From the September 1998 SURVEY OF CURRENT
BUSINESSThe combined domestic and foreign operations of nonbank U.S. multinational companies (MNC's) continued to grow at a relatively fast pace in 1996. The growth in three key measures of MNC operations–gross product, employment, and capital expenditures—exceeded the average annual growth rate for 1989–95. According to preliminary estimates from the annual survey of U.S. direct investment abroad conducted by the Bureau of Economic Analysis (BEA), worldwide gross product of U.S. MNC's (U.S. parents and majority-owned foreign affiliates combined) increased 7 percent, compared with a similar increase in 1995 and an average annual increase of 5 percent in 1989–95; employment increased 2 percent, compared with a 1-percent increase in 1995 and negligible growth in 1989–95; capital expenditures increased 5 percent, compared with a 7-percent increase in 1995 and an average annual increase of 4 percent in 1989–95 (table 1)./1/
The 7-percent increase in MNC gross product in 1996 reflected continued economic growth in the United States and abroad; in 1996, current-dollar gross domestic product (GDP) increased 5 percent in the United States and averaged about 3 percent in most major host countries./2/ As in 1995, the favorable economic conditions resulted in both the expansion of existing MNC operations and the growth of MNC operations through acquiring and establishing other businesses, both in the United States and abroad. MNC growth also resulted from increased production to meet strong demand for new and improved products, such as faster semiconductors and enhanced computer software, and from increases in crude oil prices. Acquisitions of foreign affiliates were spurred by opportunities created by host-country privatizations, particularly in the electric power and telecommunications industries.
The growth in U.S. MNC gross product in 1996 was balanced between U.S. parents and their foreign affiliates: The gross product of both U.S. parents and their majority-owned foreign affiliates (MOFA's) grew 7 percent in 1996. For U.S. parents, this rate of growth was slightly faster than the 5-percent growth rate in 1989–95; for MOFA's, it was about the same as the growth rate in 1989–95.
Additional highlights of U.S.-MNC operations in 1996 follow:
Revisions to the 1995 estimates.—The estimates of U.S.-MNC operations for 1995 were revised to incorporate the final results of the 1995 Annual Survey of U.S. Direct Investment Abroad./3/ For the key items, the revisions from the preliminary estimates were relatively small: The increase in gross product was revised up 0.6 percentage point to 6.6 percent; the increase in employment was revised down 0.2 percentage point to 0.9 percent; and the increase in capital expenditures was revised down 1.4 percentage points to 6.7 percent.
Organization of the article.—This article has three parts. The first part analyzes the worldwide operations of U.S. MNC's; the second part analyzes their domestic (U.S.-parent) operations; and the third part analyzes their foreign (foreign-affiliate) operations.
This section examines worldwide U.S.-MNC operations. It also compares the domestic and the foreign sides of these operations./4/
Gross product of all U.S. MNC's grew 7 percent in 1996, to $1,965 billion; the U.S.-parent and the MOFA components of U.S.-MNC gross product both grew at that rate. Available evidence suggests that these increases reflected substantial increases in the real gross product of both parents and MOFA's as well as moderate increases in prices. The gross product of U.S. parents grew 7 percent, well in excess of the 2-percent rate of U.S. price inflation (as measured by the gross domestic product implicit price deflator for all private U.S. businesses, except depository institutions). Despite the dampening effect of a mild appreciation of the U.S. dollar, the gross product of MOFA's also grew 7 percent, exceeding the 4-percent average rate of price inflation in host countries./5/
Worldwide production and the productive resources of U.S. MNC's remained concentrated in the United States: In 1996, U.S. parents accounted for about three-quarters of MNC gross product, capital expenditures, employment, and profit-type return. From 1989 to 1996, however, the distribution of the first three items shifted slightly from the United States to abroad: The MOFA share of worldwide MNC gross product edged up from 23 percent to 25 percent; the MOFA share of MNC capital expenditures edged up from 23 percent to 24 percent; and the MOFA share of MNC employment rose from 21 percent to 25 percent (table 2). In contrast, the MOFA share of worldwide MNC profit-type return fell from 34 percent in 1989 to 28 percent in 1996, probably in response to cyclical factors here and abroad that were relatively less favorable to MOFA's in 1996 than in 1989.
By industry, the most significant shift towards foreign operations was in manufacturing. The MOFA share of MNC gross product in manufacturing rose from 26 percent in 1989 to 29 percent in 1996; the MOFA share of MNC capital expenditures rose from 26 percent to 29 percent; and the MOFA share of MNC employment rose from 27 percent to 32 percent. The growth in these MOFA shares partly reflected the increasing globalization of manufacturing; both production abroad by U.S. MNC's and production in the United States by foreign MNC's have been expanding. Production abroad by U.S. MNC's may have been stimulated by structural economic changes, such as the further integration of the European Union and the economic liberalizations in Latin America and in Eastern Europe, that have created new market opportunities in host countries.
This section examines the origins of MNC output and the changes in the pattern of the origins of output from 1989 to 1996. The output of U.S. MNC's (sales to unaffiliated customers plus inventory change) consists of both the gross product that originates within the MNC's themselves and the gross product that originates elsewhere and is incorporated in the intermediate inputs purchased by MNC's from outside suppliers. The gross product originating in U.S. MNC's reflects the gross product of both the U.S. parents and their foreign affiliates.
The origins of U.S.-MNC output were essentially unchanged: The share of the output of U.S. MNC's that originated within the MNC's themselves was 36 percent in 1989 and 35 percent in 1996 (table 3, column 8). The share of MNC output that was accounted for by U.S.-parent gross product edged down from 28 percent to 26 percent, whereas the share accounted for by MOFA gross product edged up from 8 percent to 9 percent.
In 1996, U.S.-MNC-associated trade—U.S. trade involving U.S. parents, their foreign affiliates, or both—accounted for 65 percent of all U.S. exports of goods and for 40 percent of all U.S. imports of goods (table 4 and chart 2)./6/
Of the $407 billion in U.S.-MNC-associated exports in 1996, 40 percent represented trade between U.S. parents and their foreign affiliates—intra-MNC trade—and 60 percent represented U.S.-MNC trade with others. Of the $245 billion in trade with others, 87 percent represented exports shipped by U.S. parents to foreigners other than their foreign affiliates, and 13 percent represented exports shipped to foreign affiliates by U.S. persons other than their U.S. parents.
Of the $321 billion in U.S.-MNC-associated imports of goods in 1996, 42 percent represented intra-U.S.-MNC trade, and 58 percent represented U.S.-MNC trade with others. Of the $185 billion in trade with others, 86 percent represented imports shipped to U.S. parents by foreigners other than their foreign affiliates, and 14 percent represented imports shipped by foreign affiliates to U.S. persons other than their U.S. parents.
This section examines the following selected aspects of the domestic (U.S.-parent) operations of U.S. MNC's: The 1995–96 change in U.S.-parent gross product by industry and by source of change; the U.S.-parent share of the gross product of all private U.S. businesses in 1989 and 1996; and the origin of U.S.-parent output in 1989 and 1996.
The gross product of all U.S. parents increased 7 percent in 1996, to $1,467 billion, compared with a 5-percent increase in 1989–95 (table 5).
By industry.—In 1996, U.S.-parent gross product increased most rapidly in wholesale trade (38 percent), finance (except depository institutions), insurance, and real estate (32 percent), services (17 percent), and petroleum (14 percent)./7/
The increase in wholesale trade mostly reflected the reclassification of some U.S. parent companies from manufacturing to wholesale trade./8/ The increase in finance (except depository institutions), insurance, and real estate partly reflected the U.S. parents' expansion through acquisitions. The increase in services partly reflected increased sales to meet strong demand for new products (such as enhanced computer software and data processing services). The increase in petroleum was related to higher product prices.
By source of change.—Changes in the gross product of U.S. parents are the net result of changes in their operations (including the acquisition of other U.S. companies), of parents entering the survey universe because they established or acquired their first foreign affiliate, of parents departing the universe because they sold or liquidated their last foreign affiliate, and of other changes (table 6). In 1996, most of the increase in the gross product of U.S. parents was attributable to changes in the operations of U.S. companies that were parents in both 1995 and 1996; some of their growth reflected the acquisition of other U.S. businesses.
The gross product of U.S. parents accounted for 26 percent of the gross product of all private U.S. businesses in both 1989 and 1996 (table 7). Underlying this stability were offsetting changes in the U.S.-parent shares among industries: The U.S.-parent share in manufacturing edged down from 63 percent in 1989 to 61 percent in 1996; the share in services edged up from 6 percent to 8 percent; and the share in all other industries combined edged up from 16 percent to 18 percent./9/
Although the U.S.-parent share in manufacturing edged down, the relatively high share partly reflects the firm-specific advantages possessed by U.S. manufacturers that lead them to serve foreign markets primarily through direct investment rather than through international trade (see footnote 11).
Although the U.S.-parent share in services rose, the relatively low share reflects a variety of factors. U.S. direct investment in some service industries may be inhibited by the structure of those industries in some host countries. For example, U.S. direct investment in health care services is constrained or precluded in countries where the government plays a prominent role in the delivery of health care. In addition, some service industries that are characterized by small-scale production (such as dry cleaners and hair stylists) may lack the firm-specific advantages that often provide the basis for direct investment in other industries.
The output of U.S. parents (sales plus inventory change) consists of both the gross product that originates within the parents themselves and the gross product that originates elsewhere and that is incorporated in the intermediate inputs purchased by parents from foreign affiliates and from outside suppliers.
The origins of U.S.-parent output were essentially the same in 1996 as in 1989: The share of parent output originating in parents themselves was 33 percent in both years (table 8, column 11). Underlying this stability were mildly offsetting changes in the origin of output among industries. In manufacturing, the origin of U.S.-parent output shifted slightly away from internal production, as the share of U.S.-parent output that was accounted for by their gross product edged down from 38 percent to 35 percent; the shift was most pronounced for parents in industrial machinery, particularly in computers and components, and in electric equipment, particularly in consumer electronics. In wholesale trade, the origin of U.S.-parent output shifted slightly toward internal production; the share of U.S.-parent output that was accounted for by their gross product edged up from 10 percent to 12 percent.
The share of U.S. parents' output that was accounted for by local (U.S.) content—U.S.-parent gross product and purchases from U.S. suppliers—remained high, at 93 percent, in 1996, compared with 94 percent in 1989. Underlying this stability were offsetting changes in the local-content share among industries. In wholesale trade, the local-content share of the output of U.S. parents edged up from 85 percent to 88 percent; most of this change occurred between 1995 and 1996 and largely reflected the industry reclassifications previously noted. Conversely, in petroleum, the local-content share edged down from 92 percent to 90 percent. In manufacturing, the local-content share edged down from 93 percent to 91 percent; the decreases were most pronounced in industrial machinery, particularly in computers and components, and in electric equipment, particularly in consumer electronics.
Judging from the patterns of trade between U.S. parents and their MOFA's, the decrease in the local-content share in manufacturing reflected increased imports from both high-wage countries and low-wage countries./10/ Some of the largest increases in the imports from high-wage countries were the imports from Canadian and European affiliates that produce computers and components. Some of the largest increases in the imports from low-wage countries were the imports from affiliates in Singapore, Mexico, Malaysia, and Hong Kong that produce consumer electronics and computer components.
This section examines selected aspects of the foreign (foreign-affiliate) operations of U.S. MNC's. First, the 1995–96 change in employment by all affiliates is examined, and the patterns of newly acquired or established affiliates in 1996 are presented. The remainder of the section focuses on selected aspects of the operations of majority-owned foreign affiliates (MOFA's): The changes in the gross product of MOFA's by area, by industry, and by source of change; the MOFA share of host-country gross domestic product; the origin of MOFA output in 1989 and 1996; and the changes in the real gross product of MOFA's in manufacturing.
The broadest perspective on the foreign operations of U.S. MNC's is the perspective of all foreign affiliates. The examination of the operations of these affiliates uses data on employment because estimates of gross product are available only for MOFA's.
Changes in employment by area and by industry.—The total employment of nonbank foreign affiliates increased 4 percent to 7.6 million in 1996, compared with a 2-percent average annual increase in 1989–95 (table 9).
By area, most of the increase was accounted for by affiliates in Europe, in Latin America and Other Western Hemisphere, and in Asia and Pacific. By industry, most of the increase was accounted for by affiliates in manufacturing, in "other industries" (mainly communications), and in services.
Newly acquired or established affiliates.—In 1996, 406 affiliates with a combined employment of 150,000 were established or acquired by U.S. MNC's (table 10). In 1996, like in 1990–95 (the other years for which estimates are available), high-wage countries were the primary locations for new affiliates. Affiliates in high-wage countries accounted for 70 percent of all of these new affiliates and for 87 percent of their employment. This large share suggests that U.S. direct investment abroad tends to be attracted more by access to large and prosperous markets than by access to low-wage labor. The United Kingdom, Germany, and Australia were among the high-wage countries that attracted significant amounts of new investment in 1996.
Low-wage countries, though accounting for a relatively low share, have been attracting a rising proportion of the new investments. Their share of new investments rose steadily from 18 percent in 1989 to 30 percent in 1996. Brazil, Mexico, and Singapore were among the low-wage countries that attracted relatively large amounts of new investment in 1996.
Manufacturing continued to be the primary industry for new investments in 1996; it accounted for 36 percent of all new affiliates and for 39 percent of the employment of these affiliates. "Other industries" also accounted for some large new investments; for example, some U.S. providers of electric power and telecommunications services acquired foreign affiliates through host-country privatizations.
In 1996, majority-owned foreign affiliates (MOFA's) accounted for 89 percent of all foreign affiliates and for 81 percent of the employment of all affiliates. The MOFA share of affiliate employment has increased from 77 percent in 1989. (The employment of both majority-owned foreign affiliates and all affiliates for 1982–96 is shown in table 1.) These high percentages are consistent with the "internalization" theory of the origins of MNC's, which suggests that MNC's tend to have firm-specific advantages that must be preserved by strict control of operations./11/
In all but a few countries, well over half of all affiliates are majority owned. The following countries are among those that had a relatively low percentage of MOFA's in 1996: Saudi Arabia (50 percent), Israel (52 percent), and India (51 percent). In some of these countries, laws constrain, or have constrained, the level of foreign ownership of domestic businesses; these laws have limited the level of foreign ownership or have assessed lower taxes on, or provided other benefits to, businesses that have majority local ownership.
Changes in gross product.—The gross product of MOFA's increased 7 percent in 1996, the same as in 1989–95, to $498.4 billion (table 11). Increases were widespread by area, reflecting a variety of factors that affected MOFA's worldwide but that affected MOFA's in some areas more than those in others. Some contributing factors were continued economic growth in most major host countries, the acquisition and establishment of new affiliates (especially in Europe), and a 26-percent increase in crude oil prices in 1996 that raised gross product for MOFA's engaged in petroleum extraction (especially in Africa and the Middle East). By industry, affiliates in petroleum and manufacturing accounted for most of the increase in MOFA gross product.
Year-to-year changes in the MOFA gross product are the net result of changes in existing MOFA operations, new entrants into the MOFA universe (as new affiliates are acquired or established and as existing affiliates become majority owned), departures from the MOFA universe (as existing affiliates are sold to foreigners or are liquidated), and other changes. In 1996, most of the increase in MOFA gross product was attributable to changes in existing operations (table 12).
MOFA share of host-country GDP.—In 1996, the gross product of MOFA's accounted for 6 percent or more of the gross domestic product (GDP) of six of the host countries shown in table 13: Ireland (14 percent), Canada (9 percent), Singapore (8 percent), United Kingdom (7 percent), Costa Rica (7 percent), and Honduras (6 percent).
The relatively high MOFA shares of host-country GDP in Ireland, Canada, Singapore, and the United Kingdom can be traced to some of the following factors: (1) A common language with the United States, (2) marketing and commercial legal systems similar to those in the United States, (3) geographic proximity to the United States, (4) the availability of a skilled work force, (5) political stability, and (6) low corporate tax rates. The comparatively high MOFA shares of GDP in Costa Rica and Honduras partly reflect the important role of U.S.-owned agricultural production in those countries' small and relatively undiversified economies.
The MOFA share of host-country GDP was less than 1 percent in four of the host countries shown in table 13: India, China, the Republic of Korea, and Japan. The low shares in most of these countries probably reflect past or present barriers to investment, including limits on foreign ownership.
Origin of output.—The output of MOFA's (sales plus inventory change) consists of both the gross product that originates in the MOFA's themselves and the gross product that originates elsewhere and that is incorporated in intermediate inputs purchased by MOFA's from U.S. parents, other foreign affiliates, or from other suppliers.
From 1989 to 1996 the origins of MOFA output shifted to outside suppliers: The share of the output of MOFA's that originated within MOFA's themselves decreased from 31 percent in 1989 to 27 percent in 1996 (tables 14 and 15, column 12). This shift was widespread across industries (but was most pronounced in manufacturing) and across geographic areas.
The U.S. content of MOFA output was 10 percent in both 1989 and 1996. In Canada, the U.S. content of MOFA output increased from 22 percent in 1989 to 26 percent in 1996; this increase was widespread across manufacturing industries and may have been partly related to the initial implementation of the Canada-United States Free Trade Agreement in 1989 and the North American Free Trade Agreement in 1994. In Latin America and Other Western Hemisphere, the U.S. content of MOFA output rose from 13 percent to 16 percent; this change in U.S. content was substantially affected by currency-related valuation changes during this period./12/
Real gross product of MOFA's in manufacturing.—BEA recently introduced experimental estimates of real gross product for MOFA's in manufacturing./13/ These estimates provide more accurate comparisons of gross product across time and across countries than the current-dollar estimates, because they exclude the effects of prices and exchange rates. This section presents the preliminary estimates for 1996 and the revised estimates for 1995.
The real gross product of MOFA's in manufacturing grew twice as fast—5.3 percent—in 1996 as in 1989–95—2.5 percent (table 16). The rapid growth reflected continued economic growth in most host countries—particularly in some low- to middle-income countries, such as Mexico, Brazil, and China—and the addition of affiliates to the MOFA universe either because U.S. parents acquired or established these affiliates or because parents raised their equity stake in these affiliates to a level of majority ownership./14/
The real gross product of MOFA's in manufacturing grew substantially faster than total host-country production in 1996. Real gross product of MOFA's in manufacturing in 19 member countries of the Organisation for Economic Co-Operation and Development (OECD) grew 4 percent, on average, compared with a 1-percent increase in industrial production in these countries (chart 3)./15/ Affiliate growth was faster partly because of the addition of affiliates to the MOFA universe. Growth was particularly strong in Austria, Finland, New Zealand, and Norway.
Box: Data on U.S. Direct Investment Abroad
Footnotes:
1. The year 1989 is used for comparison because it was a benchmark survey year for U.S. direct investment abroad and because before 1994, gross product estimates (which are the basis for much of the analysis in this article) were only available for U.S. parents in the years covered by benchmark surveys. In addition, in 1989, like in 1996, economic growth continued in the United States and in most major host countries.
This article presents highlights from BEA's 1995 and 1996 annual surveys of U.S. direct investment abroad. More detailed estimates will be available later this year on BEA's Web site, on diskettes, and in publications (see the box "Data Availability" on page 51).
2. The average for major host countries is based on growth in the member countries of the Organisation for Economic Co-Operation and Development other than the United States and Japan. (In Japan, GDP measured in U.S. dollars fell 11 percent.) The 3-percent figure is a weighted average based on estimates denominated in current U.S. dollars and translated at current exchange rates. Underlying this average was significant variation across the individual countries.
3. The preliminary 1995 estimates were published in Raymond J. Mataloni, Jr., "U.S. Multinational Companies: Operations in 1995," SURVEY OF CURRENT BUSINESS 77 (October 1997): 44–68.
4. In most of this section, the examination of the foreign operations of U.S. MNC's uses the data for majority-owned foreign affiliates (MOFA's) rather than data for all foreign affiliates. The data for MOFA's are used because parents and MOFA's are conceptually under U.S. managerial control (other foreign affiliates may be under the control of foreign owners) and because, practically, the necessary data items for this analysis are collected only for MOFA's.
Although MOFA's and U.S. parents are under the control of one or more U.S. parents, the U.S. parent may be under the control of a foreign parent company; in 1996, U.S. parents that were ultimately controlled by foreign parents accounted for 12 percent of all U.S. parents and for 8 percent of their gross product.
5. In 1996, the weighted average U.S.-dollar price of the currencies of the top 25 host countries (in terms of MOFA gross product) fell 3 percent. This decline lowered the dollar value of MOFA gross product by a similar amount when the underlying survey data were translated from foreign currencies as is generally necessary. (The weighted average host-country price inflation was derived, in most cases, using the implicit price deflator for the gross domestic product of the countries; however, for a few countries for which the deflator was not available, the consumer price index was used.)
6. MNC-associated trade accounts for an even larger share of U.S. trade in goods when U.S. businesses owned by foreign MNC's are also included. In 1996, U.S. affiliates of foreign MNC's accounted for 22 percent of U.S. exports of goods and 32 percent of U.S. imports of goods. (As previously noted, these U.S.-affiliate shares overlap the U.S.-MNC shares because some U.S. parents belong to both groups; for these parents, part of their "trade with others" represents trade with their foreign parent groups. In 1996, trade between U.S. parents and their foreign parent groups accounted for 5 percent of U.S.-MNC-associated U.S. exports of goods and for 19 percent of U.S.-MNC-associated U.S. imports of goods.)
For the latest estimates of U.S. affiliates' trade, see Mahnaz Fahim-Nader and William J. Zeile, "Foreign Direct Investment in the United States: New Investment in 1997 and Affiliate Operations in 1996," SURVEY 78 (June 1998): 39–67.
7. In BEA's direct investment statistics, petroleum is presented as a major industry that consolidates all the activities associated with petroleum production, transportation, and distribution. Consequently, in this article, the data for these activities are excluded from the major industries in which they would usually be included. In particular, manufacturing excludes petroleum and coal products manufacturing, mining excludes oil and gas extraction, wholesale trade excludes petroleum wholesale trade, retail trade excludes gasoline service stations, and transportation excludes petroleum tanker operations, pipelines, and storage.
8. Each U.S. parent is classified in the industry that accounts for the largest portion of its sales or, for holding companies, its total income. Many U.S. parents are involved in a variety of business activities, and changes in the mix of these activities can cause a parent's industry classification to change.
9. At the all-industries level, the estimates of U.S.-parent gross product are generally conceptually consistent with the estimates of gross product for all U.S. businesses in the national income and product accounts. However, for individual industries, inconsistencies may result from differences in the basis for the industrial distribution of the estimates. The industrial distributions of gross product for all U.S. businesses are based on data collected from establishments, which are classified by the principal product or service produced at each establishment, whereas the industrial distributions of U.S.-parent gross product are based on data collected from enterprises, or companies, which are classified by the principal product or service produced by all of their establishments combined. Because the establishments of a large company may be classified in different industries, the distributions of data by industry of establishment can differ significantly from those by industry of enterprise. In this article, U.S.-parent gross product as a share of the gross product for all private U.S. businesses is computed only at the highly aggregated level shown in table 7.
10. Information on the countries of origin of goods imported by U.S. parents is available only for imports from MOFA's; these imports accounted for 44 percent of all goods imported by U.S. parents in 1996.
The distinction between high-wage countries and low-wage countries is based on estimates of average hourly wages of production workers of MOFA's in manufacturing; the estimates were derived from data collected in the 1994 Benchmark Survey of U.S. Direct Investment Abroad. In order to ensure the significance of the data underlying this distinction, the analysis is restricted to host countries in which employment by these MOFA's totaled at least 10,000 employees in 1994.
11. According to the theory, these firm-specific advantages, such as superior production or marketing techniques, are necessary in order for MNC's to overcome the various barriers to investing abroad, such as foreign languages and unfamiliar business environments.
For a discussion of the theory, see Stephen H. Hymer, The International Operations of National Firms (Cambridge, MA: MIT Press, 1976).
12. The dollar-denominated measures of the operations of affiliates in the two largest economies in the area—Mexico and Brazil—were affected by changes in the host-countries' currencies. Between 1989 and 1996, the Mexican peso lost over two-thirds of its value against the U.S. dollar, and Brazil introduced a new currency, the real. The effects of these changes cannot be precisely measured; however, a devaluation of host-country currency generally depresses the U.S.-dollar value of affiliate sales, but it has no direct effect on the dollar value of U.S. exports to affiliates, so that the U.S.-content share of affiliate output is raised.
13. See Raymond J. Mataloni, Jr., "Real Gross Product of U.S. Companies' Majority-Owned Foreign Affiliates in Manufacturing," SURVEY 77 (April 1997): 8–17.
14. The real gross product grew slightly faster (5 percent) than the current-dollar gross product (4 percent) in 1996. The slower growth in the current-dollar gross product reflected the dampening effect of the appreciation of the U.S. dollar.
15. The real gross product estimates are available, at the individual country level, only for the 19 OECD countries shown in table 16, and the estimates are available only for all manufacturing industries combined.
The concepts, coverage, and method of computation of industrial production indexes are similar to those of estimates of real gross product of MOFA's in manufacturing. However, the industrial production indexes include the mining, petroleum refining, and electric and gas utilities industries, and some countries' industrial production indexes are based on changes in the total output (sales plus inventory change) in specific industries rather than on the gross product originating in them. In addition, the industry-level changes are often aggregated using weights based on total output rather than on gross product.
