|Index number||Month on the same month a year ago||3 months on the same 3 months a year ago||Month on previous month||3 months on previous 3 months|
As Figure 1 shows, between 2003 and 2007, manufacturing output increased at a faster rate than total production, mainly due to declines in oil and gas extraction. While manufacturing fell by a greater rate than production during the economic downturn in 2008-09, the growth of manufacturing was greater between mid-2009 and 2011.
The long term series for each component of production tell different stories about the evolution of output since 2003. Manufacturing, electricity, steam & air conditioning and the water supply & waste management components have remained broadly flat since 2005, while there has been a long term decline in mining & quarrying due to extraction of oil & gas which makes up the bulk of this industry. Oil & gas extraction has declined over the last 13 years as many of the North Sea oil and gas reserves have become more difficult to extract. Additionally, extraction equipment has aged such that rigs have required more extensive repairs and maintenance in recent years. There has also been a steady decline in energy supply from 2000 onwards, albeit to a lesser extent than that witnessed in oil & gas extraction.
The preliminary estimate of GDP, published on 25 July 2013, contained a forecasted rise of 0.6% for production in Q2 2013. This release of data also estimates production rose by 0.6% between Q1 2013 and Q2 2013 and therefore has no impact on the previously published quarter two 2013 GDP estimate.
The estimates for the production industries are the first of the main components for the output approach to the measurement of GDP (construction and services are the other components) to be published for June 2013, the third month of Q2 2013. All the components are already available for April 2013 and May 2013. Details of the data already published can be found in table 2. Output in the construction industry will be published on 9 August 2013 and services output on 23 August 2013 alongside the Second Estimate of Gross Domestic Product for Q2 2013.
|Publication||% of GDP||Release date||Month / Quarter of GDP||Most recent 3 months on a year earlier||Most recent 3 months on 3 months earlier||Most recent month on the same month a year ago||Most recent month on the previous month|
|Index of Production 1||15.2||6 August 2013||Jun||-0.8||0.6||1.2||1.1|
|Construction output 2||6.3||12 July 2013||May||..||..||-4.8||-|
|Index of Services||77.8||25 July 2013||May||1.6||0.8||1.5||0.2|
|Retail Sales||18 July 2013||Jun||1.8||0.9||2.2||0.2|
|Agriculture||0.7||25 July 2013||Q2||-5.6||1.1||..||..|
The data for the index of production reflect the latest revisions published as part of this release.
Construction output is a constant price seasonally adjusted measure
Production rose by 0.6% in Q2 2013 when compared with Q1 2013. The increase in Q2 2013 reflects rises of 1.4% in mining & quarrying; 0.7% in manufacturing and 2.3% in the water, sewerage & waste management sectors. These rises were partially offset by a fall of 2.4% in the electricity, gas, steam & air conditioning sector.
Between June 2012 and June 2013 production rose by 1.2%. This increase reflects rises of 2.0% in manufacturing and 7.8% in the water, sewerage & waste management sectors. These rises were partially offset by falls of 4.4% in mining & quarrying; and 3.3% in the electricity, gas, steam & air conditioning sectors.
Users should be cautious when comparing movements between June 2012 and June 2013 data. There were two fewer working days in June 2012, which may have been a contributing factor to the growth between these two periods.
Between May 2013 and June 2013 production rose by 1.1%, following three consecutive periods of 0.0% growth. This increase reflects rises of 1.9% in manufacturing; 0.7% in mining & quarrying and 2.3% in the water, sewerage & waste management sectors. These rises were partially offset by a fall of 5.8% in the electricity, gas, steam & air conditioning sector.
The last time production rose quarter on quarter, month on same month a year ago and month on month was September 2010.
Manufacturing rose by 0.7% in Q2 2013 when compared with Q1 2013. The largest upward contributions in manufacturing output were from the manufacture of basic pharmaceuticals products & pharmaceuticals preparations which rose by 8.3%; the manufacture of transport equipment, which rose by 1.7%; and the manufacture of electrical equipment, which rose by 4.8%. In contrast, the largest downward contributions were from other manufacturing & repair, which fell by 1.8%; the manufacture of basic metals & metal products, which fell by 1.3%; and the manufacture of computer, electronic & optical products, which fell by 1.3%.
Manufacturing rose by 2.0% between June 2012 and June 2013. The largest upward contributions in manufacturing output were from: the manufacture of transport equipment, which rose by 12.5%; the manufacture of wood & paper products, which rose by 10.1%; and the manufacture of basic pharmaceutical products & pharmaceutical preparations, which rose by 6.1%. In contrast, the most significant decreases came from the manufacture of machinery & equipment not elsewhere classified, which fell by 13.5%; the manufacture of food products, beverages & tobacco, which fell by 2.4%; and the manufacture of coke & refined petroleum products, which fell by 1.8%.
Between May 2013 and June 2013 manufacturing rose by 1.9%. This reflects rises in all of its thirteen sectors. The largest contributions to manufacturing output were from: the manufacture of transport equipment, which rose by 5.3%; other manufacturing & repair, which rose by 3.3%; and the manufacture of computer, electronic & optical products, which rose by 3.1%.
The last time manufacturing rose quarter on quarter; month on same month a year ago and month on month was June 2011.
Output of the mining & quarrying sector rose by 1.4% in Q2 2013 when compared with Q1 2013. The increase reflected a rise in other mining & quarrying, which rose by 6.2% and a fall in the mining of coal & lignite, which fell by 19.8%, while the extraction of crude petroleum & natural gas sector remained unchanged.
Between June 2012 and June 2013 mining & quarrying fell by 4.4%. The extraction of crude petroleum & natural gas fell by 13.3%, reflecting the impact of the extended maintenance periods in some of the oil and gas fields in the North Sea, and a fall of 25.0% in the mining of coal & lignite - a result of the mothballing of and lower production in some collieries in recent months. These decreases were partially offset by other mining & quarrying which rose by 26.9%.
Mining & quarrying rose by 0.7% between May 2013 and June 2013. The main contributor to the rise is other mining & quarrying, which rose by 5.2%. Offsetting this rise were falls in the extraction of crude petroleum & natural gas, which fell by 1.1%, reflecting planned maintenance in some oil terminals and reduced demand for gas due to a recent gradual increase in temperature; and in the mining of coal & lignite, which fell by 5.2%.
Electricity, gas, steam & air conditioning output fell by 2.4% in Q2 2013 when compared with Q1 2013. The manufacture of gas & distribution of fuel sector fell by 8.9% but was partially offset by the electric power generation, transmission & distribution sector, which rose by 0.1%.
Between June 2012 and June 2013 the electricity, gas steam & air conditioning output fell by 3.3% with falls in both of its sectors. The electric power generation, transmission & distribution sector fell by 2.4% and the manufacture of gas & distribution of fuel sector fell by 5.8%.
Between May 2013 and June 2013 the electricity, gas, steam & air conditioning output fell by 5.8% with falls in both of its sectors. The electric power generation, transmission & distribution sector fell by 5.5% and the manufacture of gas & distribution of fuel sector fell by 6.6%.
Water supply, sewerage & waste management output rose by 2.3% in Q2 2013 when compared with Q1 2013 with rises in all of its sectors. Sewerage rose by 3.7%; water collection, treatment & supply rose by 2.8%; waste collection, treatment & disposal activities rose by 1.2%; and remediation activities & other waste management services rose by 2.0%.
Between June 2012 and June 2013 water supply, sewerage & waste management output rose by 7.8%. Waste collection, treatment & disposal activities rose by 8.9%; sewerage rose by 7.1%; water collection, treatment & supply rose by 6.7%; and remediation activities & other waste management services rose by 8.9%.
Between May 2013 and June 2013 water supply, sewerage & waste management output rose by 2.3%. Waste collection, treatment & disposal activities rose by 3.0%; sewerage rose by 2.9%; water collection, treatment & supply rose by 0.4%; and remediation activities & other waste management services rose by 1.6%.
The Index of Production (IoP) estimates the output of the production industries in the United Kingdom. Figures are adjusted for seasonal variations unless otherwise stated and the reference year is 2010 = 100. For an explanation of the terms used in this bulletin, please see the Background Notes section. Care should be taken when using the month on month growth rates due to their volatility. An assessment of the quality of the production statistics is available in the background notes.
|Description||% of production||Month on same month a year ago growth (%)||Contribution2 to production (% points)||Month on previous month growth (%)||Contribution2 to production (% points)|
Headline figures for the Index of Production are:
Total Index of Production; Sector B Mining & quarrying; and within this Division 06 Oil & gas extraction; Sector C Manufacturing; Sector D Electricity, gas, steam & air conditioning; and Sector E Water supply, sewerage & waste management.
Individual contributions may not sum to the total due to rounding.
Mining & quarrying rose by 1.4% between Q1 2013 and Q2 2013 and contributed 0.2 percentage points to the Index of production (IoP).
i) The highest contributor to the rise was the other mining & quarrying sector, which rose by 6.4% and contributed 1.7 percentage points to the rise.
ii) Although there was month on month volatility, the extraction of crude petroleum & natural gas remained flat between Q1 and Q2.
iii) The rise was slightly offset by a fall in the mining of coal & lignite, which fell by 19.8% and contributed -0.3 percentage points to the rise. This fall reflects the downward trend in this industry over recent months as a result of the mothballing of some collieries.
Mining & quarrying rose by 0.7% between May 2013 and June 2013 and contributed 0.1 percentage points to the IoP.
i) The other mining & quarrying sector was the highest contributor to the rise, which rose by 5.2% and contributed 1.5 percentage points to the rise. Exports and the weather were identified as possible contributing factors.
ii) The rise was offset by a fall of 1.1% in the extraction of crude petroleum & natural gas sector and contributed -0.8 percentage points to the rise.
iii) The rise was also offset by a fall in the mining of coal & lignite, which fell by 5.2% on the month and contributed -0.1 percentage points to the rise.
Manufacturing rose by 0.7% between Q1 2013 and Q2 2013 and contributed 0.5 percentage points to the IoP.
i) Output increased in seven of the 13 manufacturing sub-sectors and fell in six.
ii) The highest contributor to the rise was the manufacture of basic pharmaceuticals products & pharmaceuticals preparations, which rose by 8.3% and contributed 0.6 percentage points to the rise.
iii) The rise was partially offset by other manufacturing & repair, which fell by 1.8% and contributed -0.2 percentage points to the rise.
Manufacturing rose by 1.9% between May 2013 and June 2013 and contributed 1.4 percentage points to the IoP.
i) Output increased in all of the manufacturing sub-sectors.
ii) The highest contributor to the rise was the manufacturing of transport equipment, which rose by 5.3% and contributed 0.7 percentage points to the rise in manufacturing. This reflects a rise in the manufacture of motor vehicles, trailers & semi trailers sub-sector, which rose by 7.3% and contributed 0.6 percentage points to this sector. This is a result of the boost this industry has seen over recent months with the production of new models, strong sales and exports.
Electricity, gas, steam & air conditioning supply fell by 2.4% between Q1 2013 and Q2 2013 and contributed -0.2 percentage points to the rise in the IoP.
i) The highest contributor to the fall was the manufacture of gas & distribution of fuel sector, which fell by 8.9% and contributed -2.4 percentage points to the fall.
Electricity, gas, steam & air conditioning supply fell by 5.8% between May 2013 and June 2013 and contributed -0.5 percentage points to the rise in the IoP.
i) The electric power generation, transmission & distribution sector fell by 5.5% and contributed -4.1 percentage points to the fall.
The fall in this sector reflects the rise in temperature in May and June, following the particularly cold weather during Q1 2013 and the use of coal as fuel, since November 2011, for the generation of electricity in replacement of gas.
Water supply, sewerage & waste management rose by 2.3% between Q1 2013 and Q2 2013 and contributed 0.2 percentage points to the increase in the IoP.
i) There were increases in all of its sectors with the highest contributor being sewerage, which increased by 3.7% and contributed 1.1 percentage points to the rise.
Water supply, sewerage & waste management rose by 2.3% between May 2013 and June 2013 and contributed 0.2 percentage points to the increase in the IoP.
i) Waste collection, treatment & disposal activities rose by 3.0% and contributed 1.3 percentage points to the rise. This rise reflects the strength in the recycling industry over recent months.
The latest preliminary estimate of gross domestic product indicated the UK economy grew by 0.6% in Q2 2013. Production grew in line with this, with quarter-on-quarter growth of 0.6%. Service industries also matched this increase while construction output experienced the greatest rise, a quarterly increase of 0.9%.
UK consumer price inflation increased in June, with the Consumer Prices Index rising by 2.9% compared with a year ago. The increase in total average weekly earnings slowed to 1.5% in May, down from 3.3% in April, suggesting that household experienced a renewed squeeze in their real wages. The prices of goods produced by UK manufacturers – or ‘factory gate prices’ – rose by 0.2% between May and June having remained constant between April and May. Input prices for all manufactured goods increased by 0.2% over the same period.
Economic conditions in the euro area remain difficult. The latest estimate of euro area GDP confirmed that output fell by 0.2% in Q1 2013 compared with Q4 2012, continuing the trend from 2012 of slight falls in quarterly output. Inflation edged up to 1.6% in June from 1.4% in May, though this varies by country. The UK is at the upper end of this scale, somewhat eroding the international competitiveness of the economy. By contrast, economic growth in the United States of America picked up in Q1 2013 compared with Q4 2012. The USA labour market also continues to show signs of improvement, though the unemployment rate edged up by 0.1 percentage points in May from April to 7.6%.Since 2011 the production industries of the G7 economies have remained broadly stagnant. However, comparing Q1 2013 with Q4 2012, G7 production grew by 1%, reaching a level of output last recorded in Q4 2011. Looking at the country level there is wide disparity in performance. Production in Canada, Japan and the USA has grown while the other G7 nations, including the UK, have stagnated, or in Italy’s case, continued to decline further.
This release conforms to the standard revisions policy for National Accounts (27.8 Kb Pdf) . In accordance with the policy, the current revisions period is open back to April 2013.
Following consultation with users, ONS are no longer producing the Index of Production summary statistics table. Records of any significance will be highlighted in the main text of the statistical bulletin.
A report titled GDP Output Improvement Report June 2013 (226.7 Kb Pdf) was published on 27 June 2013. This report provides a detailed update of the work on industry reviews and wider improvements to IoP, IoS, GDPO and outlines the greater scope of the project as part of the GDP Continuous Improvement Programme.
Special Events in 2012
The Diamond Jubilee and the London 2012 Olympic and Paralympic Games made 2012 an unusual and difficult year for policymakers and anybody interested in understanding the behaviour of the UK economy. ONS designated both events as 'special events' under the ONS Special Events policy as they had a potentially significant effect on many key economic statistics. An article published by ONS on 17 May 2013 took a retrospective look at each event and considered the impact on a range of published economic indicators, including GDP.
As part of the celebrations for the Queen's Diamond Jubilee there were changes to bank holidays in May and June 2012. The change to the holidays count as a statistical special event in line with ONS's policy on Special Events. In 2012 there were two additional bank holidays in June. This event is not regular, so no adjustment has been made to account for it as part of the seasonal adjustment process. Users are therefore likely to see an effect related to two fewer working days in June 2012 in the estimate of the annual change (and there was also an effect on the annual change in May associated with one extra working day in May 2012). More information on the movements in series in 2012 can be found here.
The index of production release for July 2013, to be published on 6 September 2013, will have a revisions period back to April 2013.
Code of Practice for Official Statistics
National Statistics are produced to high professional standards set out in the Code of Practice for Official Statistics. They undergo regular quality assurance reviews to ensure that they meet customer needs. They are produced free from any political interference. © Crown copyright 2013.
Understanding the data
Short guide to the Index of Production
This Statistical Bulletin gives details of the index of output of the production industries in the United Kingdom. Index numbers of output in this Statistical Bulletin are on the base 2010=100 and are classified to the 2007 Standard Industrial Classification (SIC). The production industries, which accounted for 15.2% of gross domestic product in 2010, cover mining & quarrying (Sector B), manufacturing (Sector C), gas & electric (Sector D), and water supply & sewerage (Sector E).
Interpreting the data
The non-seasonally adjusted series contain elements relating to the impact of the standard reporting period, moving holidays and trading day activity. When making comparisons it is recommended that users focus on seasonally adjusted estimates as these have the seasonal effects and systematic calendar related components removed.
Figures for the most recent months are provisional and subject to revision in light of (a) late responses to surveys and administrative sources and (b) revisions to seasonal adjustment factors which are re-estimated every month and reviewed annually (changes from the latest review are included in this release).
Definitions and explanations
Definitions found within the main statistical bulletin are listed here:
Chained volume measure
An index number from a chain index of quantity. The index number for the reference period of the index may be set equal to 100 or to the estimated monetary value of the item in the reference period.
A measure of the average level of prices, quantities or other measured characteristics relative to their level for a defined reference period or location. It is usually expressed as a percentage.
Seasonal adjustment aids interpretation by removing effects associated with the time of the year or the arrangement of the calendar, which could obscure movements of interest.
Use of the data
The IoP is a key economic indicator and one of the earliest short-term measures of economic activity. The main output is a seasonally adjusted estimate of total production and broad sector groupings of mining & quarrying, manufacturing, energy and water supply & sewerage. The total IoP estimate and various breakdowns are widely used in private and public sector institutions, particularly the Bank of England and Her Majesty’s Treasury, to assist in informed policy and decision making.
Composition of the data
The Index of Production uses a variety of different data from sources which are produced on either a quarterly or monthly basis.
Most of the series are derived using current price turnover deflated by a suitable price index. This includes the Monthly Business Survey (MBS) data; an ONS short-term survey on different sectors of the economy. It is one of the main data sources used in the compilation of the Index of Production.
The index numbers in this statistical bulletin are all seasonally adjusted. This aids interpretation by removing annually recurring fluctuations, for example, due to holidays or other regular seasonal patterns. Unadjusted data are also available.
Seasonal adjustment removes regular variation from a time series. Regular variation includes effects due to month lengths, different activity near particular events such as shopping activity before Christmas, and regular holidays such as the May bank holiday. Some features of the calendar are not regular each year, but are predictable if we have enough data - for example the number of certain days of the week in a month may have an effect, or the impact of the timing of Easter. As Easter changes between March and April we can estimate its effect on time series and allocate it between March and April depending on where Easter falls. Estimates of the effects of day of the week and Easter are used respectively to make trading day and Easter adjustments prior to seasonal adjustments.
Although leap years only happen every four years, they are predictable and regular and their impact can be estimated. Hence, if there is a leap year effect, it is removed as part of regular seasonal adjustment.
It is common for the value of a group of financial transactions to be measured in several time periods. The values measured will include both the change in the volume sold and the effect of the change of prices over that year. Deflation is the process whereby the effect of price change is removed from a set of values.
All series, unless otherwise quoted, are measured at constant basic prices. Deflators adjust the value series to take out the effect of price change to give the volume series.
Basic quality information
A common pitfall in interpreting data is that expectations of accuracy and reliability in early estimates are often too high. Revisions are an inevitable consequence of the trade off between timeliness and accuracy. Early estimates are based on incomplete data.
Very few statistical revisions arise as a result of ‘errors’ in the popular sense of the word. All estimates, by definition, are subject to statistical ‘error’ but in this context the word refers to the uncertainty inherent in any process or calculation that uses sampling, estimation or modelling. Most revisions reflect either the adoption of new statistical techniques, or the incorporation of new information which allows the statistical error of previous estimates to be reduced. Only rarely are there avoidable ‘errors’ such as human or system failures, and such mistakes are made quite clear when they do occur.
National Accounts revisions policy
Figures for the most recent months are provisional and subject to revision in light of (a) late responses to the Monthly Business Survey MBS and (b) revisions to seasonal adjustment factors which are re-estimated every period.
The index of production release for July 2013 will have a revisions period back to April 2013.
National Accounts revision policy (27.8 Kb Pdf) can be found on the National Statistics website.
One indication of the reliability of the key indicators in this bulletin can be obtained by monitoring the size of revisions. The table below is based on the revisions which have occurred over the last five years. Please note that these indicators only report summary measures for revisions. The revised data may, themselves, be subject to sampling or other sources of error.
The following table presents a summary of the differences between the first estimates published between July 2007 and June 2012 and the estimates published 12 months later.
|Growth rates||Value in latest period||Average||Absolute average|
|Production - 3 month||0.7||-0.15||0.31|
|Manufacturing - 3 month||0.7||-0.17||0.36|
|Production - 1 month||1.2||-0.11||*||0.26|
|Manufacturing - 1 month||1.9||-0.10||0.29|
Spreadsheets give revisions triangles (3.77 Mb ZIP) of estimates for all months from March 1998 through to the current month.
A statistical test has been applied to the average revisions to find out if they are statistically significantly different from zero. An asterisk (*) indicates if a figure has been found to be statistically significant from zero.
The table uses historical data for the most recent 60 months, comparing the estimate at first publication with the estimate as published 12 months later. The numbers which underpin these averages will include normal changes due to late data and re-seasonal adjustment, but also significant methodological changes, the most recent being the introduction of the 2007 Standard Industrial Classification in October 2011.
Details of the policy governing the release of new data are available from the press office. Also available is a list of those given pre-publication access to the contents of this release.
A complete set of series in the Statistical Bulletin are available to download free of charge on the Data section of the Office for National Statistics website. Alternatively, for low-cost tailored data, call Online Services on 0845 601 3034
or email Customer Contact Centre.
The complete run of data in the tables of this Statistical Bulletin is also available to view and download in electronic format free of charge using the ONS Time Series Data service. Users can download the complete bulletin in a choice of zipped formats, or view and download their own selections of individual series.
ONS provides an analysis of past revisions in the IoP and other Statistical Bulletins (244.6 Kb Pdf) (previously known as First Release) which present time series. Details can be found on the Office for National Statistics website.
ONS publishes revisions triangles (65.8 Kb Pdf) for all the main published key indicators on the Office for National Statistics website.
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publication: Friday 06 September 2013
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