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The Monthly Business Turnover Index is based on data from the ONS Monthly Business Survey and Retail Sales Inquiry. These are the largest data sources used for quarterly GDP statistics. For included industries, the surveys include all large businesses and a representative sample of smaller companies operating in Scotland. There is a sample of around 2,500 companies for the final results each month, including more than 400 manufacturing firms. The sample sizes fall to around 1,800-1,900 in the provisional estimate each month.
The Monthly Business Survey does not include turnover data for Agriculture, Energy, Construction, Financial Services or Government. There is some data for industries such as real estate, mining, and private sector health and education, but sample sizes are small and the results are not included in the index.
Results are adjusted for inflation using the Consumer Price Index as a broad indicator of price change, and seasonally adjusted. Turnover is taken to be increasing (decreasing) in real terms when it is higher(lower) than the 12 months or one month previously by at least 0.5 percentage points above (below) the CPI inflation rate. Turnover is taken to be unchanged when it does not meet either of these conditions.
The index is similar to the IHSMarkit PMI indicators. It reports the net balance of firms reporting increasing or decreasing turnover, in real terms, compared to last month and to 12 months ago. An index value of 50 is in balance and indicates that turnover is broadly unchanged compared to last month or 12 months ago. Values below 50 indicate that more companies are showing decreased turnover than increased turnover, broadly indicating falling sales, whereas values above 50 indicate increasing sales.
The MBTI is a diffusion index calculated using the standard formula for such measures. Every company is given equal weight, meaning that a large firm which reports a large increase in turnover could be offset by a small firm reporting a small fall in turnover. For this reason, the index does not give a direct indication of the likely growth rate for total turnover or GDP in each month or quarter. Instead, it is designed to give a broad indication of general trading conditions, including the extend to which falling turnover is widespread within an industry. The main uses for the index are to identify sharp turning points in output and the relative size of economic shocks between different industries.
The statistics are designated as experimental official statistics. This means that they have been released at an early stage of development to enable use at an early stage. Users should be aware that the results could be revised if methods are improved or changed over time.
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Background information and methodology for the Monthly Business Turnover Index statistics.