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Scottish Index of Manufactured Exports, 2010 Q4

BACKGROUND NOTES

Methodology

1. Estimates of Scottish manufactured exports are compiled on the standard industrial classification UKSIC(2003). Implemented on 1 January 2003, UKSIC(2003) was a minor revision to UKSIC(92), in line with the revision of the European Union classification system.

2. The estimates are derived from data on sales of goods produced by the Scottish manufacturing industry for export outwith the UK. The Office for National Statistics (ONS) collect the data used to produce these figures in their Monthly Business Survey (MBS). Export estimates for the refined petroleum products industry are calculated using a volume series supplied by the Department of Energy and Climate Change (DECC) and export ratios estimated using the Scottish Government's Global Connections Survey.

3. The main purpose of the Index is to identify volume changes over time. Accordingly, data are deflated using UK export producer price indices, which are produced by the ONS. These constant price estimates provide a more appropriate measure for monitoring change over time as they have had the effect of price changes removed.

4. Deflated exports sales of the companies covered by the MBS are weighted to represent the entire population of each industry using the Inter Departmental Business Register.

5. Further cross-referencing of company information from the Global Connections Survey (GCS) is being carried out to enhance the level of consistency between individual company records held in both sources.

6. The data have been seasonally adjusted where appropriate using the X-12-ARIMA technique. Further information is available in an article published in the 2006 edition of Scottish Economic Statistics. ( http://www.scotland.gov.uk/stats/ses/).

7. Equivalent figures, on a cash basis, for Table 1 are available on the experimental SNAP website. These are presented in constant and current prices, and both seasonally adjusted and non- seasonally adjusted. These are available using the following link:

http://www.scotland.gov.uk/Topics/Statistics/Browse/Economy/SNAP

8. In the base year (2007), the index was based on a sample of 935 Scottish manufacturing companies. In this quarter, the sample size was 811. Whilst this decrease in sample has been factored into the weighting, the confidence intervals are likely to have widened slightly. The sample covers all sizes of unit across the manufacturing sector.

Volatility

9. Some of the indices for smaller industries can be particularly volatile when examined on a quarterly basis. In some cases, this is due to the nature of the industry (e.g. transport equipment); in others it can be due to the relatively small size of the industry in export terms (e.g. food & tobacco). For these reasons, care should be taken when drawing any firm conclusions from individual quarter results. Estimates of annual changes will be more robust than quarterly changes.

The Global Connections Survey

10. The annual Global Connections Survey (GCS) provides a current price estimate, in monetary terms, of the value of exports sales for the economy as a whole; the only survey to do so. The Quarterly Index of Manufactured Exports provides a time series of growth in export sales, in constant prices, for the manufacturing industry. The annual estimate of total exports from Scotland derived from the Global Connections Survey indicates that the manufacturing sector accounted for £13.2 billion in 2009 - 63 per cent of all exports from Scotland.

11. Further information about the methodology of the Index of Manufactured Exports and the Global Connections Survey can be found on the website at: www.scotland.gov.uk/exports

Revisions

12. It is the Scottish Government's policy to use all the data available at the time of publication to ensure that the best possible estimates are provided. This inevitably leads to revisions to previously published estimates. All quarters affected by data revisions are updated at the earliest possible opportunity. This allows those using the data for long-term analysis to have a long-term consistent series. We have a commitment to improve continually the quality of the index of manufactured exports, and part of this commitment involves an ongoing programme to develop the data sources and methodologies used in the compilation of the series.

13. An information paper discussing the reliability and accuracy of the Index of Manufactured Exports, and providing analysis of revisions in recent years, has been published on the Scottish Government website at the following location: http://www.scotland.gov.uk/Topics/Statistics/Browse/Economy/papers/IMERevisions2011

IME 2010Q4

14. The chart above shows a comparison of the overall Index this quarter and the index published in January 2011. Tables 3 and 4 provide detailed information of revisions to the index at industry level.

15. In this publication, the most significant revisions are to the Drink, Chemicals, and Electrical & Instrument Engineering sectors due to updates to source data for recent quarters. Revisions to several long term series are due to a review and update of seasonal adjustment modelling for all sectors.

Future Revisions

16. There are no major planned methodology changes before the next release in July 2011. Alignment with the Global Connections Survey 2009 is being reviewed.

17. The Index of Manufactured Exports will begin to be estimated using SIC 2007 in line with other Scottish Government economic statistics.

National Statistics

18. National Statistics are produced to high professional standards set out in the National Statistics Code of Practice. They undergo regular quality assurance reviews to ensure that they meet customer needs. They are produced free from any political interference.

19. Results are available to download from the Scottish Government website at:

www.scotland.gov.uk/exports

Issued by:

Office of the Chief Economic Adviser

Scottish Government

St Andrew's House

Regent Road

Edinburgh EH1 3DG

Telephone:

Communications Office: 0131-244-4044

Assistant Statistician: John Dowens 0131-244-3269