|Index number||Month on a year earlier||3 months on a year earlier||Month on previous month||3 months on previous 3 months|
The seasonally adjusted index of production fell by 3.8 per cent in January 2012 compared with January 2011. This is the 11th consecutive fall on the month a year ago, the last rise was in February 2011, which was the 12th consecutive increase.
There were decreases in the mining and quarrying, and energy sectors which fell by 21.3 per cent and 9.3 per cent respectively. The manufacturing sector increased by 0.3 per cent and water and waste management sector increased by 0.5 per cent.
The seasonally adjusted index of production fell by 0.4 per cent between December 2011 and January 2012. Mining and quarrying fell on the month by 3.0 per cent and the energy sector fell by 1.2 per cent. Manufacturing and water and waste management sectors increased by 0.1 and 0.2 per cent respectively.
The seasonally adjusted index of manufacturing rose by 0.3 per cent in January 2012 compared with January 2011. Six manufacturing sub sectors rose with six falling and one unchanged. The largest contributions to the month on a year ago rise in manufacturing output were the manufacture of transport equipment industries which rose by 6.7 per cent, contributing 0.7 percentage points to the rise, followed by the manufacture of machinery and equipment industries which rose by 3.8 per cent contributing 0.3 percentage points to the rise. In contrast, the manufacture of rubber and plastic products industries fell by 5.9 per cent.
Between December 2011 and January 2012, seasonally adjusted manufacturing output rose by 0.1 per cent. Six manufacturing sub sectors rose, with seven falling. The manufacture of basic pharmaceutical products and preparations industries rose by 6.0 per cent. This was the largest contribution to the month on month rise in manufacturing output contributing 0.4 percentage points. The next two largest contributors were the manufacture of computer, electronic and optical product industries which rose by 5.1 per cent and manufacture of basic metals industries which rose by 2.6 per cent contributing 0.3 percentage points each to the rise. In contrast, manufacture of food, beverages and tobacco industries fell by 2.5 per cent.
Output of the mining and quarrying industries fell by 21.3 per cent in January 2012 compared with January 2011. This was the 16th consecutive decrease. The biggest decrease was in the extraction of oil and gas which fell by 23.9 per cent. Between December 2011 and January 2012 mining and quarrying fell by 3.0 per cent. Oil and gas extraction was the biggest downwards driver falling by 3.3 per cent on the month.
Between January 2011 and January 2012 energy supply fell by 9.3 per cent. Gas supply decreased by 22.1 per cent and Electricity supply decreased by 5.5 per cent. January 2012 was the warmest since 2008 which contributed to the fall. Between December 2011 and January 2012 energy supply fell by 1.2 per cent. Electricity supply was the main driver falling by 1.1 per cent.
Water and waste management rose by 0.5 per cent on the month a year ago and rose by 0.2 per cent on the month.
In this release of index of production data all four quarters of 2011 have been open for revision. Revisions to these quarters are estimated to have a minimal impact on GDP (less than 0.05 percentage points).
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||Year on year growth (%)||Contribution to production (% points)||Month on 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.
|Sub-sector||% of production||Year on year growth (%)||Contribution to production (% points)||Month on month growth (%)||Contribution to production (% points)|
The 13 manufacturing sub-sectors are:
CA Manufacture of food products, beverages and tobacco; CB Textiles, wearing apparel and leather products; CC Wood and paper products and printing; CD Coke and refined petroleum products; CE Chemicals and chemical products; CF Basic pharmaceutical products and preparations; CG Rubber and plastic products and non-metallic mineral products; CH Basic metals and metal products; CI Computer, electronic and optical products; CJ Electrical equipment; CK Machinery and equipment not elsewhere classified; CL Transport equipment; CM Other manufacturing and repair.
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 and quarrying in January 2012 fell by 21.3 per cent compared with January 2011. In particular:
i) extraction of crude petroleum and natural gas decreased by 23.9 per cent;
ii) other mining and quarrying decreased by 7.5 per cent;
iii) the largest contributor to the 21.3 per cent year on year fall in overall mining and quarrying was approximately 19.9 percentage points from extraction of crude petroleum and natural gas.
The seasonally adjusted index of manufacturing in January 2012 rose by 0.3 per cent compared with January 2011. In detail:
i) output rose in six of the 13 manufacturing sub-sectors and decreased in six sub-sectors and one was unchanged;
ii) the largest increases in output were in the manufacture of transport equipment industries which rose by 6.7 per cent and in the manufacture of machinery and equipment industries which rose by 3.8 per cent;
iii) within the manufacture of transport equipment industries the main risers were in motor vehicles, trailers and semi trailers which increased by 13.0 per cent and the manufacture of building of ships and boats industries which increased by 16.5 per cent;
iv) the manufacture of machinery and equipment industries solely consists of machinery and equipment and rose by 3.8 per cent;
v) the largest contributors to the 0.3 per cent year on year rise in overall manufacturing were approximately 0.7 percentage points from the manufacture of transport equipment industries and approximately 0.3 percentage points from the machinery and equipment industries.
The seasonally adjusted index of the electricity, gas, steam and air conditioning supply industries in January 2012 fell by 9.3 per cent compared with January 2011. The main movements were:
i) gas, distribution of gases fuels through mains, steam and aircon supply decreased by 22.1 per cent;
ii) electric power generation, transmission and distribution decreased by 5.5 per cent;
iii) the largest contributor to the 9.3 per cent year on year fall in overall electricity, gas, steam and air conditioning supply was approximately 5.1 percentage points from gas, distribution of gaseous fuels through mains, steam and air conditioning supply and approximately 4.2 percentage points from the electric power generation, transmission and distribution.
The seasonally adjusted index of the water supply, sewerage and waste management industries in January 2012 rose by 0.5 per cent compared with January 2011. The main movements were:
i) waste collection, treatment and disposal activities which increased by 8.1 per cent;
ii) remediation activities and other waste management services which increased by 4.5 per cent;
iii) the largest contributor to the 0.5 per cent year on year rise was 3.0 percentage points from the waste collection, treatment and disposal activities.
This release conforms to the standard revisions policy for National Accounts. In this release, Periods from January 2011 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 December 2011 to be revised by -0.1.
Revision to IoP quarters arising from this release of data are estimated to have a minimal impact on GDP (less than 0.05 percentage points) in all periods open to revisions.
This release conforms to the standard revisions policy for National Accounts. In this release, periods from January 2011 are open for revision
The Index of Production release for February 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 (66.5 Kb Pdf) is available on the National Statistics 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.
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 National Statistics website.
The 2005 median annual growth of MPI turnover, their associated standard errors and quality bands can now be found on the National Statistics 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 February 2012 and will be published on 05 April 2012, the period open for revision will be from January 2012.
National Accounts revision policy 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 table below presents a summary of the differences between the first estimates published between February 2006 and January 2011 and the estimates published 12 months later.
|Growth rates||Value in latest period||Average||Absolute average|
|Production - 3 month||-1.1||-0.10||0.27|
|Manufacturing - 3 month||0.1||-0.11||0.32|
|Production - 1 month||-0.4||-0.08||0.26|
|Manufacturing - 1 month||0.1||-0.07||0.29|
Spreadsheets giving revisions triangles (3.16 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. No such differences have been found.
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 (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 National Statistics website. Alternatively, for low-cost tailored data, call Online Services on 02075335675 or email firstname.lastname@example.org.
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 (previously known as First Release) which present time series. Details can be found on the National Statistics website.
ONS now publishes revisions triangles for all the main published key indicators on the National Statistics website.
Next publication: Friday 05 April 2012
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|Robert Doody||+44 (0)1633 455803||Index of Productionfirstname.lastname@example.org|