4 ANNEXES
- high technology classification: chemicals
and chemical products; machinery and
equipment; transport equipment.
4.1.2 SHORT-TERM INDICATORS
The analysis in Section 3 was based on sectoral
gross value added figures at constant prices
available from Eurostat. Data is in general
available for the entire period 1980:Q1-
2001:Q4. Exceptions are the Netherlands
(1987:Q1-2001:Q4), Austria (1988:Q1-
2001:Q4) and Portugal (1995:Q1-2001:Q4).
Given the limited information available for
Portugal it has not been included in the
analysis, while the Netherlands and Austria
have only been included for the 1990s.
Moreover, data for Germany were extended
backwards, applying West German growth rates
before 1991; this has been usually accounted
for by presenting cross-country averages before
and after 1991.
Finally, no quarterly sectoral value added data
were available for Greece, Ireland and
Luxembourg. In order to separate finance and
insurance (ISIC Code 65-67) from real estate,
renting and business activities (ISIC Code 70-
74), the aggregate quarterly information
available from Eurostat was disaggregated
using annual value added at current prices
shares for the two sectors that were provided in
the annual database used for Section 2.
The analysis in Sub-section 3.2.2 of Section 3
was based on monthly industrial production
indicators available from Eurostat. Comparable
data on the two-digit level of ISIC-Revision 3 is
in general available for the entire period Jan
1990 - Dec 2001. Exceptions are the
Netherlands, for which sectors 32 (manufacture
of radio, television and communication
equipment and apparatus) and 33 (manufacture
of medical, precision and optical instruments,
watches and clocks) are missing, and Finland
for which sectors 16 (manufacture of tobacco
products) and 30 (manufacture of office
machinery and computers) are missing. Data for
Greece for sector 30 (manufacture of office
machinery and computers) were dropped as no
data for this sector was available before Jan
1995. Data for the remaining countries were
either not available for the entire period or too
many sectors were missing.
In order to be able to aggregate data from
individual manufacturing sectors into the four
manufacturing aggregates, the individual
industrial production series were converted into
sectoral value added at constant prices by
multiplying the indices with the value added at
base year (base year = 2000 for all series).
4.1.3 THE COMPUTATION OF REAL VALUE
INDICES
Throughout this report, real value added levels
were computed based on volume indices
calculated at 1995 prices. The three exceptions
are Luxembourg, Sweden and the United States
which, in the 1990s, switched from a “fixed
weight” Laspeyres index measure to a chain-
weighted index.
The main problem with calculating real value
added GDP using a particular base year is that
sectors exposed to rapidly declining relative
prices for their output (e.g. the IT-producing
sectors) are given a disproportionate weight in
total GDP. This is due to the well observed fact
that the quantities produced by these same
sectors also tend to grow at relatively faster
rates, so the further back the base year taken the
greater their weight in total GDP in the years
after the base year. Shifting the base year
forwards every few years to alleviate the
problem would still result in an underestimation
of the relative weight of these sectors in the
previous years.
Chained-weighted indices continually update
the prices used to calculate real value added by
equalising real and nominal value added at some
base year and then chaining this value forwards
and backwards using the growth rates of the
corresponding aggregate of real value added. In
the United States, chain-weighted growth rates
are calculated as the geometric average of the
ECB
Occasional Paper No. 19
July 2004