United Nations Statistics Division International Recommendations for Industrial Statistics (IRIS)

United Nations Statistics Division

International Recommendations for International Recommendations for Industrial Statistics (IRIS)Industrial Statistics (IRIS)

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International Recommendations for International Recommendations for Industrial Statistics (IRIS)Industrial Statistics (IRIS)

Outline of presentationOutline of presentation1. Background 1. Background

2. Need for revision of IRIS2. Need for revision of IRIS

3. Main recommendations3. Main recommendationsa. Scope and coveragea. Scope and coverage

b. Statistical unitsb. Statistical units

c. Treatment of ancillary activitiesc. Treatment of ancillary activities

d. Data itemsd. Data items

e. Valuatione. Valuation

f. Data items for international reportingf. Data items for international reporting• AnnualAnnual

• QuarterlyQuarterly

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1. Background1. Background

• Since 1950s, UN has published international Since 1950s, UN has published international recommendations – to establish a coherent and uniform recommendations – to establish a coherent and uniform measurement of industrial activities – 1953, 1960, 1968 and measurement of industrial activities – 1953, 1960, 1968 and 19831983

• UNSC in 2006 reviewed the industrial statistics and UNSC in 2006 reviewed the industrial statistics and endorsed the proposal for revision of IRIS.endorsed the proposal for revision of IRIS.

• Expert Group Constituted to guide the revision which met Expert Group Constituted to guide the revision which met in in

• Sept 2005 – considered proposals for revision and Sept 2005 – considered proposals for revision and • July 2007 – considered the draft IRISJuly 2007 – considered the draft IRIS

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2. Need for revision2. Need for revision

Some important factors which necessitated revision are:Some important factors which necessitated revision are:• 1993 SNA update1993 SNA update

• Units undertaking ancillary activities treated as a separate establishment in Units undertaking ancillary activities treated as a separate establishment in some specific circumstances,some specific circumstances,

• Additional element for the measure of COE like ‘employees stock option’Additional element for the measure of COE like ‘employees stock option’• Treatment of goods sent abroad for processing,Treatment of goods sent abroad for processing,• Changes in terminology and classification of assets,Changes in terminology and classification of assets,• Capitalisation of database development, and capitalisation of R&D expendituresCapitalisation of database development, and capitalisation of R&D expenditures

• Revision of International Standard Industrial Classification of all economic Revision of International Standard Industrial Classification of all economic activities (ISIC Rev. 4) and Central Product Classification (CPC Ver. 2).activities (ISIC Rev. 4) and Central Product Classification (CPC Ver. 2).

• Consistency with changes in concepts, definition and terminology in Consistency with changes in concepts, definition and terminology in publications and regulations of other international organisations. For publications and regulations of other international organisations. For example, revision in the IMF manual on BOP, EU regulations on statistical example, revision in the IMF manual on BOP, EU regulations on statistical units, structural business statistics etc. units, structural business statistics etc.

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2. Need for revision2. Need for revision Cont. Cont.

• Inclusion of aspects of globalisation of the industrial Inclusion of aspects of globalisation of the industrial production process including ‘outsourcing’ and use of e-production process including ‘outsourcing’ and use of e-ecommerceecommerce,,

• Efforts of countries to minimise the differences between Efforts of countries to minimise the differences between the concepts of ‘census value added’ and ‘national the concepts of ‘census value added’ and ‘national account value added’,account value added’,

• Change in valuation of industrial output to basic prices Change in valuation of industrial output to basic prices in accordance with the SNA valuation principle,in accordance with the SNA valuation principle,

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2. Need for revision2. Need for revision Cont. Cont.

• Extension of the link between the economy and the Extension of the link between the economy and the environment by extending the coverage of the data items to environment by extending the coverage of the data items to include the use of natural resources like energy, water, include the use of natural resources like energy, water, mineral, generation of solid waste and waste water and by-mineral, generation of solid waste and waste water and by-products,products,

• Experience of countries both in developing an industrial Experience of countries both in developing an industrial statistics system and conducting an integrated system of statistics system and conducting an integrated system of annual and infra-annual industrial inquiries adapted to the annual and infra-annual industrial inquiries adapted to the needs of NA and the measurement of industrial sector for the needs of NA and the measurement of industrial sector for the economy as a wholeeconomy as a whole

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3a. Scope of industrial sector3a. Scope of industrial sector

• Economic activities included in terms of ISIC Rev. 4 are:Economic activities included in terms of ISIC Rev. 4 are:• Mining and quarrying (section B)Mining and quarrying (section B)• Manufacturing (section C)Manufacturing (section C)• Electricity, gas, steam and air conditioning supply (section D), andElectricity, gas, steam and air conditioning supply (section D), and• Water supply; sewerage, waste management and remediation Water supply; sewerage, waste management and remediation

activities (section E)activities (section E)

• Industrial activities in international waters, such as the Industrial activities in international waters, such as the operation of petroleum and natural gas wells, should be operation of petroleum and natural gas wells, should be included if these activities are subject to the laws, regulations included if these activities are subject to the laws, regulations and control of the country concerned.and control of the country concerned.

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3a. Coverage of industrial activities3a. Coverage of industrial activities

• In conformity with the 1993 SNA production In conformity with the 1993 SNA production boundary all units engaged in economic activities boundary all units engaged in economic activities within the scope should be coveredwithin the scope should be covered..

• Units of Units of all sizesall sizes (with and without fixed locations) and (with and without fixed locations) and

• Units of all types of ownership including the govt. and Units of all types of ownership including the govt. and household unitshousehold units

• Household unincorporated enterprises as well as goods Household unincorporated enterprises as well as goods produced by households engaging in industrial produced by households engaging in industrial activities for own consumption should also be covered.activities for own consumption should also be covered.

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3a. 3a. Coverage of industrial sectorCoverage of industrial sector cont.cont.

• Departments, establishments and similar units in general Departments, establishments and similar units in general Govt. should be included if they are mainly engaged in Govt. should be included if they are mainly engaged in production of goods and services within the scope and production of goods and services within the scope and identifiable by accounting records kept by them. identifiable by accounting records kept by them.

• Some of units may not be operating for profit, orSome of units may not be operating for profit, or• May not dispose of their output in the market. Produce of such units may May not dispose of their output in the market. Produce of such units may

be sold at prices below cost of production because of govt policy.be sold at prices below cost of production because of govt policy.

• Govt. units may furnish goods and services to itself of a kind provided by Govt. units may furnish goods and services to itself of a kind provided by privately owned establishments – printing and publishing services, privately owned establishments – printing and publishing services, ammunitions, etc.ammunitions, etc.

• All types of units not necessarily covered through the same All types of units not necessarily covered through the same survey instrument.survey instrument.

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3b. 3b. Statistical unitStatistical unit

• 1993 SNA 1993 SNA recommends establishment as the most appropriate statistical recommends establishment as the most appropriate statistical unit (SU) for production and employment dataunit (SU) for production and employment data• Countries are encouraged to use establishment as a SU for industrial statistics Countries are encouraged to use establishment as a SU for industrial statistics

• Choice of establishment vs enterprise as SU reflects balancing of data Choice of establishment vs enterprise as SU reflects balancing of data availability against homogeneity of economic activity.availability against homogeneity of economic activity.• Using establishment as a unit enablesUsing establishment as a unit enables

• Homogeneity in the measurement of the economic activityHomogeneity in the measurement of the economic activity• More accurate presentation of regional economic realityMore accurate presentation of regional economic reality

• Choice of SU may be guided by factors such as purpose of study, the Choice of SU may be guided by factors such as purpose of study, the availability and quality of requisite data, therefore, enterprise can also be used availability and quality of requisite data, therefore, enterprise can also be used as SUas SU

• In majority of cases establishment and the enterprise are same except in case In majority of cases establishment and the enterprise are same except in case of multi-establishment enterprises.of multi-establishment enterprises.

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3c. Treatment of 3c. Treatment of Ancillary Ancillary activitiesactivities

• A productive activity undertaken with the sole purpose of A productive activity undertaken with the sole purpose of producing services for intermediate consumption within the producing services for intermediate consumption within the same enterprise is defined as an ancillary activity. Examples same enterprise is defined as an ancillary activity. Examples are record keeping, personnel management, warehousing etcare record keeping, personnel management, warehousing etc

• Ancillary activities are integrated with the establishments they Ancillary activities are integrated with the establishments they support. This approach depicts the production process as it is support. This approach depicts the production process as it is performed but has the following disadvantagesperformed but has the following disadvantages • Not recognized by its own activity, structural decomposition of GDP by Not recognized by its own activity, structural decomposition of GDP by

economic activities not depicted correctly, andeconomic activities not depicted correctly, and

• Regional GDP can not be compiled accurately when the ancillary unit and Regional GDP can not be compiled accurately when the ancillary unit and the establishments it serves are located in different regional economiesthe establishments it serves are located in different regional economies

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3c. Treatment of 3c. Treatment of Ancillary activitiesAncillary activities cont.cont.

Units undertaking ancillary activities to be treated as an Units undertaking ancillary activities to be treated as an establishment in certain casesestablishment in certain cases

• Enterprise in which different kinds of activities undertaken by it Enterprise in which different kinds of activities undertaken by it or either horizontally or vertically integrated;or either horizontally or vertically integrated;

• When an establishment undertaking ancillary activities is When an establishment undertaking ancillary activities is statistically observable, i.e. records of its transactions are readily statistically observable, i.e. records of its transactions are readily available, andavailable, and

• When the ancillary units are in a geographical location different When the ancillary units are in a geographical location different from the establishments they serve.from the establishments they serve.

• Such an establishment should be classified according to its own Such an establishment should be classified according to its own principal activity.principal activity.

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3c. Treatment of 3c. Treatment of Ancillary activitiesAncillary activities cont. cont.

Output of ancillary establishmentOutput of ancillary establishment • Output of ancillary establishment should be derived on sum of Output of ancillary establishment should be derived on sum of

cost basis i.e. all costs of its production including the cost of the cost basis i.e. all costs of its production including the cost of the capital used.capital used.

• Output deemed to be market output when the parent enterprise is Output deemed to be market output when the parent enterprise is a market enterprise and non-market otherwise.a market enterprise and non-market otherwise.

• Output of the ancillary unit is treated as intermediate Output of the ancillary unit is treated as intermediate consumption of the establishments it serves and should be consumption of the establishments it serves and should be allocated using appropriate indicator as their value added, output allocated using appropriate indicator as their value added, output or employment.or employment.

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3d. 3d. Data itemsData items

Characteristics of statistical unitsCharacteristics of statistical units• LocationLocation

• Type of economic organisationType of economic organisation

• Type of legal organisation and ownershipType of legal organisation and ownership

• Size (in terms of persons employed)Size (in terms of persons employed)Recommended size classes: (1-9, 10-19, 20-49, 50-249, 250Recommended size classes: (1-9, 10-19, 20-49, 50-249, 250++))• Kind-of-activityKind-of-activity

• Type of unitType of unit

• Period of operationPeriod of operation

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3d. Data items3d. Data items cont. cont.

Employment (by gender)Employment (by gender)• No. of persons employed No. of persons employed

• Working proprietors, Unpaid FW, employeesWorking proprietors, Unpaid FW, employees• Employees engaged in own-account production of Employees engaged in own-account production of

intellectual property productsintellectual property products (software & database, R&D, (software & database, R&D, mineral exploration and evaluation, entertainment, literary mineral exploration and evaluation, entertainment, literary and artistic originals)and artistic originals)

• Employees engaged in own account fixed asset formation Employees engaged in own account fixed asset formation and construction)and construction)

• Average number of persons employedAverage number of persons employed• Hours workedHours worked• Leased employeesLeased employees

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Compensation of employees in cash and in kindCompensation of employees in cash and in kindStock options (income in kind)Stock options (income in kind)

• Employer giving employee an option to buy stocks (shares) at some future Employer giving employee an option to buy stocks (shares) at some future date at a given price (strike/exercise price) subject to certain conditions date at a given price (strike/exercise price) subject to certain conditions (employee is still on the enterprise pay roll).(employee is still on the enterprise pay roll).

• Employee may not exercise the option:Employee may not exercise the option:• Share price is now lower than his option priceShare price is now lower than his option price• No longer in the employment of the companyNo longer in the employment of the company

• The ‘grant date’ is when the option is provided, the ‘vesting date’ is the The ‘grant date’ is when the option is provided, the ‘vesting date’ is the earliest date when the option can be exercised (or lapses)earliest date when the option can be exercised (or lapses)

• Valuation of the stock option may estimated as the difference between the Valuation of the stock option may estimated as the difference between the market price and the stock price at vesting date or using using a stock market price and the stock price at vesting date or using using a stock option pricing model.option pricing model.

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Other expendituresOther expenditures• Cost of material, parts and supplies except gas, fuels and Cost of material, parts and supplies except gas, fuels and

electricity electricity (purchased form other enterprises and delivered by the other (purchased form other enterprises and delivered by the other establishments of the same enterprise)establishments of the same enterprise)

• Cost of gas, fuels and electricity purchasedCost of gas, fuels and electricity purchased• Cost of water and sewerage services Cost of water and sewerage services • Purchase of services except rentalPurchase of services except rental

• Cost of industrial services purchased and also delivered by other Cost of industrial services purchased and also delivered by other establishments of the same enterpriseestablishments of the same enterprise

• Cost of non-industrial services purchased and also delivered by other Cost of non-industrial services purchased and also delivered by other establishments of the same enterpriseestablishments of the same enterprise

• Purchase of goods and services for resale in the same condition Purchase of goods and services for resale in the same condition as receivedas received

• Rental paymentsRental payments• Non-life insurance premiums payable on establishment propertyNon-life insurance premiums payable on establishment property

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QuantityQuantity• Quantity of individually important materials and supplies Quantity of individually important materials and supplies • Quantity of gas, fuels purchasedQuantity of gas, fuels purchased• Quantity of electricity Quantity of electricity

• Purchased Purchased • GeneratedGenerated• SoldSold

• Total energy consumed (tera joules)*Total energy consumed (tera joules)*• Cost of water Cost of water

• PurchasedPurchased• Abstracted for own useAbstracted for own use• SoldSold

• Total water usedTotal water used• Quantity of waste waterQuantity of waste water

• Treated on site prior to dischargeTreated on site prior to discharge• Discharged withoutDischarged without

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Sales/shipments and other revenues Sales/shipments and other revenues • Sales/shipment of goods produced Sales/shipment of goods produced

• Sales/shipment of goods and services purchased for resale in the Sales/shipment of goods and services purchased for resale in the same condition as receivedsame condition as received

• Receipts for industrial work doneReceipts for industrial work done

• Other receiptsOther receipts• Value of own account fixed assets*Value of own account fixed assets*• E-commerce sale/value of shipment/receipt for services and E-commerce sale/value of shipment/receipt for services and

other revenuesother revenues

QuantityQuantity• Quantity of individually important productsQuantity of individually important products (UN list of Industrial Products)(UN list of Industrial Products)

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InventoriesInventoriesCapital formation Capital formation • DwellingsDwellings• Other buildings and structuresOther buildings and structures• Machinery and equipmentMachinery and equipment

• Transport equipmentTransport equipment• ICT equipmentICT equipment• Other machinery and equipmentOther machinery and equipment

• Intellectual property productsIntellectual property products• Computer software and databaseComputer software and database• R&DR&D• Mineral exploration and evaluationMineral exploration and evaluation• Entertainment, literary and artistic originalsEntertainment, literary and artistic originals• OthersOthers

OrdersOrders• New ordersNew orders received received• Unfilled orders during the reference periodUnfilled orders during the reference period• Environmental protection expendituresEnvironmental protection expenditures

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Environmental protection expendituresEnvironmental protection expenditures• Environmental protection groups together all actions and activities Environmental protection groups together all actions and activities

that are aimed at the prevention, reduction and elimination of that are aimed at the prevention, reduction and elimination of pollution as well as any other degradation of the environment. This pollution as well as any other degradation of the environment. This includes measures taken in order to restore the environment after it includes measures taken in order to restore the environment after it has been degraded due to the pressures from human activitieshas been degraded due to the pressures from human activities

• Environmental protection is prime objective. Actions and activities Environmental protection is prime objective. Actions and activities which have a favourable impact on the environment but which serve which have a favourable impact on the environment but which serve other goals do not come under environmental protection. other goals do not come under environmental protection.

• Excluded are activities from field of environmental protection, Excluded are activities from field of environmental protection, which while beneficial to environment primarily satisfy technical which while beneficial to environment primarily satisfy technical needs or the internal requirements for hygiene or security of an needs or the internal requirements for hygiene or security of an enterprise.enterprise.

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3e. Valuation3e. Valuation

• Value added at basic pricesValue added at basic prices (preferred) (preferred)

• Value added at factor cost (second best option)Value added at factor cost (second best option)

Total value added vs Census value addedTotal value added vs Census value added

• National accounts value added (total value added) National accounts value added (total value added) recommended.recommended.

• Census value added optional - if countries desire to maintain Census value added optional - if countries desire to maintain their earlier time seriestheir earlier time series

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3f. Data items for 3f. Data items for International ReportingInternational Reporting Annual statisticsAnnual statistics

Data item Level of details

Reporting level(in terms ofISIC Rev. 4)

Time-lagAfter close

of yr

Demography

Number of establishments

By economic activity and size class

3-digit by economic activity

1-digit level for size class distribution

18 months

Employment

Total number of persons employed

--do-- ----do--- 18 months

Total number of employees

--do-- ---do--- 18 months

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3f. Data items for 3f. Data items for International International ReportingReporting

Annual statisticsAnnual statisticsData item Level of

detailsReporting

levelTime-lag

Compensation of employees

Wages and salaries in cash and in kind of employees

By economic activity

3-digit level of ISIC, Rev.4

18 months

Output

Gross output at basic prices



18 months

Value added

Total value added at basic prices



18 months

Gross fixed capital formation 18 months

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3f. Data items for 3f. Data items for International International ReportingReporting

Annual statisticsAnnual statisticsData item Level of

detailsReporting

levelTime-

lagEnvironment

Environmental protection expenditure



18 months

Total energy consumed(terajoules)



18 months

Total water used(cubic meters)



18 months

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3f. Data items for 3f. Data items for International ReportingInternational Reporting Quarterly statisticsQuarterly statistics

Data item Level of details

Reporting level

Time-lag

Employment

Total number of persons employed



3 months

Total number of employees



3 months

Compensation of employees

Wages and salaries in cash and in kind of employees



3 months

Sales/shipments, receipts for services and other revenues 3 months

Index of industrial production 2-digit level 3 months

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Thank YouThank You

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Data collection strategyData collection strategy

Universe of units engaged in industrial activitiesUniverse of units engaged in industrial activities

In BR In BR (list-frame segment)(list-frame segment)

Not in BRNot in BR(Non-list frame Segment)(Non-list frame Segment)

Without Fixed Without Fixed PremisesPremises

With fixed With fixed premisespremises

Area frameArea frame

Should be covered throughShould be covered throughSample surveysSample surveys

Small unitsSmall units

Covered eitherCovered eitherThrough Through samplesample

Surveys orSurveys orAdministrativeAdministrative

datadata

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Large unitsLarge units

PrivatePrivateSectorSector

Public sectorPublic sector

Segment 1: Segment 1: Large units should be Large units should be

covered on a complete covered on a complete enumeration basisenumeration basis

CompleteCompleteenumerationenumeration

Segment 2:Segment 2:Remaining through Remaining through

sample surveyssample surveys

1. All units on the business register are excluded from the area frame (i.e. non-list frame segment).1. All units on the business register are excluded from the area frame (i.e. non-list frame segment).2. All units in the sample that are part of a list frame segment and included therein are excluded from the sample of2. All units in the sample that are part of a list frame segment and included therein are excluded from the sample of non-list frame segment.non-list frame segment.

Documents

United Nations Statistics Division International Recommendations for Industrial Statistics (IRIS)