|Index number (2008=100)||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|
The seasonally adjusted index of production fell by 2.3 per cent in February 2012 compared with February 2011.This is the 12th consecutive fall comparing the month with the same month a year ago, the last rise was in February 2011, which was the 12th consecutive increase.
The seasonally adjusted index of production rose by 0.4 per cent between January 2012 and February 2012. Mining & quarrying, gas and electric & water supply and sewerage increased by 3.8 per cent, 6.1 per cent and 1.3 per cent respectively. These rises were partially offset by a fall in manufacturing of 1.0 per cent.
The seasonally adjusted index of manufacturing fell by 1.4 per cent in February 2012 compared with February 2011. Eight manufacturing sub sectors fell with four rising and one unchanged. The largest contributions to the month on same month a year ago fall in manufacturing output were the manufacture of rubber & plastic products industries which fell by 8.9 per cent, contributing 0.6 percentage points to the fall, followed by the manufacture of food, drink & tobacco industries which fell by 2.4 per cent contributing 0.5 percentage points to the fall. In contrast, the manufacture of electrical equipment industries rose by 10.3 per cent.
Between January 2012 and February 2012, seasonally adjusted manufacturing output fell by 1.0 per cent. Nine manufacturing sub sectors fell, with three rising and one flat. The fall was spread across manufacturing with nine sectors contributing between 0.1 and 0.2 percentage points to the fall. The largest contributors to the fall were the manufacture of transport equipment industries and the manufacture of rubber & plastic products industries which fell by 2.0 per cent and 2.7 per cent respectively. The largest rise was the manufacture of electrical equipment industries, which increased by 4.6 per cent.
As 2012 is a leap year, February 2012 contained an additional trading day (Wednesday 29th February). It was expected that an additional trading day would result in a greater non-seasonally adjusted increase in manufacturing output between January 2012 and February 2012 than has been observed. As seasonal adjustment removes the effect of having an additional trading day the resulting estimate shows an overall weakness in manufacturing output when comparing February 2012 with January 2012.
Output of the mining & quarrying industries fell by 9.6 per cent in February 2012 compared with February 2011. This was the 17th consecutive decrease. The biggest contributor to the decrease was from the extraction of oil & gas which fell by 10.7 per cent. Between January 2012 and February 2012, mining & quarrying rose by 3.8 per cent. Oil & gas extraction was the biggest upwards driver rising by 4.6 per cent on the month. This follows three consecutive month on month falls in the oil & gas extraction index.
Between February 2011 and February 2012 energy supply output was flat with 0.0 per cent growth. Electricity supply increased by 2.1 per cent and gas supply decreased by 7.7 per cent. Between January 2012 and February 2012 energy supply rose by 6.1 per cent. Both electricity and gas supply rose by 6.5 and 4.7 per cent respectively. After a relatively mild preceding three months, February 2012 was 2.0 degrees cooler than February 2011 and 1.1 degrees cooler than January 2012.
Water & waste management rose by 0.2 per cent on the month on same month a year ago and rose by 1.3 per cent on the month.
This month, the period open for revision is January 2012 only. Month on month, the Index of Production has been revised down by 0.2 per cent from -0.4 per cent to -0.6 per cent. Mining & quarrying, gas & electric and water supply & sewerage have been revised up by 0.2 per cent, 0.4 per cent and 0.1 per cent respectively. However, this has been more than offset by a downward revision to manufacturing of 0.4 per cent.
Manufacturing was revised from a rise of 0.1 per cent to a fall of 0.3 per cent. These revisions were a result of late data for the monthly business survey replacing imputations and seasonal factors being re-estimated.
The Index of Production (IoP) measures the output of the production industries in the United Kingdom. Figures are adjusted for seasonal variations unless otherwise stated and the reference year is 2008 = 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 (%)||Contribution to production (% points)||Month on previous month growth (%)||Contribution to production (% points)|
Headline figures for the Index of Production are:
Total Index of Production; Sector B Mining and quarrying; and within this Division 06 Oil and gas extraction; Sector C Manufacturing; Sector D Electricity, gas, steam and air conditioning; and Sector E Water supply, sewerage and waste management.
Individual contributions may not sum to the total due to rounding.
|Sub-sector||Summary Description||% of production||Month on same month a year ago growth (%)||Contribution to production (% points)||Month on previous month growth (%)||Contribution to production (% points)|
|CA||Food, beverages and tobacco||11.2||-2.4||-0.31||-0.7||-0.09|
|CB||Textiles and leather products||2.1||-3.2||-0.07||-4.9||-0.11|
|CC||Wood, paper and printing||5.9||0.0||0.00||0.1||0.01|
|CD||Coke and petroleum||0.4||4.2||0.02||7.9||0.04|
|CG||Rubber and plastic products||5.0||-8.9||-0.42||-2.7||-0.12|
|CI||Computer, electronic & optical||4.9||-6.0||-0.29||-2.3||-0.11|
|CK||Machinery and equipment||4.4||0.7||0.03||-2.0||-0.10|
|CM||Other manufacturing & repair||4.9||-0.6||-0.03||-1.7||-0.09|
Manufacturing consists of 13 sub-sectors listed above with the percentage of the total they account for. The larger the percentage contribution, the more likely the impact on the overall manufacturing growth rate will be significant.
The seasonally adjusted index of mining & quarrying in February 2012 fell by 9.6 per cent compared with February 2011. In particular:
extraction of crude petroleum & natural gases decreased by 10.7 per cent,
other mining & quarrying decreased by 2.8 per cent,
the largest contributor to the 9.6 per cent month on same month a year ago fall in overall mining & quarrying was approximately 8.8 percentage points from extraction of crude petroleum & natural gas.
The seasonally adjusted index of manufacturing in February 2012 fell by 1.4 per cent compared with February 2011. In detail:
output decreased in eight of the 13 manufacturing sub-sectors and rose in four with one remaining flat,
the largest decreases in output were in the manufacture of rubber & plastic products which fell by 8.9 per cent and in the manufacture of food drink & tobacco products which fell by 2.4 per cent,
within the manufacture of rubber and plastic products the main fall was in cement, lime, plaster and articles of concrete which decreased by 22.8 per cent,
within the manufacture of food drink & tobacco products the main falls were alcoholic beverages which fell by 6.2 per cent and bakery and farinaceous products which fell by 3.1 per cent,
the largest contributors to the 1.4 per cent month on same month a year ago fall in overall manufacturing were approximately 0.6 percentage points from the manufacture rubber & plastic products and approximately 0.5 percentage points from the food drink & tobacco products.
The seasonally adjusted index of the electricity, gas, steam & air conditioning supply industries in February 2012 was flat with 0.0 per cent growth compared with February 2011. The main movements were:
electric power generation, transmission & distribution which increased by 2.1 per cent,
manufacture of gas, distribution which decreased by 7.7 per cent,
the largest contributor to the 0.0 per cent month on same month a year ago growth in overall electricity, gas, steam & air conditioning supply was approximately 1.7 percentage points from electric power generation, transmission & distribution (increase) and approximately 1.6 percentage points from the manufacture of gas, distribution (decrease). The difference is due to rounding.
The seasonally adjusted index of the water supply, sewerage & waste management industries in February 2012 rose by 0.2 per cent compared with February 2011. The main movements were:
waste collection, treatment & disposal activities which increased by 7.1 per cent,
remediation activities & other waste management services which increased by 3.1 per cent,
the largest contributor to the 0.2 per cent month on same month a year ago rise was 2.6 percentage points from the waste collection, treatment & disposal activities.
This release conforms to the standard revisions policy for National Accounts. In this release, periods from January 2012 are open for revision.
Since last month, a number of late responses have been received to the Monthly Business Survey. The combined impact of these late data and seasonal adjustment factors being re-estimated is the month on month growth rate for the Index of Production for January 2012 to be revised by -0.2.
There are no revisions to GDP arising from this release of IoP data.
The monthly United Kingdom (UK) Index of Production (IoP) provides a timely indicator of growth in the output of production industries at constant prices. The IoP is a key economic indicator and one of the earliest short-term measures of economic activity and shares exactly the same industry coverage as the corresponding quarterly series within UK Gross Domestic Product (GDP).
The main output is a seasonally adjusted estimate of total production and broad sector groupings of mining & quarrying, manufacturing, energy and water supply & sewerage. In general, seasonally adjusted output estimates are available down to the National Accounts Supply Use Table (SUT) level.
Output estimates are calculated by taking value estimates and adjusting them to remove the impact of price changes, or by using direct volume estimates. 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.
Summary statistic tables (52.5 Kb Excel sheet) showing current growth rates compared with historical information for the IoP and the Index of Manufacturing (IoM) are available as part of this release.
This release conforms to the standard revisions policy for National Accounts. In this release, periods from January 2012 are open for revision.
ONS is currently holding a consultation to seek users’ views on the proposal to remove monthly estimates of total new orders and export new orders from the Turnover and Orders in Production and Services Industries publication, and to stop collecting source data by removing the relevant questions from the Monthly Business Survey questionnaire. You can find more about this consultation, including how to respond, by viewing open consultations on the ONS website. This consultation will end on 8 June 2012.
The Index of Production release for March 2012 will have a revisions period back to January 2012.
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 2012.
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 2008=100 and are classified to the 2007 Standard Industrial Classification (SIC). The production industries, which accounted for 15.4 per cent of gross domestic product in 2008, cover mining and quarrying (Sector B), manufacturing (Sector C), gas and electric (Sector D), and water supply and 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.
An article about the Index of Production methodology (78.4 Kb Pdf) is available on the ONS website.
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 indicators 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.
Summary quality report
A summary quality report (130.1 Kb Pdf) for this Statistical Bulletin can now be found on the ONS website.
The 2005 median annual growth of MPI turnover, their associated standard errors and quality bands can now be found on the ONS website.
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.
In the next bulletin, which will contain figures for March 2012 and will be published on 10 May 2012, the period open for revision will be from January 2012.
National Accounts revision policy (27.8 Kb Pdf) can be found on the ONS 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 table below presents a summary of the differences between the first estimates published between March 2006 and February 2011 and the estimates published 12 months later.
|Growth rates||Value in latest period||Average revision||Absolute average revision|
|Production - 3 month||-0.5||-0.11||0.28|
|Manufacturing - 3 month||0.2||-0.13||0.33|
|Production - 1 month||0.4||-0.09||0.26|
|Manufacturing - 1 month||-1.0||-0.07||0.29|
Spreadsheets giving revisions triangles (3.21 Mb ZIP) of estimates for all months from February 1998 through to the current month, and the calculations behind the averages in the above table, are available on the National Statistics website.
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 Media Relations Office. Also available is a list of those given pre-publication access (39.7 Kb Pdf) 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 ONS website. Alternatively, for low-cost tailored data, call Online Services on 0845 601 3034 or email email@example.com.
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 ONS website.
ONS now publishes revisions triangles (65.8 Kb Pdf) for all the main published key indicators on the ONS website.
Next publication: Thursday 10 May 2012
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