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1. GeneralThe Central Bureau of Statistics (CBS) collects monthly data from a sample of approximately 2,400 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 2013. 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)
In the past these sections constituted one category.
Manufacturing indices, which are calculated monthly, 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 computing Manufacturing production indices differ from those used to compute 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 groups.
Tables 14–18 present data on employment and revenue, by technological intensity.
Table 19 deals with mobility of workers in Manufacturing.
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Publication of the Indices
2013 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. All of the 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 Manufacturing indices is posted monthly on the CBS website.
A preliminary estimate 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 Findings2.1 Production and RevenueIn 2013, the level of Manufacturing production in Manufacturing establishments with at least one employee job (excluding the Diamond industry) was 0.6%% higher (at constant prices) than in 2012, following an increase of 4% in 2012, 2% in 2011, of 9.5% in 2010, a decline of 6.6% in 2009, and continuous increments of 7.2% in 2008, 6% in 2007, 8.5% in 2006 and 4.9% in 2005.
Manufacturing, Quarrying and Mining revenue amounted to NIS 421 billion in 2013, compared with NIS 427 billion in 2012 (a nominal decrease of 1.4%). Local sales constituted 59% of Manufacturing, Quarrying and Mining revenue, and export sales constituted 41% of the Manufacturing revenue.
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 Manufacturing revenue at constant prices is computed as follows: The index of 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.
The difference in the development of the production index and the development of the revenue index at constant prices in 2013 versus 2012 can be attributed to the fact that the Manufacturing production index is weighted by the changes in value added (which is calculated from the annual Manufacturing Survey), as mentioned, and the index of revenue is weighted by the distribution of revenue. Those weights are different. Although revenue is an indicator in the index of Manufacturing production, it is not the only indicator. There are industries for which the index of
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actual work hours and the amounts of products produced are part of the calculation of their Manufacturing production index (Table E).
In 2013, exports as a percentage of revenue, of establishments under foreign ownership and of government corporations was 61% and 53%, respectively (see definition of “Sector” in Paragraph 3.1: “Definitions”, below ).
Establishments in which sales reached NIS 100 million and over in 2013 constituted 4.5% of all Manufacturing, Quarrying and Mining establishments, and employed 53% of all workers in these industries. The sales of these establishments amounted to 80% of the total revenue in the industries. In the division Manufacture of Computers and Electronic and Optical Products, the sales of 18% of all establishments amounted to NIS 100 million and over (91% of the total revenue in this division), and 80% of all jobs in the industries were in those establishments.
2.2 Employment and WagesThe number of jobs in Manufacturing, Quarrying and Mining in 2013 was estimated at an average of 365,000 per month (see the definition of “Jobs” in Paragraph 3.1: "Definitions", below), compared to 364,000 jobs in 2012; 14,000 of the workers in 2013 (4%) were hired through employment agencies. Regarding the number of actual work hours, there was a decrease of 0.5%, and there was an increase of 0.6% in the Manufacturing production index, so that the product per work hour increased by 1.1% compared with 2012.
In 2013, 67.9% of the jobs in Manufacturing were in the private sector under Israeli ownership, 7.2% were in co-operatives, another 7.5% were in government corporations, 14.6% were in the private sector under foreign ownership, and 2.8% were in the households sector.
The cost per work hour in Manufacturing, Quarrying and Mining amounted to NIS 81 in 2013, compared with NIS 78 in 2012. The highest cost was recorded in establishments with 300 jobs and over – NIS 108 per paid work hour per employee job; and the lowest cost – NIS 43 – was recorded in establishments with 1–4 jobs.
The share of supplementary expenditures for wages in 2013 was 20.3%. The highest average annual wage per employee job was recorded in the following divisions: Quarrying and Mining industries (NIS 278,000), Manufacture of Computers and Electronic and Optical Products (NIS 228,000), and Manufacture of Other Transport Equipment (NIS 219,000), whereas the average in total Manufacturing, Mining and Quarrying was NIS 151,000. The lowest average annual wage was recorded in Manufacture and Processing of leather and Related Products, Manufacture of Wearing Apparel, and Manufacture of Furniture (NIS 77,000–92,000).
As in previous years, in 2013 government corporations paid the highest annual wage per employee job – NIS 264,000, compared to NIS 125,000 in co-operatives, and NIS 135,000 in private establishments under Israeli ownership and NIS 58,000 in the Households Sector. This was also a result of differences in the distribution and centralization of the establishments in the different sectors.
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2.3 Export-Intensive Establishments1
In 2013, 98% of the Manufacturing exports were carried out by 970 export-intensive establishments, which constituted 7.8% of all Manufacturing, Quarrying and Mining establishments. They employed 41% of the workers in Manufacturing, Quarrying and Mining and their revenue was 57% of the total revenue of these industries.
The cost per work hour in export-intensive establishments was 36% higher than the average in Manufacturing, Mining and Quarrying, and amounted to a total of NIS 110. The revenue per job in these establishments was 39% higher than the corresponding revenue in all Manufacturing, Quarrying and Mining establishments.
The average number of jobs per establishment in the export-intensive establishments was 155, compared to an average of 29 jobs per establishment in total Manufacturing, Quarrying and Mining. Of the export-intensive establishments, 76% were in the private sector under Israeli ownership, 14% were in the private sector under foreign ownership, 9% were co-operatives, and 1% pertained to government corporations.
2.4 Mobility of WorkersThe rise in the employment level in 2013 originated in the employment expansion (more workers were absorbed than discharged).
An analysis of workers’ mobility by establishments shows that 16,300 jobs (4% of the total jobs in Manufacturing) were added in 2013 in existing establishments where the number of jobs increased. By contrast, in existing establishments where employment declined, 14,000 jobs were subtracted. In addition, 6,900 jobs were added in establishments opened and 8,200 jobs were subtracted in establishments closed throughout the year.
An analysis of workers’ mobility by size group (number of jobs in establishment) shows that the rise in employment was higher in establishments with 100–299 jobs (the net change in employment there was positive). In establishments with 1–19 jobs, employment decreased (the net change in employment was negative).
Table 19 presents data on the rate of mobility in employment, which is the ratio between the number of workers absorbed and discharged to the total workers. The highest mobility rate (24%) was in the small establishments, with up to 19 jobs.
The data on mobility of workers do not include persons employed through employment agencies.
2.5 Technological IntensityIn accordance with the classification recommended by the OECD and the EUROSTAT, the Manufacturing industries (Section C) were divided into four groups, by technological intensity: This classification is done according to the main activity of each establishment and its industrial affiliation, by 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
1 Establishments whose exports constitute over 50% of their sales value, and those whose exports amount to over NIS 10 million a year and comprise over 25% of their sales.
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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.
High-technology industries are characterized by their substantial contribution to Manufacturing exports. In 2013, half of the Manufacturing exports derived from establishments classified as high-technology industries. All four of the technological intensity groups recorded an increase in exports between 2004 and 2008. In 2009 there was a decline in exports in most of the technology groups, and in 2010, exports increased in all groups. In 2011, there was a decline only in high technology industries, which led to a decline in all Manufacturing industries. In 2013, there was an increase in the exports of high and high-medium technologies and in low and medium-low technologies there was a decline.
The indices for 2004–2011 were calculated anew by a transition matrix of industries from the old classification (1993) to the new one (2011) in order to adjust them to the updated definition of technological intensity.
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Table A. – Industries, by Technological Intensity(1)
Technological intensity Code
Description
High technology 21 Manufacture of pharmaceutical products and homeopathic pharmaceutical preparations
26 Manufacture of computers, and electronic and optical products
303 Manufacture of air and spacecraft, and related machinery
Medium-high technology
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
Medium-low technology
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
Low technology 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
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Table A. – Industries, by Technological Intensity (Cont.)(1)
Technological intensity Code Description
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
(1) See CBS (2012). The Industrial Classification of All Economic Activities 2011, Technical Publication No. 80. Jerusalem: Author, p. 585.
In 2013, exports totalled NIS 170 billion. High-technology exports were almost thrice as high as medium-high technology exports and medium-low technology exports, and over eight and half times as high as low-technology exports.
DIAGRAM 1. – EXPORTS OF MANUFACTURING ESTABLISHMENTS, BY TECHNOLOGICAL INTENSITY (AT CONSTANT PRICES)
BASE 2011=100
50
60
70
80
90
100
110
120
2005 2006 2007 2008 2009 2010 2011 2012 2013
Indi
ces
Manufacturing –total
High technology
Medium-hightechnology
Medium-lowtechnology
Low technology
The revenue from local sales in manufacturing, Mining and Quarrying in 2013 amounted to NIS 250 billion – and 36% of it derived from low-technology industries. By contrast to the increase in 2013 compared with 2012 in revenue from exports at constant prices a decrease in the revenue from local sales at constant prices was recorded in the entire manufacturing. Thus, in 2013 compared to 2012 the total revenue remained almost the same.
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DIAGRAM 2. – OVERALL MANUFACTURING INDICES: REVENUE, EXPORTS, AND LOCAL SALES (AT CONSTANT PRICES)
BASE 2011=100
60
70
80
90
100
110
2005 2006 2007 2008 2009 2010 2011 2012 2013
Indi
ces
Exports (NIS)
Revenue
Local sales
The Manufacturing production index decreased by 1.1% in 2013. In 2004–2008 it increased by almost 6.6% on average. In these years the main growth in the manufacturing production was in high-technology industries whereas the lowest level of growth was found in low-technology industries. In 2009, the index declined in all of the technological intensity groups, mainly in the medium-low. In 2010–2012 the index increased (excluding a decline of 0.1% in 2011 in high-technology industries and a decrease of 1% in 2012 in low-technology industries).
Table B. – Annual Change in the Manufacturing Production Index,by Technological Intensity (2011 Classification)
Percentages
2008–2004 2009 2010 2011 2012 2013
Manufacturing – total 6.6 -5.8 7.9 2.2 4.7 -1.1
High technology 11.8 -0.9 8.8 -0.1 9.3 -1.9
Medium-high technology 4.3 -9.3 5.6 3.4 4.1 -0.4
Medium-low technology 5.2 -14.6 13.1 8.1 1.8 0.1
Low technology 1.3 -5.1 2.9 1.1 -1.0 -0.6
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DIAGRAM 3. – MANUFACTURING PRODUCTION INDICES, BY TECHNOLOGICAL INTENSITY
BASE 2011=100
50
60
70
80
90
100
110
2005 2006 2007 2008 2009 2010 2011 2012 2013
Indi
ces
Manufacturing –total
High technology
Medium-hightechnology
Medium-lowtechnology
Low technology
In 2013, 27% of the jobs in Manufacturing were in high-technology industries; and 31% of the jobs in Manufacturing were in low-technology industries, which are labour-intensive. Following an increase in the number of jobs between 2004 and 2008, there was a decline in the number of jobs in all technological intensity groups in 2009. In 2010–2012, the number of jobs increased in all groups (except for a decline in low technology industries in 2011). In 2013 there was an increase of 0.3% in the number of jobs in Manufacturing compared with the previous year, due to the influence of the rise in the industries of the medium-high and the medium-low technologies.
DIAGRAM 4. – JOBS IN MANUFACTURING, BYTECHNOLOGICAL INTENSITY
BASE 2011=100
80
85
90
95
100
105
2005 2006 2007 2008 2009 2010 2011 2012 2013
Indi
ces
Manufacturing –total
High technology
Medium-hightechnology
Medium-lowtechnology
Low technology
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Table C. – Percentage of Change in Manufacturing Production, Employee Jobs,
and Wage per Employee Job, by Technological Intensity 2005–2013 (Each Year Compared to the Previous One)(1)
Low technologyMedium-low technologyMedium-high technologyHigh technologyManufacturing – total
Wage per em-ployeejob (at
con-stant prices)
Em- ployee
jobs
Produc-tion
Wageper em-ployeejob (at
constant prices)
Em-ployee
jobs
Produc-tion
Wageper em-ployeejob (at
constant prices)
Em-ployeejobs
Produc-tion
Wageper em-ployeejob (at
constant prices)
Em-ployeejobs
Produc-tion
Wageper em-ployeejob (at
constant prices)
Em-ployeejobs
Produc-tion
2.60.41.40.41.75.93.40.50.62.64.29.12.81.85.12005
1.80.72.54.72.57.2-0.44.70.21.76.617.92.63.19.12006
2.61.02.23.45.84.74.36.011.92.96.16.13.84.25.52007
-1.2-0.4-0.8-2.93.22.9-2.52.55.1-7.73.914.3-4.12.16.92008
-1.9-4.2-5.1-3.2-7.4-14.6-1.5-3.0-9.3-1.1-4.7-0.9-1.6-4.7-5.82009
1.21.62.92.51.813.11.02.65.60.92.08.81.32.07.92010
0.5-0.31.10.13.88.11.30.73.4-1.53.1-0.10.01.72.22011
0.30.2-1.00.81.31.82.21.94.1-0.10.29.30.50.74.72012
1.2-0.3-0.61.51.00.10.01.6-0.41.40.6-1.91.10.3-1.12013
(1) The changes were calculated of the chained series based on 2011 due to the transition to the new classification.
3. Terms, Definitions and Explanations3.1 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).2
Employee jobs (formerly: employees): All workers on the employee payroll, including members of co-operatives, as well as workers from Judea and Samaria Area. Unsalaried kibbutz members employed in a kibbutz establishment are considered to be owners. Self-employed persons engaging in piecework for the establishment are not included.2
Actual work hours include overtime hours and do not include paid absence hours (such as sick days, vacations), or work hours of proprietors and their family members.
Wages (formerly: wages and salaries): All payments on which income tax is due (before deduction of taxes) appearing in employee payrolls, including: basic salary,
2 For an explanation on employed persons, employees/jobs, and employee jobs, see: CBS. Statistical Abstract of Israel 2014, No. 65. Jerusalem: author, p. (160).
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and the following increments: cost of living, professional, seniority, and family allowances (excluding allowances for employees’ children) and travel allowance, premiums, bonuses and overtime payment, absence (e.g., vacation, sick pay, religious holidays), convalescence, professional literature and “13th-month” salary, as well as car allowance (including imputation for a vehicle owned by the employer and used by the employee), telephone, clothing, per diem expenses (on which only income tax is due), and payments in kind (e.g., meals, holiday gifts, and housing), as well as non-recurrent payments, back pay for previous periods, shift work, on-call pay, incentive pays, proficiency allowance and retirement grants.
Labour cost includes, in addition to wages, supplementary expenditures for them and other cost components such as the employer’s portion in payments to national insurance, training funds, provident funds, severance pay by the establishment, transport of workers, upkeep of cafeteria, and worker training expenses. 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.3
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:4
High technology includes: Manufacture of Pharmeceutical Products and Homeopathic Pharmaceutical Preparations; Manufacture of Computers and Electronic and Optical Products; and Manufacture of Air and Spacecraft and Related Machinery.
Medium-high technology includes: Chemicals and Chemical Products; Manufacture of Weapons and Ammunition; Machinery and Equipment; Manufacture of Electrical Equipment; Manufacture of Machinery and Equipment n.e.c.; Manufacture of Motor Vehicles, Trailers and Semi-Trailers; Manufacture of Other Transport Equipment (excluding Building of Ships and Boats and Manufacture of Air and Spacecraft and Related Machinery); Manufacture of Medical, Dental and Orthopedic Instruments and Supplies.
Medium-low technology includes: Reproduction of Recorded Media; Manufacture of Coke and Refined Petroleum Products; Manufacture of Rubber and Plastic Products; 3 See detailed definition in CBS. Statistical Abstract of Israel 2014, No. 65. Jerusalem: author, p.
(161).4 See: CBS (2012). Standard Industrial Classification of All Economic Activities 2011. Technical
Publication No. 80. Jerusalem: Author, p. (87).
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Manufacture of Other Non-Metallic Mineral Products; Manufacture of Basic Metals, Manufacture of Fabricated Metal Products, excluding Machinery and Equipment (excluding Weapons and Ammunition); Building of Ships and Boats; Repair and Installation of Machinery and Equipment.
Low technology includes: Manufacture of Food; Beverages and Tobacco Products; Manufacture of Textiles; Manufacture of Wearing Apparel; Manufacture of Leather and Related Products; Manufacture of Wood and Cork Products, excluding Furniture; Manufacture of Straw and Plaiting Materials; Manufacture of Paper and Its Products, Printing of Recorded Media; Manufacture of Furniture; and other manufacturing industries (excluding Manufacture of Medical, Dental or Orthopedic Instruments and Supplies).
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 revenue in Manufacturing, the distribution of employment, etc.
According to the recommendations of the System of National Accounts 1993, Manufacturing establishments are divided into the following sectors:
Non-financial sector– Private under Israeli ownership – private establishments
– Private under foreign ownership – establishmentsunder foreign ownership – includes establishments with atleast 50% of their stock under non-Israeli ownership
– Government corporations – includes establishments with atleast 50% of their stock under government ownership
– Co-operatives – co-operative establishments
Household sector – includes businesses that are owned by householdsand not incorporated as companies.
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
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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.
4. Methodology
4.1 Survey PopulationThe survey population includes all 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 2011,5 excluding the Diamond industry. In the Diamond 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 self-employed 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 Sample4.3.1 General
The 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
5 See: 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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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, covering the new businesses in the 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 Sample
The 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 Businesses
New 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.
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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.
4.3.4 Estimation
For every dealer in the sample a weighting factor was assigned, which is the opposite 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 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.
To calculate the absolute data for previous years, it is necessary to relate to absolute data for 2013, and to the indices that are relevant to this publication. For example: In this publication, the estimated number of employee jobs in Manufacturing, Mining and Quarrying in 2013 was approximately 344,200, compared with about 337,900 in 2011 (Table 1). Those data replace the estimate of 345,500 employee jobs in Manufacturing) including Mining and Quarrying) in 2011, which was published in Manufacturing Indices 2011 – Annual Summaries.6
5.2 Indices of Revenue, Employment and Labour Cost
6 CBS (2013). Special Publication No. 1540. Jerusalem: author, p. 33.
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The indices of revenue, employment, and labour cost at the level of groups, divisions, and total Manufacturing 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.
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5.3 Indicators, Weights, and Method of Calculating the Manufacturing Production Index
Manufacturing Production Index
The 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 compute 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.
Indicators
In 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
New sample Old sample
No.
of groups
Weightsof
Manufacturing
production index
No.
of groups
Weightsof
Manufacturing
production index
Total 121 100.00 151 100.00Products(1) 15 9.95 9 4.8Products(1) + revenue(2) 19 13.33 25 17.2Revenue(2) + work hours 48 45.90 64 43.6Revenue(2) 36 28.90 50 30.0Products(1) + work hours + revenue(2) 3 1.92Work hours 3 4.4
(1) Amounts of production.(2) At constant prices.
Manufacturing Production Weights
When 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).
(31)
In the current sample replacement the weights were updated according to the value added data of manufacturing industries from the 2009 Manufacturing Survey (with revisions based on primary findings from the 2010 Manufacturing Survey), and adjusted to the base year 2011.
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.
Table E. – Added Value Weights for Manufacturing Industries and Manufacturing Production Index Weights, by Industry (Division)
PercentagesCod
e according to
the old classification
(1993)
Code
according to
the new classification
(2011)
Description
Manufacturing production index
weights, percentages
Old sample N
ew sample
2011
2004 weight
Proportion in 2011
Sections B–C Manufacturing; mining and
quarrying
100.0
100.0
100.00
13 Section B
Mining and quarrying 2.78
1.99
5.28
Section C
Manufacturing 97.22
98.01
94.72
14–15
10 Food products 12.26
10.05
10.52
16 11–12
Beverages and tobacco products
1.74
1.39
1.51
(32)
17–18
13–14
Textiles and Wearing apparel 3.67
2.25
1.66
19 15 Leather and related products 0.21
0.15
0.20
20 16 Wood, cork and straw products, except furniture
0.76
0.58
0.50
21 17 Paper and paper products 2.32
1.99
1.88
22 18 Printing and reproduction of recorded media
2.29
1.60
1.73
23–24, excluding 245
19–20
Petroleum products, chemicals and chemical products
9.04
7.64
8.25
245 21 Pharmaceutical products 6.73
13.46
12.12
25 22 Rubber and plastic products 5.84
6.36
4.54
26 23 Other non-metallic mineral products
2.85
2.32
2.69
27 24 Basic metals 1.69
1.28
1.57
28 25 Fabricated metal products, except machinery and equipment
10.0
9.70
8.86
32–34
26 Computers and electronic and optical products
23.05
25.46
24.25
31 27 Electrical equipment 2.06
1.68
1.88
29 28 Machinery and equipment n.e.c.
2.89
2.81
3.66
35 29– Transport equipment 6 5 4
(33)
30 .00
.99
.98
36 31 Furniture 2.87
2.51
1.98
38–39
32 Other manufacturing. 0.96
0.79
1.58
33 Repair and installation of machinery and equipment
0.35
(34)
Formula for Calculating the Production Index for Group
To calculate the production index for group Ik-k X Ikj=
Where k = group;
j = indicator number;
Ikj = index of indicator j in group k;
Wkj = weight of indicator j in group k;
Where:
1=
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 Ir=
where Wrk – the group weight in a division
1=
(2) Calculation of the production index for total Manufacturing T – IT
where Wk is the weight of the group and = 1
x Ir x Ik = =IT
where Wr is the weight of an industry (division) in total Manufacturing
1 =
(35)