Office for National Statistics

Surveys and Economic Indicators Division

Room 2.301

Office for National Statistics (Newport)

Government Buildings

Cardiff Road

Newport

South Wales 

NP10 8XG

The UK Index of Production (IoP) is a monthly publication and measures output in production. The headline estimates are seasonally adjusted chained volume estimates. Production includes manufacturing, mining & quarrying, energy supply and water supply & waste management industries. The production industries account for 13.8% of the output approach to the measurement of UK Gross Domestic Products (GDP). The data sources are:

• turnover from the monthly business survey (MBS) for manufacturing and water supply and parts of mining and quarrying,
• volume estimates for the coal, oil and gas industry in mining and quarrying and energy supply industries data and mineral oil refining in manufacturing from the Department for Business, Energy and Industrial Strategy (BEIS)
• Industry 24.1-3 Crude steel production is collected by the International Steel Statistics Bureau on behalf of the UK Office for National Statistics
• Value Added Tax (VAT) data from Her Majesty's Revenue and Customs (HMRC) is used to supplement the turnover data for small and medium sized businesses in some industries
• Prices indicies, mainly Producer Prices and Export Prices to deflate turnover into volume estimates

There is no geographical region provided, however, work has been progressing at ONS on the development of quarterly regional output indicators. This will complete the coverage of the UK and provide users with timely indicators of economic growth at the NUTS1 level. The English region measures are planned to be published in the first half of 2019.

The Index of Production is classified by industry in line with NACE Rev. 2, which is the statistical classification of economic activities in the European Community. 

A link to NACE on the Eurostat website:  https://ec.europa.eu/eurostat/web/products-manuals-and-guidelines/-/KS-RA-07-015

The industries included in the Index of Production are as defined by the United Kingdom Standard Industrial Classification (UKSIC) 2007 sectors B to E inclusive. Businesses within MBS are classified according to a Standard Industrial Classification (SIC) based on their predominating business activity. The SIC 2007 classification was introduced in the August 2011 released in October 2011 and represents the first major revision of the classification structure since 1992.

A link to the IoP industries published and their weights can be found here:

https://www.ons.gov.uk/economy/economicoutputandproductivity/output/datasets/indexofproductionweights2012100

The UK Index of Production covers industrial sectors:

• B - Mining & Quarrying
• C - Manufacturing
• D - Energy Supply
• E - Water and waste supply

The data are published on our website for the industries listed in the IoP Weights tab of the following excel spreadsheet:

https://www.ons.gov.uk/economy/economicoutputandproductivity/output/datasets/indexofproductionweights2012100

The Monthly Business Survey (MBS) questionnaires collect turnover and export turnover information every month, in addition to the number of employees once a quarter. The industries included in the Index of Production are as defined by the United Kingdom Standard Industrial Classification (UKSIC) 2007 sectors B to E inclusive. Businesses within MBS are classified according to a Standard Industrial Classification (SIC) based on their predominating business activity. The SIC 2007 classification was introduced in the August 2011 release in October 2011 and represents the first major revision of the classification structure since 1992.

The enterprise or the activities of a specified list of local units belonging to an enterprise are used as the reporting unit. Very often the latter of these is close to the KAU (Kind-of Activity Unit). The observation unit is the same as the reporting unit. 

The data for industry 05 Coal, 06 Oil and Gas extration and 19 Mineral Oil Refining and D Energy Supply are collected by census by the Department for Business, Energy and Industrial Strategy. Data for industry 24.1-3 Crude steel production is a census conducted on behalf of ONS by the International Steel Statistics Bureau. 

The remaining data is mainly collected from the Monthly Business Survey, a survey is sent to around 6,000 businesses. The Inter Departmental Business Register (IDBR) is the sampling frame for businesses used by the Monthly Business Survey. The Inter Departmental Business Register (IDBR), are updated regularly and contains around 145,000 companies which fall under sectors B, C and E (excluding industry 06 and 19 and 24.1-3).  Large businesses are sent survey forms continuously, while smaller companies are rotated. 

A link to further information on the IDBR

https://www.ons.gov.uk/aboutus/whatwedo/paidservices/interdepartmentalbusinessregisteridbr

The geographical area covered is the United Kingdom without geographical breakdown.  The United Kingdom consists of  four constituent countries England, Scotland, Wales and Northern Ireland this is the case throughout the timeseries.  

The Index of Production index starting point is Q1 1948, on a quarterly basis.  There are monthly data from January 1968. These startpoint applies to the following totals:

• Total IoP
• B 
• C
• CA
• CB
• CC
• CD
• CE
• CF
• CG
• CH
• CI
• CJ
• CK
• CL
• CM
• D
• E

Other detailed level indices and Main Industrial Groupings (MIGs) have monthly indices which begin in January 1997. 

The current base year is 2016 and usually is moved on by a year each year in our Blue Book consistent publication. The IoP and all associated series were rebased onto a 2016 = 100 basis in May 2018.

Index numbers 2016=100. These are available:

• Monthly
• Quarterly
• Annually

Monthly, using a calendar month.

The Monthly Business Survey data feeding into the Index of production is collected under the Statistics of Trade Act 1947. This act means that the provision of information is mandatory and legal action can be taken against companies who refuse to provide this information to avoid deterioration of response rates.

Access to pre-released statistics, including the Index of Production, were abolished from 1 July 2017

https://www.statisticsauthority.gov.uk/wp-content/uploads/2017/07/Letter-from-John-Pullinger-to-Sir-David-Norgrove-15-June-2017.pdf

ONS transmits Index of Production data to Eurostat via SDMX, around the 10th working day of the calendar month in which the data are due to be published.  The statistics are sent under embargo if the IoP has not yet been published in the UK, in order that Eurostat are able to compile results. The UK has usually published by the 12th of the month. 

The United Kingdom Statistics Authority has designated these statistics as National Statistics in accordance with the Statistics and Registration Service Act 2007 and signifying compliance with the code of Practice for Official Statistics. Details of the policy governing the release of new data are available by visiting: https://www.statisticsauthority.gov.uk/code-of-practice/the-code/trustworthiness/t6-data-governance/

Statistical disclosure control methodology is applied to the MBS data. This ensures that information attributable to an individual or individual organisation is not identifiable in any published outputs. The Code of Practice for Official Statistics and specifically the Principle on Confidentiality set out practices for how we protect data from being disclosed. The Principle includes the statement that ONS outputs should “ensure that official statistics do not reveal the identity of an individual or organisation, or any private information relating to them, taking into account other relevant sources of information”. 

Data is protected in order that only tem members directly working on the results are able to see the companies information with relevant access permissions.  Results are aggregated for publication. 

The Index of Production release dates are published on the ONS website for 12 months ahead

https://www.ons.gov.uk/releasecalendar?query=index+of+production&fromDateDay=&fromDateMonth=&fromDateYear=&toDateDay=&toDateMonth=&toDateYear=&view=upcoming&size=10

The ONS release calender is available to everyone.

See 8.1 and select 'Release calendar' 'upcoming releases' and search for Index of Production.

The data is released on the ONS website at 9:30 on the release date.

For around 1 hour prior to the release, a press briefing is held with the UK media, they are able to release their information at 9.30 on the release date. 

Data are sent to Eurostat using SDMX format on the same day as National dissemination in most cases as the date of publication aligns with Eurostat requirements. 

Monthly

A statistical bulletin in published to accompany the statistics every month: https://www.ons.gov.uk/economy/economicoutputandproductivity/output/bulletins/indexofproduction/previousReleases

A press briefing is held on the day of release.

During times of methodological changes (the annual Blue Book round) articles can be published to present changes to data. 

The Index of Production is published on a monthly basis in a Statistical Bulletin which includes publication tables for the higher level aggregates in addition to all data being available to download for both seasonally adjusted and non-seasonally adjusted chained volume measures of IoP

https://www.ons.gov.uk/economy/economicoutputandproductivity/output/bulletins/indexofproduction/previousReleases

The IOP time series data set is available online in the ONS official site: https://www.ons.gov.uk/economy/economicoutputandproductivity/output/datasets/indexofproduction

Microdata is available to researchers, EconLab is a secure drive for economic analysis of microdata. All economists with access to EconLab receive Virtual Microdata Laboratory (VML) training before they are granted access so that they understand the importance of data security and non-disclosure. A contact for EconLab is ciaren.taylor@ons.gov.uk

Data are transmitted to Eurostat on the day of release.

Documentation including articles on methodology and sources are published on the ONS website.  See the bottom of the page in the attached link.

In addition, information is provided in the Quality and Methodology Information and statistical releases

https://www.ons.gov.uk/businessindustryandtrade/business/businessservices/

https://www.ons.gov.uk/economy/economicoutputandproductivity/output/

A summary quality report (133 kB pdf) for the Index of production can now be found on the ONS website

https://www.ons.gov.uk/economy/nationalaccounts/uksectoraccounts/methodologies/ukindexofproductionqmi

ONS has developed Guidelines for Measuring Statistical Quality ; these are based upon the European Statistical System (ESS) quality dimensions. - More information can be found on the ONS website, see the following link for further details

https://webarchive.nationalarchives.gov.uk/20160106003751/http://www.ons.gov.uk/ons/guide-method/method-quality/quality/guidelines-for-measuring-statistical-quality/index.html

The work the Office for National Statistics (ONS) is undertaking to monitor the quality of published statistics, and develop improvements to existing data can be found in the following link:

https://www.ons.gov.uk/economy/nationalaccounts/uksectoraccounts/methodologies/ukindexofproductionqmi

https://www.ons.gov.uk/businessindustryandtrade/business/businessservices/methodologies/monthlybusinesssurveyqmi

Furthermore the UK Statistics Authority publishes a report on each assessment it carries out. The IOP is assessment as part of the Short term Economic output Indicators and the assessment can be found in the following link, report number 278.

https://www.statisticsauthority.gov.uk/

IoP is intended to provide a general measure of monthly changes in the volume of output of production industries. The IoP shares exactly the same industry coverage as the corresponding quarterly series within Gross Domestic Product (GDP). The UK IoP has existed in more or less its present form since the late 1940s, publishing four broad production categories of manufacturing, mining and quarrying, energy and water supply and sewerage.

The IoP has three primary uses:

• As a short-term economic indicator in its own right. The Government and the Bank of England, among others, monitor the IoP as an important indicator of industrial activity

• As a component of the production or output measure of GDP, the IoP contributes to the UK National Accounts

• As a requirement for the Statistical Offices of the European Community (Eurostat) – information on production and current price sales are provided to Eurostat

User Satisfaction was assest as part of  the UK Statistics Authority published assessments. In addition to face to face meetings with key stakeholders. The IOP assessment is part of the short term economic output indicators assessment, see report number 278: Statistics on GDP, and Indices of Production and Services dated 3 April 2014.

https://www.statisticsauthority.gov.uk/

All STS requirements are fulfilled.

The monthly measure of IoP is equivalent to the production sector of quarterly GDP, which uses the same data. The only difference is the periodicity of output. Therefore, the average of the three months of a quarter in a published IoP series equals the corresponding quarterly value in GDP Ouptut. One dimension of measuring accuracy is reliability, which can be measured using evidence from analyses of revisions to assess the closeness of early estimates to subsequently estimated values. The results of revisions analysis are regularly presented in the background notes of IoP Statistical Bulletins available on the ONS website. Spreadsheets giving revisions triangles of estimates for all months from December 1997 through to the current month are also available from this page:

https://www.ons.gov.uk/economy/economicoutputandproductivity/output/datasets/revisionstooutputoftheproductionindustries

ONS published Survey Methodological Bulletin No.75, Spring 2016 containing Standard Errors of movement in the Index of Production. Standard Errors of the movement of IoP have been calculated at two frequencies of growth: month on previous month (monthly growths); and month on same month a year ago (12-month growths). Standard Errors of the movement have been calculated at the overall IoP, or All Industry level as well as at the section level. NOTE: Calculations have not been made on Section D as the data obtained for that section is a census of the industries, hence standard errors are zero.

https://www.ons.gov.uk/file?uri=/methodology/methodologicalpublications/generalmethodology/surveymethodologybulletin/surveymethodologybulletinno.75spring2016.pdf

Since this analysis was conducted, the methodology of the IoP was changed, to include Her Majesty's Revenue and Customs Value Added Tax to supplement the Monthly Business Survey data. This analysis will be repeated in the future to include this data. 

The response rate reached 85% at the time of first publication but rises to upto 95% at the time of the final release.

The ONS National Statistics Release Calendar is available online and provides twelve months advanced notice of releases. Publication dates are fixed and have never been delayed or missed. In the unlikely event of a change to the pre-announced release schedule, public attention should be drawn to the change and the reasons for the change should be explained fully at the same time, as set out in the Code of Practice for Official Statistics. The IoP is usually published approximately 26 working days after the end of the reference month. It is the earliest official indicator of the performance of UK industry.

The Index of Production output including data is published at 9:30 am on the day of release and is always punctual.

The Index of Production is produced in accordance with ESA10 regulation and Eurostat guidance on producing short-term statistics. 

The UK Index of Production is referenced to 2016=100 and therefore, when comparing with other countries may require re-indexing.  Eurostat and OECD re-reference UK Index of Production to 2015 at present. 

Every effort is made to ensure that the series is comparable over time, and a comparable time series is available back to 1948. Where possible, changes to methodology are applied to the whole series to ensure this comparability is maintained.

The IOP data are derived from Monthly Business Survey (MBS). There is no internal comparable monthly source, but after two years when annual turnover becomes available from the Annual Business Inquiry (ABI), checks can be undertaken to ensure consistency between the 12 monthly returns and the data returns from large businesses. Also Data from the IoP are a direct input to the quarterly GDP dataset. Thisindicates that the datasets are entirely consistent with no quality adjustments made to the production data within GDP.

There is no comparable monthly source, see 15.3. All component data are consistent with the relevant aggregates into which they feed. Additionally, all adjusted annual data are equal to the unadjusted annual data for the equivalent series.

The Online List for UK Govenrment Surveys is here: https://gss.civilservice.gov.uk/archive/about/surveys/survey-control-unit/online-list-of-government-statistical-surveys/index.html

IoP is covered by: Business Survey (Production & Services) (009)

Cost to produce the IOP: Number of units 6000 ; cost (NSI) hours per year 19,521; Burden (respondents) hours per year 3887.

The National Accounts revisions policy is designed to give users a clear understanding of which periods are open for revision at each data release:

https://www.ons.gov.uk/methodology/methodologytopicsandstatisticalconcepts/revisions/revisionspoliciesforeconomicstatistics/nationalaccountsrevisionspolicyupdateddecember2017

Revisions to Eurostat transmissions are only open to revise by 2 months, when National Accounts revisions policy permits revisions to these periods. 

The series delivered to Eurostat do not follow the same revisions policy as the national UK. They are on average open for 2 months of revisions from the current period, provided these periods are open in the UK. The mean revision and mean absolute revision can be found in the attached files for:

1. Unadjusted data Industrial Production (BTD) year-on-year growth rates

2. Calendar adjusted Industrial Production (BTD) year-on-year growth rates

3. Seasonal and calendar adjusted Industrial Production (BTD)  period on period growth rates

The National Accounts revisions policy for UK is designed to give users a clear understanding of which periods are open for revision at each data release and why incorporating revisions from a single source is not a simple matter. Furthermore  information about revisions is regularly published in the background notes of the monthly IOP statistical bulletin. Notification of major changes in methodology are also published if occured. 

The Value Added Tax from HMRC is currently taken on as a revision to IoP, because this quarterly data is not timely in the latest periods. This data adds an additional quarter of VAT every three months and previous data can also be revised https://www.ons.gov.uk/economy/grossdomesticproductgdp/methodologies/vatturnoverdatainnationalaccountsbackgroundandmethodology

Additional revisions (usually to the latest periods) arise from late responses which revise imputes for the Monthly Business Survey. 

Benchmarking is carried out with the ONS annual structural statistics and supply use tables, however, this does not impact on the revisions delivered to Eurostat because revisions are delivered only for two periods.  In the UK, these revisions will affect published chained volume estimates following the introduction of double deflation in Blue Book 19, from October/November 2019. 

Revisions triangles for the UK Index of Production (BTE) and Manufacturing, following the UK national accounts revisions policy can be found on the ONS website, published on a monthly basis with the Index of Production release 

https://www.ons.gov.uk/economy/economicoutputandproductivity/output

The majority of data used to compile the manufacturing sector (the largest component of Index of Production), and thus the Index of Production is collected via the Monthly Business Survey (MBS). Data also collected from other government departments:

- Department for Business, Energy and Industrial Strategy (BEIS) for fuel industries; including volume of oil & gas extraction and coal extraction; energy and gas supply output

- Iron and Steel Statistics Bureau (ISSB) for steel industries

Monthly

The Monthly Business Survey has moved online, although paper questionnaires and automated Telephone Data Entry (TDE) is still available to businesses. In small number of cases information received via secure e-mails from other government departments, for example Department for Business, Energy and Industrial Strategy (BEIS).

Our International Business Unit have taken over data collection for some of our largest multi-national companies and are developing taylored business account management type questions in these cases. 

The MBS uses an editing and validation approach known as selective editing. Selective editing is an internationally recognised method that uses a data based approach to assess the influence of business estimates on the aggregate outputs. 

The Index of Production Quality and Methodological report provides further information

https://www.ons.gov.uk/economy/nationalaccounts/uksectoraccounts/methodologies/ukindexofproductionqmi

IoP indices are seasonally adjusted by estimating and removing systematic calendar related effects from the non-seasonally adjusted estimates. Seasonal adjustment is performed each month using the standard, widely used software package X-12-ARIMA-SEATS.  This is the recommended method. 

The annual seasonal adjustment review is also performed using X-12-ARIMA-SEATS. The seasonally adjusted estimates also have corrections for bank holidays: Easter effects, which are caused when Easter falls late in March or early in April, and the day of the week on which Christmas occurs. Prior corrections are applied as necessary. Corrections are estimated and applied where there is a statistically significant effect. The calculation of the IoP has an adjustment to compensate for calendar effects which arise from the difference in the reporting periods.

A metadata report is attached, still in draft status

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