introduction · web viewin table 6 it can been seen that the highest cost per paid work hour for an...

CONTENTS1. General.............................................................................................9

1.1 Publication of the Indices.....................................................102. Main Findings..........................................................................10

2.1 Production and Revenue......................................................102.2 Employment and Wages......................................................112.3 Export-Intensive Establishments..........................................112.4 Technological Intensity.........................................................12

3. Terms, Definitions and Explanations.........203.1 Definitions............................................................................203.2 Explanations of the Data Used for the Estimates.................22

4. Methodology.............................................................................234.1 Survey Population................................................................234.2 Sampling Frame...................................................................234.3 Sample23

4.3.1 General.................................................................................23

4.3.2 Basic Sample........................................................................24

4.3.3 Supplementary Samples – New Businesses.........................24

4.3.4 Estimation.............................................................................25

5. Methods of Calculation................................................255.1 Base 255.2 Indices of Revenue, Employment and Labour Cost.............265.3 Indicators, Weights, and Method of Calculating the Manufacturing Production Index26

5.3.1 Manufacturing Production Index...........................................26

5.3.2 Indicators..............................................................................27

5.3.3 Manufacturing Production Weights.......................................27

5.3.4 Formula for Calculating the Production Index for Group.......30

5.3.5 Formulas for Calculation of the Production Index for a Division and for Total Manufacturing.............................................................................................30

1. GeneralThe Central Bureau of Statistics (CBS) collects monthly data from a sample of approximately 2,700 Manufacturing, Mining and Quarrying establishments in which there is at least one employee job. These data are used to prepare the current Manufacturing indices, which are an indicator of the development in Manufacturing and in the economy in general.

This publication presents Manufacturing indices for 2016 as an annual average of the indices that are calculated monthly. The indices were calculated on the basis of data collected from the new sample of 2012, according to the base 2011=100.0. These data are based on the Standard Industrial Classification of All Economic Activities 2011.

According to the new classification, the Manufacturing Indices Survey, which includes Mining and Quarrying, deals with two sections:

Section B: Mining and Quarrying (Divisions 06–09);

Section C: Manufacturing (Divisions 10–33), excluding Working of Diamonds.

In the past these sections constituted one category.

The Manufacturing indices include the following:

(1) Manufacturing production indices;

(2) Employment indices (jobs, employee jobs, work hours);

(3) Revenue indices (from local sales and exports);

(4) Labour cost indices (wages, supplementary expenditures);

(5) Derived indices (cost and wage per paid work hour, wage per employee job, revenue per job, etc.).

Because the methods of calculating Manufacturing production indices differ from those used to calculate all other indices, they are listed in separate sections.

Tables 1–9 present data on jobs in Manufacturing, as well as data on labour cost and revenue according to industry, sector, and size of the establishment.

Tables 10–11 present data on export-intensive establishments – Manufacturing establishments whose exports constitute over 50% of the value of their sales, and establishments whose exports amount to over NIS 10 million a year and comprise over 25% of their sales.

Table 12 presents indices of Manufacturing revenue at constant prices, and thus enables calculation of the real change in Manufacturing revenue.

Table 13 presents indices of Manufacturing production, employee jobs, and actual work hours, according to aggregated classes.

Tables 14–18 present data on employment and revenue, by technological intensity.

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1.1 Publication of the IndicesThe 2016 indices are calculated newly according to the new sample, and the indices for previous years were transferred to 2011 base according to a transition matrix.

The monthly indices as of 2004 are published according to the base 2011=100.0 in the monthly bulletin and the CBS web database. Additionally, a media release on the subject is posted monthly on the CBS website.

A preliminary estimate of the indices is calculated and published approximately one month and 20 days after the surveyed month, based on data from approximately 65% of all establishments in the sample and including most of the large establishments. A second estimate, based on data from approximately 80% of the sample establishments, is published two months and 20 days after the surveyed month. One month later, when additional data are obtained, adjusted indices are published; and one month after that (four months and 20 days after the surveyed month), a final index is published based on data from approximately 95% of all establishments in the sample.

2. Main Findings

2.1 Production and RevenueTable 4 presents the revenue of Manufacturing, Mining and Quarrying. In 2016, the revenue amounted to NIS 394 billion. Local sales constituted 60% of the Manufacturing, Mining and Quarrying revenue, and export sales – 40%.

The Manufacturing production index, which aims to reflect the changes in the value added of Manufacturing, is calculated by weighting the indices of the indicators for which the changes are similar to the changes in value added, such as output of products, work hours invested in production, and revenue at constant prices.

The index of monthly revenue at constant prices is calculated as follows: The index of monthly revenue at current prices is divided by a combined index made up of indices of wholesale prices of Manufacturing output for the domestic market and export price indices.

Table 6 shows the revenue, cost of labour and wages by sector and size groups. In 2016, the percentage of exports in the revenue of establishments under foreign ownership was 60% and the percentage of exports in the revenue of government corporations was 54%. The percentage of exports in the revenue of establishments with more than 300 jobs was 57%.

Table 9 presents establishments divided into groups by size of revenue. Most establishments of Manufacturing, Mining and Quarrying were in the group of NIS 5 million revenue, about 70% of the establishments. Establishments in which sales were NIS 100 million and over in 2016 constituted about 4% of the establishments.

Table 13 shows that in 2016, the index of Manufacturing production in Manufacturing, Mining and Quarrying establishments with at least one employee job (excluding

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Working of Diamonds) was 110.0, compared with 108.2 in 2015, an increase of 1.7%.

2.2 Employment and WagesTable 1 presents the number jobs by industry division. In 2016, the number of jobs in Manufacturing, Mining and Quarrying was estimated at an average of 368,600 per month, compared to 367,700 jobs in 2015. Of the workers, 13,600 were hired through employment agencies in 2016.

Table 2 presents the actual work hours. In 2016, there were 715,217 actual work hours in Manufacturing, Mining and Quarrying, compared with 712,350 actual hours in 2015.

Table 3 shows that the cost per work hour in Manufacturing, Mining and Quarrying amounted to NIS 86 in 2016, compared with NIS 84 in 2015. The average annual wages per employee job in Manufacturing, Mining and Quarrying was NIS 160,000 in 2016. The highest wages per employee job was recorded in Mining and Quarrying (NIS 258,000), Manufacture of Computers and Electronic and Optical Products (NIS 248,000), and Manufacture of Other Transport Equipment (NIS 228,000). The lowest average annual wage per employee job was recorded in Manufacture and Processing of Leather and Related Products, Manufacture of Wearing Apparel (NIS 89,000).

Table 5 presents the number of establishments and jobs by sector and size groups. In 2016, 68.1% of the jobs in Manufacturing, Mining and Quarrying were in the private sector under Israeli ownership, 5.9% were in co-operatives, another 7.2% were in government corporations, 15.5% were in the private sector under foreign ownership, and 3.3% were in the households sector.

In Table 6 it can been seen that the highest cost per paid work hour for an employee job was in establishments with 300 jobs or more – NIS 115 per paid work hour, and the lowest cost was in establishments with 1–4 jobs – NIS 46. The share of supplementary expenditures for wages in 2016 was 21.2%. Government corporations paid the highest annual wage per employee job – NIS 283,000, compared to NIS 134,000 in co-operatives, NIS 143,000 in private establishments under Israeli ownership and NIS 62,000 in the Households Sector.

2.3 Export-Intensive EstablishmentsExport-intensive establishments are those in which the value of export is more than 50% of the sales, and those whose exports amount to over NIS 10 million a year and comprise over 25% of their sales.

Table 10 shows the division by industry.1 The largest number of establishments was in Manufacture of Computers and Electronic and Optical Products – 188 establishments. The number of jobs in this industry was 55,100.

1 Central Bureau of Statistics (2012).Standard Industrial Classification of All Economic Industries 2011. Technical Publication No. 80. Jerusalem: Author.

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Table 11 presents data on these establishments. In 2016, the number of Manufacturing, Mining and Quarrying establishments that were export-intensive was estimated at 817, and the average number of jobs in them was 142,700. Most of the establishments were active in the private sector under Israeli ownership – 594 establishments, with 66,300 jobs.

2.4 Technological IntensityThe division by technological intensity refers to Manufacturing alone (Section C). In accordance with the classification recommended by the OECD and Eurostat, the Manufacturing industries were divided into four groups, by technological intensity. This classification is done according to the main activity of each establishment and its industrial affiliation, in accordance with the Standard Industrial Classification of All Economic Activities 2011.

The classification by technological intensity differs from the 1993 classification and was adjusted to the 2011 classification. The main difference is that Mining and Quarrying, and Publishing Activities are not included in Manufacturing, and the changes introduced in the division of Manufacturing industries to different levels of intensity.

The four groups of technological intensity are: high technology, medium-high technology, medium-low technology and low technology.

Table A displays in detail the industries included in each technological intensity group.

In Table 15, high-technology industries are characterized by their substantial contribution to Manufacturing exports. In 2016, 57% of the Manufacturing exports derived from establishments classified as high-technology industries.

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Table A1. Industries, High technology2

Code Description

21 Manufacture of pharmaceutical products, including homeopathic preparations

26 Manufacture of computers, and electronic and optical products

303 Manufacture of air and spacecraft, and related machinery

Table A2. Industries, Medium-high technology3

Code Description

20 Manufacture of chemicals and chemical products

252 Manufacture of weapons and ammunition

27 Manufacture of electrical equipment

28 Manufacture of machinery and equipment n.e.c.

29 Manufacture of motor vehicles, trailers and semi-trailers

30 Manufacture of other transport equipment, Excluding: 301: Building of ships and boats; 303: Manufacture of air and spacecraft and related machinery

325 Manufacture of medical, dental and orthopedic instruments and supplies



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Table A3. Industries, Medium-low technology4

Code Description

182 Reproduction of recorded media

19 Manufacture of coke and refined petroleum products

22 Manufacture of rubber and plastic products

23 Manufacture of other non-metallic mineral products

24 Manufacture of basic metals

25 Manufacture of fabricated metal products, except machinery and equipment, Excluding: 252: Manufacture of weapons and ammunition

301 Building of ships and boats

33 Repair and installation of machinery and equipment

Table A4. Industries, Low technology5

Description Code

10 Manufacture of food products

11 Manufacture of beverages

12 Manufacture of tobacco products

13 Manufacture of textiles

14 Manufacture of wearing apparel

15 Manufacture and processing of leather and related products

16 Manufacture of wood and of products of wood and cork, except furniture; manufacture of articles of straw and plaiting materials

17 Manufacture of paper and paper products

18 Printing and reproduction of recorded media, Excluding: 182: Reproduction of recorded media

31 Manufacture of furniture

32 Other manufacturing, Excluding: 325: Manufacture of medical, dental and orthopedic instruments and supplies

4 CBS (2012). Standard Industrial Classification of All Economic Industries 2011. Technical Publication No. 80. Jerusalem: Author.

5 CBS (2012). Standard Industrial Classification of All Economic Industries 2011. Technical Publication No. 80. Jerusalem: Author.

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Table 18 presents the division of establishments, jobs, revenue and labour cost by technological intensity. In 2016, exports in Manufacturing totalled NIS 154.514 billion. High-technology exports were the highest – NIS 88.191 billion, whereas low-technology exports were the lowest – NIS 9.537 billion.

1. EXPORTS OF MANUFACTURING ESTABLISHMENTS, BY TECHNOLOGICAL INTENSITY (at constant prices)

Base: 2011=100.02006–2016

70

80

90

100

110

120

130

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016

Indi

ces

Manufacturing - total

High technology

Medium-high technology

Medium-low technology

Low technology

Table 4 shows that the revenue from local sales in Manufacturing in 2016 amounted to NIS 224 billion. In 2016, there was a 6.6% decrease in revenue from exports at constant prices, a 2.1% increase in revenue from local sales, and a 1.2% decrease in total revenue (Diagram 2).

2. INDICES FOR OVERALL MANUFACTURING:REVENUE, EXPORTS, AND LOCAL SALES (at constant prices)

Base: 2011=100.02006–2016

70

80

90

100

110

120

130

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016

Indi

ces Revenue

Exports (NIS)Local sales

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The Manufacturing production index decreased by 0.4% in 2016. The decrease in Manufacturing production was mostly due to the high-technology industries, whereas the other technologies recorded an increase (Table B).

Table B. Technological Intensity – Manufacturing Production Index (Base: 2011 = 100.0)

Technological Intensity 2011 2012 2013 2014 2015 2016

Manufacturing – total 100.0 104.7 103.6 104.2 106.8 106.4

High technology 100.0 109.3 107.2 107.1 110.7 104.3

Medium-high technology 100.0 104.1 103.7 103.7 105.2 107.5

Medium-low technology 100.0 101.8 101.9 104.6 106.0 110.1

Low technology 100.0 99.0 98.4 98.7 100.9 106.8

3. MANUFACTURING PRODUCTION INDEX, BY TECHNOLOGICAL INTENSITY (at constant prices)

Base: 2011=100.02006–2016

70

80

90

100

110

120

130

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016

Indi

ces


High technology



Low technology

Table 18 shows that in 2016 there were 96,000 jobs in the high-technology industries, compared with 364,400 jobs in all of Manufacturing – about 26%.

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4. EMPLOYEE JOBS IN MANUFACTURING, BY TECHNOLOGICAL INTENSITY (at constant prices)

Base: 2011=100.02006–2016

70

80

90

100

110

120

130

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016

Indi

ces


High technology



Low technology

Tables C1–C5 show than in 2016 there was an increase in employee jobs in Manufacturing industries, in medium-high and low technology. Additionally, there was a decrease in high-technology and medium-low technology industries.

Table C1. Entire Manufacturing – Manufacturing Production Indices, Employee Jobs, and Wage per Employee Job, 2006–2016

Year Manufacturing production index

Employee jobs Wage index per employee job (at constant prices)

2006 85.3 95.1 100.82007 90.0 99.1 104.62008 96.2 101.2 100.32009 90.6 96.4 98.72010 97.8 98.3 100.02011 100.0 100.0 100.02012 104.7 100.7 100.52013 103.6 101.0 101.62014 104.2 101.1 103.22015 106.8 100.9 106.62016 106.4 101.1 109.9

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Table C2. High Technology – Manufacturing Production Indices, Employee Jobs, and Wage per Employee Job, 2006–2016



2006 76.5 90.6 107.12007 81.2 96.1 110.22008 92.8 99.8 101.72009 92.0 95.1 100.62010 100.1 97.0 101.52011 100.0 100.0 100.02012 109.3 100.2 99.92013 107.2 99.6 101.32014 107.1 98.3 103.92015 110.7 97.6 107.42016 104.3 96.5 110.8

Table C3. Medium-High Technology – Manufacturing Production Indices, Employee Jobs, and Wage per Employee Job, 2006–2016



2006 85.9 91.9 97.52007 96.1 97.4 101.72008 101.0 99.8 99.22009 91.6 96.8 97.72010 96.7 99.3 98.72011 100.0 100.0 100.02012 104.1 101.9 102.22013 103.7 103.5 102.22014 103.7 103.4 103.72015 105.2 101.5 105.42016 107.5 102.0 108.6

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Table C4. Medium-Low Technology – Manufacturing Production Indices, Employee Jobs, and Wage per Employee Job, 2006–2016



2006 88.9 93.6 100.32007 93.1 99.0 103.72008 95.8 102.2 100.72009 81.8 94.6 97.52010 92.5 96.3 99.92011 100.0 100.0 100.02012 101.8 101.3 100.82013 101.9 102.3 102.32014 104.6 103.1 104.52015 106.0 104.3 107.22016 110.1 103.4 112.0

Table C5. Low Technology – Manufacturing Production Indices, Employee Jobs, and Wage per Employee Job, 2006–2016



2006 99.9 102.4 98.82007 102.1 103.4 101.42008 101.3 103.0 100.22009 96.1 98.7 98.32010 98.9 100.3 99.52011 100.0 100.0 100.02012 99.0 100.2 100.32013 98.4 99.9 101.52014 98.7 100.9 102.62015 100.9 100.8 108.32016 106.8 103.0 112.0

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3. Terms, Definitions and Explanations

3.1 DefinitionsJobs (formerly: employed persons): Employee jobs, owners and unpaid family members, kibbutz members, workers employed through employment agencies (in monthly estimates jobs are calculated excluding workers employed through employment agencies).

Employee jobs (formerly: employees): The number of jobs of workers (permanent and temporary) who worked for at least one day during the surveyed month (or were paid leave due to illness, vacation, army reserve duty, etc.), and are on the payroll of establishments or institutions. This definition includes employee jobs of Israeli workers (reported to the National Insurance Institute on Form 102), and employee jobs of foreign workers (reported to the National Insurance Institute on Form 612), as well as employee jobs of workers from the Palestinian Authority. Self-employed persons engaging in piecework for the establishment are not included. 6

Actual work hours: The number of hours the employed person has actually worked during the determinant week. Work hours included in the count: Overtime in the same place of work or in other places of work; preparation hours of teachers and artists; waiting hours (e.g. a driver or porter waiting for work); work hours of a non-paid family member in the family business or farm (if the person worked 15 hours or more, on the average, per week).

Hours paid for: The hours actually worked plus the hours paid for but not worked, such as paid annual leave, paid public holidays, paid sick leave, paid meal breaks and time spent travelling between the home and the workplace.

Gross wages at current prices (formerly: wages and salaries Remuneration in cash or in kind payable by an employer to an employee in return for work done during the accounting period, including compensation for time that the employee did not work, such as yearly vacation, absences, and other paid vacations.

Wages include:

Remuneration in cash: Payments such as basic wages, cost-of-living allowances, seniority payments, advance payments, overtime, premiums, various benefits, allowances, grants and supplements (current or non-recurring) such as: on-call, shifts, 13th-month salary, transportation, education and proficiency allowances, car allowance, and convalescence pay.

Remuneration in kind: Payments such as contributions for car benefits, for mobile phones, holiday gifts, courses, on-the-job training, and travel abroad.

Wages do not include: Social contributions payable by employers such as: pension funds, provident funds, study funds, national insurance, and health insurance. Wages also do not include severance payments.

6 For an explanation on employed persons, employees/jobs, and employee jobs, see: Central Bureau of Statistics. Statistical Abstract of Israel 2014, No. 65. Jerusalem: Author, p. 160.

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Labour cost: Wages and salaries, and supplementary expenditures for wages. Includes all the taxable sums (before deductions) appearing on the payrolls for employee jobs, and all the expenditures made by the establishment that relate to hiring people for employee jobs and do not appear on the payrolls.

The expenditures appearing on the payrolls include: basic wages, allowances (cost of living, vocational, seniority, travel, premiums, bonuses), payments for overtime, absence days (such as vacation, illness and holidays), recreation allowance, 13 th month salary, vehicle maintenance (including imputation of employer’s vehicle which is at the disposal of the employed person), telephone, clothing, food and lodging (only if taxable), and payments in kind (such as meals, gifts, and housing).

Supplementary expenses for wages include the establishment’s expenses related to hiring employees that do not appear on the payroll. These expenses include: payments to National Insurance Institute and payments to pension funds, to provident and compensations funds. These expenses do not include wages of workers hired through employment agencies. These data, after “smoothing” the non-recurrent payments (see Paragraph 3.2: “Explanations of the Data Used for the Estimates”, below), are used in the calculation of the index of all payments related to engaging workers – the labour cost index.7

Paid hourly labour cost index – calculated as the ratio of the total labour cost index to the paid work hours index for all employees, standardized according to number of work days per month.

The index of wage per paid work hour per employee job is obtained by dividing the wage index (except non-recurrent payments and back pay for previous periods) by the paid work hours index (actual paid work hours and paid hours of absence), and standardized according to number of work days per month.

Revenue (value of sales) at current prices includes the value of local sales, sales for export, income from work (including repairs), and income from products manufactured by the establishment for its own use; taxes, such as purchase tax, excise duty, and value added tax. Subsidies and export incentives are not included.

Manufacturing industries by technological intensity:In accordance with the Standard Industrial Classification of All Industrial Activities 2011 (p. 87),8 The Manufacturing industries (excluding Mining and Quarrying) were divided into four major groups by degree of technological intensity: High-technology industries, medium-high technology industries, medium-low technology industries, and low-technology industries (an itemization of the industries included in each level of technological intensity is presented in Table A above).

7 See detailed definition in Central Bureau of Statistics. Statistical Abstract of Israel 2014, No. 65. Jerusalem: Author, p. 161.

8 Central Bureau of Statistics (2012). Standard Industrial Classification of All Economic Activities 2011. Technical Publication No. 80. Jerusalem: Author.

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Sector: The division of Manufacturing into sectors makes it possible to include institutions with similar economic behaviour and goals in the same category. An institution is an economic unit that can have assets, take on obligations, engage in economic activity, and conduct transactions with other economic units. In order to aggregate the institutional units into sectors, it is necessary to classify each unit separately. The classification of each institutional unit into sectors is determined according to the control of shares in the company. These accounts presented by sector provide information on the distribution of income in Manufacturing, the distribution of employment, etc.

According to the recommendations of the System of National Accounts 1993 (SNA), Manufacturing establishments are divided into the following sectors:

Non-financial sector– Private under Israeli ownership – private establishments;– Private under foreign ownership – includes establishments with at

least 50% of their stock under non-Israeli ownership;– Government corporations – includes establishments with at least

50% of their stock under government ownership;– Co-operatives – co-operative establishments;

Household sector – Individuals or groups of individuals living together in one dwelling, who consume products collectively (mainly food and housing) from joint sources of income and property.

3.2 Explanations of the Data Used for the EstimatesCollection – The data used to prepare the indices are gathered from Manufacturing establishments. The data on establishments with up to 10 employee jobs are usually received from administrative sources: data on jobs and wages are received from the National Insurance Institute, and the revenue data – from the Value Added Tax system.

Imputation – Data that were not received while calculating the indices were imputed according to the changes in the recorded data.

The “smoothing” system of non-recurrent payments – Usually, non-recurrent payments and back pay relate to a period of a few months. Since it is impossible to receive from the establishments accurate data of these payments according to the months to which they relate, and since there are sharp fluctuations concerning the sum of the non-recurrent payments, it was decided to include in the moving average wage every month the non-recurrent payments and back pay of the last four months (the reported month and the preceding three months). For some of these establishments, the data received referred to payments which are divided backwards, throughout the entire year.

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4. Methodology

4.1 Survey PopulationThe survey population includes establishments that meet two criteria:

Industrial characteristics – Establishments belonging to Manufacturing, Mining and Quarrying industries, as defined in the Standard Industrial Classification of All Economic Activities 2011,9 excluding the Working of Diamonds industry. In the Working of Diamonds industry, manufacturing activities are combined with commercial activities, and there is no way to obtain reliable data on the aspect of the industry that involves Manufacturing (i.e., polishing diamonds).

Economic characteristics – Establishments with at least one employee job in the business sector, and kibbutz establishments that produce commodities for sale on the market.

This population excludes establishments of proprietors with no employee jobs, non-profit establishments, and auxiliary manufacturing units of kibbutzim that only serve the kibbutz and do not sell their products on the market (e.g., sewing and metal workshops). In addition, Israeli-owned units that operate outside of the country were not included in the frame.

4.2 Sampling FrameThe frame was constructed on the basis of the business register in the CBS. The register is based mainly on combined information from two administrative files:

(a) The VAT file of dealers;

(b) The employers file of the National Insurance Institute.

From the business register, the establishments that met the criteria described in Paragraph 4.1: “Survey Population”, above, were chosen for the frame of Manufacturing indices.

4.3 Sample

4.3.1 GeneralThe manufacturing sample is planned so that the sum of revenue and not the number of establishments is estimated effectively. Therefore it is likely that the estimates obtained for the revenue (or for other variables which operate similarly) will be more accurate, whereas the estimates of the number of jobs will be less accurate and those of the number of establishments or the division by district will be even less accurate.

The frame was divided into sampling industries, which were stratified by revenue data. In each sampling stratum, a simple random sample without replacement was drawn. A supplementary sample is drawn bimonthly (Para. 4.3.3 below, Supplementary Samples – New Businesses), covering the new businesses in the

9 Central Bureau of Statistics (2012). Standard Industrial Classification of All Economic Activities 2011. Technical Publication No. 80. Jerusalem: Author, pp. 34–41.

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economy. In each year the sampling frame is updated and the businesses are allocated anew to the size strata according to the revenue data from the last year. Following this the sampling strata and probabilities are updated, and the sampling is done again, preserving the continuity of the sample as much as possible.

The dealers with the highest revenue in each industry (in the highest sampling stratum) are sampled with certainty. Dealers employing over 200 persons are sampled with certainty as well, even if their revenue was relatively low.

Following the transition to the new industrial classification the sample was renovated in 2011. The renovation included: increasing the number of sampling strata, setting new boundaries for strata, and a new allocation of the sample size per stratum. The new sample has lower sampling errors and thus its estimates are more reliable.

4.3.2 Basic SampleThe boundaries of size groups in the industry were determined using a computerized algorithm. In each industry the dealers were divided into size strata according to the total annual revenue of the business. In each sampling stratum the dealers were sampled at equal probabilities using Neyman optimal allocation (the sampling reliability changes among strata), and dealers in the top size stratum in each industry were all sampled with certainty. The higher the revenue of the unit, the higher the stratum to which it was assigned and in which the sampling probability is higher.

Each sampling unit in the framework was assigned a “Permanent Random Number” (PRN), which was used throughout the survey. This number was intended to ensure, as much as possible, the continuity of the sample over time.

Note: Following the transition to the new industrial classification the PRN of the businesses was set anew in the basic sample in 2011. Thus we obtained a sample which does not depend on the previous ones, before 2011, according to the old industrial classification.

4.3.3 Supplementary Samples – New BusinessesNew businesses are frequently opened, and in order to keep the sample up to date and avoid undercoverage of new businesses, a supplementary sample of new businesses is issued every 2 months. For this purpose, a sampling frame of units created during this period, known as a supplementary sample, is used. The units in the frame intended for supplementary samples are allocated to strata by the division boundaries determined in the basic sample (in accordance with the industry and the size of the new business).

The process of supplementary sampling is “accumulative sampling”, in which the number of those being sampled in the supplement depends, inter alia, on the size of the accumulative sample up to the previous supplement, and the size of the accumulative sample required for the present supplement.

New dealers who have not yet been allocated to a sample stratum enter a “waiting group”. In many cases it is difficult to estimate the extent of economic activity of entirely new businesses. Thus after two months, when revenue data are added, the possibility of including them in the sampling frame is re-examined.

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4.3.4 EstimationFor every dealer in the sample a weighting factor was assigned, which is the inverse of the sample probability. Intuitively, the weighting factor reflects the number of dealers in the population that he/she represents in the sample. The data on every dealer in the sample were multiplied by his/her weighting factor, and thus the datum estimated in the sample represents the survey population.

As noted, the sample probability was determined so that it will significantly reduce the relative sampling errors (of the entire survey population) of the estimated revenue. It is also possible to estimate the number of establishments or any other datum in the same manner (multiplication by the weighting factor). It is also possible to classify the economic activity by different variables, such as district, size group of businesses, or number of establishments, but the relative sampling error will generally be bigger. Thus caution should be exercised when comparing data of different years by these variables.

5. Methods of Calculation

5.1 BaseThe base for calculating Manufacturing indices in the new sample is 2011=100.0 (mean).

During the course of the year, revisions are made in the base, due to the need to update historical data in a way that the indices will not be influenced by the revisions. As a result, the data for the previous year are revised according to the ratio of indices multiplied by absolute data for the current year. Since the revisions for the previous year have been introduced at the level of divisions, there may be a lack of correspondence between the sums for total Manufacturing obtained according to the various types of categories (e.g., technological intensity).

Following adjustments in the base during the course of the year, the absolute data for revenue, jobs, labour cost, and other variables presented in this publication are the most up to date and take the place of data in previous publications.

To calculate the absolute data for previous years, it is necessary to relate to the absolute data for this year, as well as to the indices that are relevant to the time of this publication.

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5.2 Indices of Revenue, Employment and Labour CostThe indices of revenue, employment, and labour cost at the level of groups, divisions, and total Manufacturing10 are calculated as the ratio of the data on establishments after inflation in the current period, to base data. The derived indices are calculated as the ratio of the main indices. Thus, the index of wage per employee is calculated as the ratio between the index of wages and the index of total employees.

Additionally, revenue and labour cost indices are also calculated at constant prices. Measures relating to labour cost indices are divided by the Consumer Price Index, whereas the index of revenue at constant prices is calculated by dividing the index of revenue at current prices by the combined index of wholesale Manufacturing product prices and export prices.

5.3 Indicators, Weights, and Method of Calculating the Manufacturing Production Index

5.3.1 Manufacturing Production IndexThe aim of the Manufacturing production index is to reflect monthly changes in the volume of production, which is the added value of Manufacturing in each industry.

In practical terms, there is no way to obtain monthly data on added value in order to calculate the index. Therefore, other indicators and variables are used, for which the changes are similar to those of the added value, for example: product output, work hours invested in production, and revenue at constant prices, or a combination of indicators. Indices are calculated for the indicators (the changes in the indicators since the base period) within the group. The indices of the indicators for each group are weighted by the indicators weights, to obtain a production index for the group. Indices for the division and for total Manufacturing are weighted according to the added value of the groups in the division and total Manufacturing.

10 See: Central Bureau of Statistics (2012). Standard Industrial Classification of All Economic Activities 2011. Technical Publication No. 80. Jerusalem. Author.

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5.3.2 IndicatorsIn the new system, the indicators and their weights for calculating the Manufacturing production index every month were updated. The number of groups and their weights by type of indicator are presented in Table D, below.

Table D. Number of Groups and Their Weight, by Type of Indicator

Type of indicator Old sample

No.of

groups

Old sample Weights of

Manufacturing production

index

New sample No.

of groups

New sample Weights of

Manufacturing production

indexTotal 121 100.00 151 100.0

Products (Amounts of production) 15 9.95 9 4.80Products (Amounts of production) + revenue (At constant prices) 19 13.33 25 17.20Revenue (At constant prices) + work hours 48 45.90 64 43.60Revenue (At constant prices) 36 28.90 50 30.00Products (Amounts of production) + work hours + revenue (At constant prices) 3 1.92 - -Work hours - - 3 4.40

5.3.3 Manufacturing Production WeightsWhen the indices were changed to the new base 2011=100.0, the weights used to calculate Manufacturing indices were updated (the previous sample of the production index was calculated according to the 2004 weights).

In the current sample replacement the weights were updated according to the value added data of manufacturing industries from the 2012 Manufacturing Survey findings.

Table E presents the differences between weights. The table shows that the main change occurred in the Mining and Quarrying industries, which include the Extraction of Natural Gas, whose weight in the new sample rose sharply. In addition, the weight of Textiles and Wearing Apparel industries has continued to decline since 2004.

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Table E. Added Value Weights for Manufacturing Industries and Manufacturing Production Index Weights, by Industry (Division)Percentages

Code according to

the old classifica-tion (1993)

Code according to

the new classification

(2011)

Description Old sample 2004 weight

Old sample Propor-tion in 2011

New sampl

e(2011)2011

New sample(2011)2014

- Sections B–C Manufacturing; mining and quarrying 100 100 100 100

13 Section B Mining and quarrying 2.78 1.99 5.28 6.29

- Section C Manufacturing 97.22 98.01 94.72 93.7014–15 10 Food products 12.26 10.05 10.52 10.7016 11–12 Beverages and

tobacco products 1.74 1.39 1.51 1.47

17–18 13–14 Textiles and Wearing apparel 3.67 2.25 1.66 1.44

19 15 Leather and related products 0.21 0.15 0.20 0.22

20 16 Wood, cork and straw products, except furniture 0.76 0.58 0.50 0.54

21 17 Paper and paper products 2.32 1.99 1.88 1.44

22 18 Printing and reproduction of recorded media 2.29 1.60 1.73 1.37

23–24, excluding 245

19–20 Petroleum products, chemicals and chemical products 9.04 7.64 8.25 6.73

245 21 Manufacture of pharmaceutical products, including homeopathic preparations 6.73 13.46 12.12 10.32

25 22 Rubber and plastic products 5.84 6.36 4.54 4.36

Code Code Description Old Old New New

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according to the old

classifica-tion (1993)

according to the new

classification (2011)

sample 2004 weight

sample Propor-tion in 2011

sample

(2011)2011

sample(2011)2014

26 23 Other non-metallic mineral products

2.85 2.32 2.69 3.45

27 24 Basic metals 1.69 1.28 1.57 1.4028 25 Fabricated

metal products, except machinery and equipment 10.00 9.70 8.86 8.98

32–34 26 Computers and electronic and optical products 23.05 25.46 24.25 27.46

31 27 Electrical equipment 2.06 1.68 1.88 1.47

29 28 Machinery and equipment n.e.c. 2.89 2.81 3.66 3.26

35 29–30 Transport equipment 6.00 5.99 4.98 5.06

36 31 Furniture 2.87 2.51 1.98 2.3238–39 32 Other

manufacturing. 0.96 0.79 1.58 1.24- 33 Repair and

installation of machinery and equipment - - 0.35 0.47

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5.3.4 Formula for Calculating the Production Index for GroupTo calculate the production index for group Ik-kX Ikj

∑ Wkj =Ιk

Where:

k = group;

j = indicator number;

Ikj = index of indicator j in group k;

Wkj = weight of indicator j in group k;

Where:∑jWkj

= 1

5.3.5 Formulas for Calculation of the Production Index for a Division and for Total Manufacturing

The division index, which is the sum of the groups – mainly division in Manufacturing – is the weighting of indices for groups by the weights of the industries, which add up to 1. More specifically:

(1) Calculation of the production index for R industry (division) =Ir

X Ik∑kWrk

Ir =

Where Wrk – the group weight in a division

∑kWrk

= 1

(2) Calculation of the production index for total Manufacturing T – IT

Where Wk is the weight of the group and ∑Wk = 1

x Ir ∑Wr x Ik = ∑Wk =IT

Where Wr is the weight of an industry (division) in total Manufacturing

∑Wr = 1

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introduction · web viewin table 6 it can been seen that the highest cost per paid work hour for an...

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