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TECHNICAL NOTE 2 DATA RELIABILITY


ABS SURVEY DATA

1 For 2005-06, the manufacturing collection was, in part, a sample survey designed primarily to deliver national estimates at the industry class level. Industry subdivision estimates for states and territories are also produced for key data items, but the survey was not specifically designed for these purposes.

SAMPLING ERROR

2 The majority of data contained in this publication have been obtained from a sample of manufacturing businesses. As such, these data are subject to sampling variability; that is, they may differ from the figures that would have been produced if the data had been obtained from all manufacturing businesses in the population. The measure of the likely difference as used by the ABS is given by the standard error, which indicates the extent to which an estimate might have varied by chance because the data were obtained from only a sample of units. 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 the data had been obtained from all units, and about 19 chances in 20 that the difference will be less than two standard errors.

3 The standard error can also be expressed as a percentage of the estimate, and this is known as the relative standard error (RSE).

4 RSEs for the national estimates of employment, wages and salaries, sales and service income, and IVA contained in this publication are mainly 2% or less for industry subdivisions and most are 5% or less for industry classes. The relative standard errors for the selected estimates for the states and territories are mainly 3% or less for employment and 1% or less for sales and service income at the total manufacturing level.

5 Relative standard errors at the industry subdivision level for Australia for selected data items representing the full range of data contained in this publication are shown below. Detailed relative standard errors can be made available on request.

6 To illustrate the above, the estimate of sales and service income for total manufacturing in 2005-06 was $357,462m. The RSE of this estimate is shown as 0.2%, giving a standard error of approximately $715m (rounded). This implies that there are two chances in three that, if all units had been included in the survey, an estimate in the range of $356,747m to $358,177m would have been obtained. Similarly, it implies that there are 19 chances in 20 (i.e., a confidence interval of 95%) that the estimate would have been within the range of $356,032m to $358,892m.

Relative standard errors
INDUSTRY SUBDIVISION		Employment at end of June(a)	Wages and salaries(b)	Sales and service income(c)	Purchases of goods and materials(d)	Industry value added	Capital expenditure on plant machinery and equipment
ANZSIC code	Description	%	%	%	%	%	%
21	Food, beverage and tobacco mfg	0.9	0.6	0.6	0.8	0.7	2.2
22	Textile, clothing, footwear and leather mfg	2.0	1.6	0.7	1.3	2.0	7.9
23	Wood and paper product mfg	1.6	1.2	0.5	0.7	1.0	2.5
24	Printing, publishing and recorded media	1.7	1.1	0.9	1.8	1.0	5.9
25	Petroleum, coal, chemical and associated product mfg	1.1	0.8	0.3	0.3	0.6	1.7
26	Non-metallic mineral product mfg	1.7	1.1	0.7	1.2	0.9	2.4
27	Metal product mfg	1.7	2.1	0.6	0.6	1.4	3.4
28	Machinery and equipment mfg	1.4	1.0	0.6	0.8	0.8	1.7
29	Other manufacturing	2.7	2.3	1.7	2.3	1.9	11.8
21-29	Total manufacturing	0.6	0.5	0.2	0.3	0.4	1.1
(a) Includes working proprietors.
(b) Excludes the drawings of working proprietors.
(c) Includes rent, leasing and hiring
(d) Includes capitalised purchases of materials.

7 The size of the RSE may be a misleading indicator of the reliability of some of the estimates for trading profit, OPBT, EBITDA and IVA. This situation may occur where an estimate may legitimately include positive and negative values, reflecting the financial performance of individual businesses. In these cases, the aggregated estimate can be small relative to the contribution of individual businesses resulting in a standard error which is large relative to the estimate.

NON-SAMPLING ERROR

8 All data presented in this publication are subject to non-sample error.

9 The imprecision due to sampling variability, which is measured by the standard error, should not be confused with inaccuracies that may occur because of inadequacies in available sources from which the population frame was compiled, imperfections in reporting by providers, errors made in collection such as in recording and coding data, and errors made in processing data. Inaccuracies of this kind are referred to collectively as non-sampling error and they may occur in any enumeration, whether a full census or a sample.

10 For the purpose of compiling the estimates in this publication, businesses in the ATO maintained population (see Technical Note 1) are coded to ANZSIC industry classes on the basis of the activity reported to the ATO when they registered for an ABN. There are a number of reasons why a business classified to any given ANZSIC industry on the ABS Business Register may not have been mainly engaged in activities associated with that industry during the 2005-06 reference year. This may be because of inaccurate or incomplete information at the time the business was registered or it may be because the business has changed activity, either temporarily or permanently.

11 Although it is not possible to quantify non-sampling error, every effort is made to reduce it to a minimum. Collection forms are designed to be easy to complete and assist businesses to report accurately. Efficient and effective operating procedures and systems are used to compile the statistics. The ABS compares data from different ABS (and non-ABS) sources relating to the one industry, to ensure consistency and coherence.