mainly based on the Monthly Business Survey (MBS) of approximately 6,000 businesses. For the mining and quarrying, and energy supply sectors, and two manufacturing industries namely coke and refined petroleum, and basic iron and steel, we receive volume data from the Department for Business, Energy and Industrial Strategy (BEIS) and the International Steel Statistics Bureau (ISSB) respectively. Unless otherwise stated, all estimates included in this release are based on seasonally adjusted data. The current price non-seasonally adjusted estimates of industries collected by the MBS can be found in today’s (10 October 2017) publication of TOPSI: Turnover in production and services industries.

    As part of the Short-term Economic Indicators theme day, TOPSI produces the proportion of turnover from exports by industry and level of turnover and exports (£ millions). However, this is not always comparable with UK trade statistics, for a number of reasons. These include, but are not limited to:

    • different data sources – IoP and TOPSI are based on a survey of businesses; UK Trade in Goods uses administrative data collected by HM Revenue and Customs (HMRC)
    • different concepts being measured – IoP reports the value of exports as a proportion of the industry's turnover; the UK trade in goods data report the change in ownership between the UK and other countries
    • time lag – there can be time lags between the sale of a product reported in IoP and the movements of that product reported by UK trade

    Further information on UK trade and how data on it are compiled can be found in the “Things you need to know about this release” section of the UK trade release.

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    This article was originally published in forum thread: UK index of production: August 2017 started by ons.gov.uk View original post