Methodology & Notes
Background
This publication is based on data from the Annual Business Inquiry (ABI) conducted by the Office for National Statistics (ONS).
The statistics have been produced under partnership procedures agreed between ONS and the Scottish Government (SG). These have resulted in an improvement in the quality of the underlying data and consistency in the figures used by ONS and SG.
For information on the methodology used to compile regional ABI statistics, please visit the following ONS site: http://www.statistics.gov.uk/abi/background_info.asp
Scottish sample boost
Since 1998, the Scottish Government has paid for an enhanced Annual Business Inquiry sample in Scotland, to improve the quality of Scottish figures. In 2007, around 3,000 extra firms in Scotland were sampled as a result of this "boost", giving a total sample size in Scotland of around 8,100 firms.
Coverage
Scottish Annual Business Statistics provides data mainly on the Manufacturing, Construction and Service Sectors in Scotland. The Annual Business Inquiry, from which the statistics are derived, covers approximately two thirds of the economy. The main sectors not covered are the financial sector and some of the public sector. These statistics are therefore best suited to the analysis of individual industries rather than the economy as a whole.
Regional Capital Expenditure
It has been established that the estimation of regional capital expenditure is unreliable, therefore, Net Capital Expenditure figures are not now available on Scottish Annual Business Statistics website.
Office for National Statistics (ONS) has provided the following information:
"For the reference year 2005 onwards, figures on regional capital expenditure will no longer be made available on the ABI website pages. Accurate estimation of regional capital expenditure is dependent on there being a strong correlation between the variable on which any estimation is based, in this case local employment, and the variable for which we are attempting to produce estimates, here regional capital expenditure. It has been established that the relationship between regional employment and regional capital expenditure is, in fact, unreliable.
Regional capital expenditure figures for earlier years will continue to be available on the ABI website ( http://www.statistics.gov.uk/abi/default.asp), although the concerns identified apply equally to those earlier figures. ONS does not recommend the use of these regional capital expenditure figures but recognises that some users will, nevertheless, wish to have them.
It will still be possible to obtain regional capital expenditure figures for 2005 onwards by requesting either standard extracts, for which there is no charge, or special analyses, for which a charge will be made.
For more information about either of these services, please either email abi2@ons.gov.uk or telephone +44(0) 1633 812435 for standard extracts or +44(0) 1633 812674 for special analyses.
Comments on this are welcome and should be emailed to ABI2@ons.gov.uk. "
If you require Scottish Capital Expenditure figures only, you can alternatively contact the Scottish Government.
Changes which affect Total Employees and Per Employee variables from 2006
Please note that Total Employees is a head count and not a Full Time Equivalent (FTE) measure. This distinction is particularly important for sectors with high levels of part time employment (e.g. Retail and Hotels & Restaurants) especially when comparing Per Employee figures.
For 1998-2005 data, Scottish Government analysts merged ABI/1 (employment survey) and ABI/2 (financial survey) results in order to produce consistent "per employee" totals (e.g. GVA per employee). During this process, employee data was retained only if a company was part of smaller financial survey.
However, for 2006 data onwards, there has been a change in the sampling arrangements for the two parts of the ABI. In previous years, ABI/2 was a sub-sample of ABI/1 but they are now sampled separately in different months. This leads to non-matching between the two sets of results. In 2007, this affects around 4% of total ABI/2 units. For these units, employee totals have been set to their values from the Inter-Departmental Business Register (IDBR), which is updated from a range of surveys.
Further, for 2006 data onwards, ABI/1 survey reference date has been moved from December to September each year. This step change should be taken into consideration when analysing time series data.
Latest revisions
Within industry 92.20 (Radio and television activities) a significant revision has been made to 2006 Turnover and GVA. The revision is identified as due to changes in the nature of the reporting within the Industry for 2006 onwards.
Previous revisions
Within industry 23.20 (Manufacture of refined petroleum products) and 24.14 (Manufacture of other basic organic chemicals) there have been significant revisions to Turnover, Purchases and GVA for both 2005 and 2006. This is due to a large reclassification of a business from Class 23.20 to Class 24.14 that came to light during the processing of the 2006 ABI inquiry. Further, for both 2005 and 2006, there has been an additional upward revision to Class 24.14 to correct underestimation.
Within industry 92.20 (Radio and television activities) a significant revision has been made to 2005 Turnover and GVA data after some overestimation was identified. The overestimation has also been identified for earlier years but in conjunction with current Annual Business Inquiry (ABI) revision policy there will be no revision to published data for years prior to 2005.
Fluctuations in ABI time series data
ABI figures are based on an annual survey of companies. In the context of overall Scottish figures, year-on-year differences are sometimes less obvious as they can be compensated for by other changes. However, at a more disaggregate level, such as sectoral or local authority, changes in a small number of large companies can have a have a very marked effect on figures from one year to the next.
Agriculture, Forestry & Fishing (SIC1.4-1.5, 2 & 5)
In 2000 for the first time, the Forestry (SIC2) and Fishing (SIC5) sectors were surveyed as part of the Annual Business Inquiry. Parts of Agriculture (SIC1.4 & 1.5) were surveyed for the first time in 2001. Figures for these sectors are published on this site.
Within Industry SIC1.4/1.5 (Agriculture - hunting and related services activities only) employee data is volatile between years due to small sample size. Its figures should therefore be treated with caution.
Oil & Gas extraction (SIC11.1)
Annual Business Inquiry data relating to Oil & Gas extraction (SIC11.1) is allocated to UK regions (including Scotland) according to the address at which the business is registered. Such offshore activity is excluded from Scottish National Account figures (e.g. ONS Regional Accounts, where it is assigned to an "Extra-regio" category and counted separately).
Service Sector
On this site, the Service Sector is defined as codes 50 to 99 of Standard Industrial Classification 2003 (SIC03). Although the tables refer to the service sector for simplicity, it should be noted that the figures quoted do not relate to the entire service sector, but only to those sectors covered by the Office for National Statistics' Annual Business Inquiry. Broadly, this does not include some of the public sector and excludes other industries such as the financial sector. The SICs that are excluded are 65-67 (Financial Intermediation), 75 (Public Administration) and the following sub-classes of SIC 85 (Health and Social Work):
85.111 - Public sector hospital activities, including NHS Trusts
85.12 - Medical practice activities
85.13 - Dental practice activities
85.311 - Charitable social work activities with accommodation
85.321 - Charitable social work activities without accommodation
Code of Practice
This is a National Statistics publication. It has been produced to the high professional standards set out in the Code of Practice for Official Statistics ( http://www.statisticsauthority.gov.uk/assessment/code-of-practice/code-of-practice-for-official-statistics.pdf ) and the Pre-release Access to Official Statistics (Scotland) Order 2008 ( http://www.opsi.gov.uk/legislation/scotland/ssi2008/pdf/ssi_20080399_en.pdf ).