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Industrial Production Index
Industrial Production Index
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Analytical Framework, Concepts, Definitions, and Classifications
Monthly Industrial Production Index is calculated to measure the evolution of economy and the positive and negative effects of economical political decisions in short term.
Scope of the Data
Whole country (Turkey) is covered.
Manufacturing industry (B), Mining and Quarrying Sector (C) and Electricity, Gas, Steam and Air Conditioning Supply (D) classified in NACE Rev.2 are covered.
35.12, 35.13, 35.14, 35.2, 35.3 and 09 sectors of NACE Rev.2 are not covered.
Production value, production quantity and number of days worked
In the index calculation the production quantity is used in sectors; 05- Mining of coal and lignite, 06- Extraction of crude petroleum and natural gas, 12- Manufacture of tobacco products and 35.11- Production of electricity. Total number of days worked obtained from the data of Social Security Institution is used in sectors; 30.11-Building of ships and floating structures, 3012- Building of pleasure and sporting boats and 30.20- Manufacture of railway locomotives and rolling stock. In the index calculation deflated production value is used for other sectors.
Domestic and non-domestic producer prices
Type of index:
Chained Laspeyres Index method (weighted) is used.
Nature of weights:
Up to the level of the section according to NACE Rev. 2 classification (2 digit level) weights obtained from the Annual Industrial and Service Statistics are used. For the upper level indices National Accounts value added is used as a weight. For each level t-2 periods weights are used.
Treatment of missing data:
In non response situation, the annual rate of change of the enterprises are used for imputation.
Characteristics of Basic Data Sources
Data used for calculation of the index are consist of Monthly Industry Production Questionnaire data and turnover data calculated from Revenue Administration data base. The published data is temporary and data for the last two months is revised every month. When the February press release is published, data for the last two years will be revised.
Feature of variables:
Quantity of production:
It is the quantity of production which is produced either in the enterprise or produced in another enterprise by giving raw material of the enterprise in the consistent month. The subcontracting by using other enterprises raw materials is not included.
Value of Production:
It is the value of production which is produced either in the enterprise or produced in another enterprise by giving raw material of the enterprise in the consistent month. While sales unit price is used for production value calculation for enterprises which questionnaire is applied, the turnover data calculated from the Revenue Administration data is used for the production value of firms that are not covered by the survey.
Quantity of Sales:
The quantity of sales includes the products which are produced by another enterprise or produced by another enterprise with the raw materials of the enterprise which is included in survey and sales from the stocks of the enterprise and the products given to other departments of the enterprise in the consistent month. The commercial goods sold without any changes on them are not included.
Value of Sales:
The value of sales includes the value of the products (by using unit price) which are produced either in the enterprise or by another enterprise with the raw materials of the enterprise which is included in survey and sales from the stocks of the enterprise and the products given to other departments of the enterprise in the consistent month.
Producer's price received by a producer for a unit of a good including any tax payable or subsidy receivable on the product as a consequence of its sale or use except invoiced VAT, Special Consumption Tax. It also excludes any delivery charges invoiced separately by the producer.
Turnover (VAT excluded):
Turnover comprises the total value of goods and services invoiced by enterprise in reference month and this corresponds to market sales of goods and services supplied to third parties. Turnover includes invoiced by unit vis-a-vis its customer (exception of VAT and deductible taxes linked to turnover) other all taxes and duties. Turnover also includes all other charges (transport, packaging, etc.) passed on to the customer, even if these charges are listed separately in the invoice.
Turnover does not include price decline, discount and allowance, recycling package. The income which is classified in the company’s account as other business income, financial income and extraordinary income are excluded in turnover. Business subventions obtained from the government are also excluded.
Data collection methods:
Monthly Industrial Production Survey data are provided by enterprises
via Web-based data entry program. The turnover information calculated from the Revenue Administration's data is used for the firms that are not covered by the survey.
Procedures for nonresponse:
Non-responding units are followed up on telephone or by interviewers. When a unit refuses to respond, the unit is reminded of its legal obligation to respond and legal procedure begins.
The Revision Information Form regarding the revisions to be carried out in the current year for the statistics produced in the scope of this press release can be accessed from the link below.
For the Unadjusted Series;
1) When publishing the current month indices last two month indices will be revised.
2) In the January press releases, last two years indices will be revised.
For the Seasonal and Calendar Adjusted Series;
1) Revisions are implemented on the data of the last three years excluding the current year
2) At the end of the year the model structure of the series, model parameters and the outliers observation structure will be changed if the method requires change.
INDUSTRIAL PRODUCTION INDEX
Seasonal and calendar related effects prevent observing the general tendency of data because of their temporary characteristics. Therefore, identification of seasonal patterns of short term indicators plays crucial role in order to make reliable comparisons between consecutive periods.
The seasonal adjustment of Industrial Production Indices is carried out using TRAMO-SEATS methodology. The software that is used for the application of this method is 2.2.0 version of JDemetra+ developed by the National Bank of Belgium (NBB) in cooperation with the Deutsche Bundesbank and Eurostat in accordance with the Guidelines of the European Statistical System.
Seasonal Adjustment Process
Seasonal and calendar adjustment process of Industrial Production Indices begins at the end of each year with the identification of the models of next year. This specified model structure is kept fixed throughout the year to adjust seasonally and/or calendar effects. At the end of the year, just like the previous year, specification of econometric estimation models for the following year is done. The identified process repeats itself in a cyclical manner each year.
A substantial number of the subtitles of Industrial Production Index contain seasonal and calendar effects.
Direct or Indirect Approach
NACE Rev.2 four digit series are seasonally and calendar adjusted by direct approach and then aggregated to derive seasonally and calendar adjusted three digit, two digit figures, MIGS and IPI. The advantages of indirect approach are calculation of contributions to growth from components of main aggregates and retaining additivity.
Seasonal adjustment procedure is subject to revisions over time because of the re-estimation of seasonal component as new observations are added. These revisions are implemented on the data of the last three years excluding the current year. However because of the major revisions carried out in unadjusted data at beginning of 2018 due to changes in base year and reference year, changes in classifications, definitions and coverage, changes in methodology, implementation and questionnaire structure and changes in data source seasonally and calendar adjusted data have been revised for the period 2010-2017. As a special case for 2018, since Industrial Production Index series are published with base year 2015, current year and two years before that are subject to revision.
Adjusted data has been published in 3 different ways.
1-“Calendar adjusted” data is derived from unadjusted data by removing calendar and holiday originated effects. Calendar adjusted data should be used in comparisons regarding the same month/period of the previous year.
2-“Seasonally adjusted” data is derived from unadjusted data by removing effects originating from seasonal effects. Seasonally adjusted data should be used in comparisons regarding the previous month/period.
3- If unadjusted data contains both calendar and holiday, and seasonal effects, “seasonally and calendar adjusted” data is derived by removing these effects. Seasonally and calendar adjusted data should be used in comparisons regarding the previous month/period
Reference period and frequency:
The details of data which are disseminated in press release are given below:
1- Monthly Industrial Production Index (2010=100),
2- Calendar adjusted Monthly Industrial Production Index (2010=100),
3- Seasonally and calendar adjusted Monthly Industrial Production Index (2010=100),
4- Calendar Adjusted Percentage Change over the Same Month of the Previous Year,
5- Seasonal and Calendar Adjusted Percentage Change over the Previous Month.
6-Influence of divisions on upper index change (2015=100)
Contribution of indices to annual change of upper index is calculated with the formulation:
Contribution of indices to monthly change of upper index is calculated with the formulation:
For other months;
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