The value added of the whole manufacturing industry is theoretically the sum of the value added of all manufacturing activities. In practice, however, due to the complexity associated with survey methods, stroke cannot be achieved simply by adding up all these value-added figures. The value added of manufacturing industry, as presented above, may not cover all units of activity of manufacturing industry due to the incomplete framework used in the survey. On the other hand, business units are often classified as manufacturing on the basis of their main activity. This implies that secondary activity can often be non-productive in nature. These differences are dealt with in the compilation of national accounts using tables of consumer uses or input-output. Thus, the MVA measures an exclusive and exhaustive contribution of manufacturing to GDP. The value added of manufacturing industry is a survey concept that refers to the net output of the industries concerned, which results from the difference between gross output and intermediate consumption. Value added is calculated without deducting the consumption of fixed assets represented by depreciation in economic accounting concepts. Depending on the survey method chosen, the value added of manufacturing can often refer to census value added, which ignores the gap between receipt and payment for non-commercial services.
In this context, survey data may also not take into account the contribution of small production units and household production units, which are often excluded from the regular industrial survey programme. Estimates for these units are made separately for the compilation of national accounts. For these reasons, manufacturing value added is used to measure growth and structure, but not level. Unido`s industrial statistics database presents the value added of manufacturing at the 2-, 3- and 4-digit ISIC level. This is the lowest possible industry group, which in many cases is almost the product group. At the 4-digit level of ISIC Revision 4, for example, data from 151 manufacturing groups are presented. A detailed description of the UNIDO databases INDSTAT2 and INDSTAT4 can be found on the statistical pages of the UNIDO website. This indicator is a measure of the share of output in a country`s economy. Manufacturing is generally defined as the “physical or chemical transformation of materials into new products”, regardless of process (machine or hand), location (factory or home) or mode of sale (wholesale or retail).1 UNIDO prepares and provides estimates of value added for the entire manufacturing sector in its databases and publications, usually from two different sources. On the one hand, detailed structural business statistics in industrial statistics (usually based on surveys and censuses) provide figures on the value added of manufacturing industry. On the other hand, the value added of manufacturing industry measures an exclusive and exhaustive contribution of manufacturing to the gross domestic product of an economy and therefore refers explicitly to the concepts of national accounts. As an example, let`s say your company has decided to outsource its in-house manufacturing to a third-party vendor in an effort to gain strategic outsourcing advantages.
Whether you have engaged Flextronics, Jabil Circuit, Foxconn, Plexus or one of many other suppliers, your supplier is committed to being a “strategic partner” that enables your business to transform its business through benefits such as its global presence, sophisticated systems, advanced manufacturing processes, world-class facilities and state-of-the-art training. Electronic contract (CM) manufacturers build products developed by their OEM customers who know the approximate cost of manufacturing their product. The OEM must choose between manufacturing itself or outsourcing. Since the OEM knows the approximate manufacturing cost and may decide to build it itself (at least in theory), CMs use the cost plus to determine the price. Detailed information on the main factors influencing the differences between the value added of manufacturing industry on the one hand and the value added of manufacturing industry on the other can be found here. .