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QUALITY DECLARATION - SUMMARY


INSTITUTIONAL ENVIRONMENT

The statistics presented have been derived using a combination of directly collected data from the annual Economic Activity Survey (EAS), conducted by the Australian Bureau of Statistics (ABS), and Business Activity Statement (BAS) data provided by businesses to the Australian Taxation Office (ATO). The survey data were collected under the authority of the Census and Statistics Act 1905. The Income Tax Assessment Act 1936 provides for the ATO to pass information to the Australian Statistician for the purposes of the Census and Statistics Act 1905.

For information about the institutional environment of the Australian Bureau of Statistics (ABS), including its legislative obligations, financing and governance arrangements, and mechanisms for scrutiny of ABS operations, please see ABS Institutional Environment.


RELEVANCE

The data illustrate the size, structure and performance of the manufacturing industry in Australia during the 2006-07 financial year and, to a lesser extent, over time. The estimates are also used in the compilation of Australian National Accounts aggregates, also produced by the ABS.

The businesses that contribute to the statistics in this release are classified by industry, in accordance with the Australian and New Zealand Industrial Classification (ANZSIC), 2006 edition ('ANZSIC 2006').

For all industry subdivisions (as specified in ANZSIC 2006) estimates are presented of: employment; income; expenses; industry value added; operating profit before tax; selected components of these aggregates and derivations; and capital expenditure.

The scope of the estimates in this release consists of all business entities classified, on the ABS Business Register, to Division C of ANZSIC 2006. Entities classified to the General government institutional sector are excluded.

The frame used for the survey of the manufacturing industry, like most ABS economic surveys, was taken from the ABS Business Register. The ABS Business Register is updated monthly to take account of new businesses and businesses which have ceased operating.

The period covered by the estimates is, in general, the twelve months ended 30 June. Where businesses are unable to supply information on this basis, an accounting period for which data can be provided is used for data other than that relating to employment. Such businesses make a substantial contribution to some of the estimates presented in this release. As a result, the estimates can reflect trading conditions that prevailed in periods outside the twelve months ended June in the relevant year.

The survey is designed primarily to deliver national estimates for all industry subdivisions within the scope of the collection. Estimates of key data variables at the industry subdivision level for states and territories are also produced, but the survey was not specifically designed for these purposes.


TIMELINESS

The survey is conducted annually. Forms are despatched in August. The business taxation data are received in November following the end of the reference period. The ABS aims to publish estimates from its annual business survey program within twelve to fifteen months of the end of the reference period.


ACCURACY

The ABS aims to produce high quality data from its industry collections while minimising the reporting burden on businesses. To achieve this, extensive effort is put into survey and questionnaire design, collection procedures and processing. Estimates from previous iterations of this survey were produced using the number raised estimation methodology. The 2006-07 survey used generalised regression estimation. Generalised regression estimation is a form of ratio estimation which makes use of auxiliary data items which are strongly correlated with key data items directly collected by the ABS from businesses. The auxiliary variables used in this survey were turnover and wages from data sourced from the Australian Taxation Office (ATO). Use of this methodology allowed high quality statistics to be produced from a small sample of 6,368 businesses.

Two types of error can occur in estimates that are based on a sample survey: non-sampling error and sampling error.

Non-sampling error arises from inaccuracies in collecting, recording and processing the data. Every effort was made to minimise reporting error, by the careful design of questionnaires, intensive training of survey analysts, and efficient data processing procedures.

Non-sampling error also occurs when information cannot be obtained from all businesses selected in the survey. For the 2006-07 survey of the manufacturing industry, there was a 93.1% response rate from all businesses that were surveyed and found to be operating during the reference period. Data were imputed for the remaining 6.9% of operating businesses. Imputed responses contributed 5.2% to the estimate of sales and service income for the manufacturing industry.

Sampling error occurs when a sample, rather than the entire population, is surveyed. It reflects the difference between estimates based on a sample and those that would have been obtained had a census been conducted. One measure of this difference is the standard error. There are about two chances in three that a sample estimate will differ by less than one standard error from the figure that would have been obtained if all businesses had been included in the survey, and about nineteen chances in twenty that the difference will be less than two standard errors.

A measure of sampling error is the relative standard error, which is obtained by expressing the standard error as a percentage of the estimate to which it refers. The relative standard error is a useful measure in that it provides an immediate indication of the sampling error in percentage terms, and this avoids the need to refer also to the size of the estimate. Relative standard errors (RSEs) of key estimates are available in Technical Note 2 of Manufacturing Industry, Australia,2006-07 (cat. no. 8221.0).

The design of the survey included consideration of RSEs for state and territory estimates. The size of the RSEs for the survey was greater than expected or designed for, and caution should be applied when using state estimates at the ANZSIC subdvision level. The method for compiling the estimates is explained in Technical Note 1 of Manufacturing Industry, Australia,2006-07 (cat. no. 8221.0).


COHERENCE

The ABS has been conducting annual surveys of the manufacturing industry since 1968-69.

A core set of data items has been collected each year. The definitions of these are reviewed each year and are refined or respecified as needed. Additional data items are collected in different years, in response to demand and priorities.

From 2006-07 reference year the survey has been conducted using ANZSIC 2006 and new methodologies. As a result, a new series of these estimates has commenced from 2006-07. Estimates of key data variables for 2006-07 are accompanied by estimates for 2004-05 and 2005-06 on a comparable basis.


INTERPRETABILITY

Estimates from the survey of the manufacturing industry are available as original series only, and are not seasonally or trend adjusted.

Although financial estimates in this release relate to the full twelve months, employment estimates relate to the last pay period ending in June of the given year. As such, estimates of values per person employed can be affected by any fluctuations in employment during the reference period.

Further information about terminology and other technical aspects associated with these statistics can be found in the publication Manufacturing Industry, Australia, 2006-07 (cat. no. 8221.0), which contains detailed Explanatory Notes, Technical Notes and a Glossary.


ACCESSIBILITY

Data from the 2006-07 survey of the manufacturing industry are available in a variety of formats. The formats available free of charge on the ABS website are: