European Union, member states and Agencies

[Ananda]

Beware of lists like that. You don't know where the figures come from, & sometimes they may not mean what they seem to.

The graphic that I shown calculate the output of the factory. It is not GDP or GNI calculation. That's why I put the factory output within each country own border. Granted any factory can have materials from import suppliers, but the production is being done on that factory.

The manufacturing data shown real manufacturing that happen in each countries, base on real manufacturing output (through the door output). Whether the output going to domestic or export market, both calculate. It is not talking whose own the factory (could be local or foreign investors), but the location of the factory and real manufacturing activities.

The data from World Bank, and the site only compile it to make better presentation. However WB data overall shown that tendencies of increase shifting manufacturing production to Global South.

 

[swerve]

The graphic that I shown calculate the output of the factory. It is not GDP or GNI calculation. That's why I put the factory output within each country own border. Granted any factory can have materials from import suppliers, but the production is being done on that factory.

The manufacturing data shown real manufacturing that happen in each countries, base on real manufacturing output (through the door output). Whether the output going to domestic or export market, both calculate. It is not talking whose own the factory (could be local or foreign investors), but the location of the factory and real manufacturing activities.

The data from World Bank,

Then it's wrongly quoted. The World Bank says that Irish manufacturing value added in 2024 was $157 bn, but that's on the same basis as the GDP being almost $600 billion. The World Bank also said it was $204 billion in 2022 - not 2024 - but there hasn't been a crash in the output of factories in Ireland. It's due to changes in allocation of incomes of companies. World Bank Open Data

It's an illustration of the problem I described. For example, according to the World Bank, manufacturing production in Ireland was $52.1 billion in 2014 & $105.4 billion in 2015. In reality, most of that increase was caused by a change in Apple's accounting. See Absolutely Fascinating - Apple's EU Tax Bill Explains Ireland's 26% GDP Rise

Divide those World Bank figures by manufacturing employment. Are Irish workers really over four times as productive per head as Germans? More than three times as productive as Swedes? Or Swiss? Well over twice as productive as any other country? No, they're not. Nor did their productivity double in 2015, or drop by 25% in 2023. The difference is in the flows of profits in big multinational companies, e.g. in pharmaceuticals, which operate in Switzerland. Profits are counted as valued added, & thus output.

 

[Ananda]

Through the door manufacturing data is calculating real factory output calculation. Case of Ireland accounting trick by Apple that you put, does not mean the method of through the door manufacturing calculation data is wrong for most of other nations. The data calculate real production output that come out from each factory on each border.

Basically it is data to calculate each production supply chain produce. Yes it does not differentiate it the produce is only final assembly or from end to end cycle. Just shown what each factory output that being calculate.

Isolated incidents due tax circumstances will always happened. However the fast majorities of Nation calculate the actual industrial output base on the location of the factory and not ownership. Thus the method use by World Bank on manufacturing output still valid for most of the world.

 

[swerve]

So where are these through the door World Bank statistics? Please provide a link. All the World Bank manufacturing stats I can find relate to value added, not counting what goes through the door, & are calculated on the same basis as GDP. And despite that, the figures for Ireland are LOWER than those in that graphic. Those figures can't be "through the door", or it'd be the other way round.

I said in my first post on this topic that it's not a major issue for bigger economies. Switzerland's probably the biggest one that's significantly distorted upwards. But such numbers appearing in a list which purports to be "through the door" manufacturing output demonstrates the truth of my warnng that statistics on such things should be viewed with care. If they get that one so obviously wrong, how can one take all the others at face value?

I saw a discussion about why health spending in Wales is over twice as much per head as in England recently. I checked, & found the reason was a misprint in the figure for Wales. The real difference is fairly small. But people were taking the number seriously!

It's always best to be suspicious. If something looks wrong, it could be because it is wrong, & a source which has one wrong number could have others.

 

[Ananda]

World Bank Open Data

Free and open access to global development data

data.worldbank.org

What do you mean through the door link ? Manufacturing value added is definition of through the door calculation. It is the essence of calculating manufacturing value after goes through the door of factory, from materials that enter the factory to what products value left the factory.

Again cases of calculation due to taxes need sometimes happen, but for most part the data that WB collected from each country, calculate the calculation of through the door of each their factory. That's why financial institutions for most part still hold WB data as one of sources in calculating industrial activities of each countries they are operating with.

 

[swerve]

Please, just look at the numbers. Do you think that Ireland's "through the door" factory output really doubled in 2015? Or fell by 25% in 2023?

These are artefacts of changing cost & income allocation by multinational companies. Look at the lower of these two definitions. Can't you see how the lower calculation could be affected by that? Note that in 2015, Gross Operating Surplus for the total Irish economy (not just manufacturing) went up by about 70%. Most of that was in manufacturing. Similarly, it slumped in 2023. That wasn't from changes in physical output, but changes in the income received for that output - changes in the allocation of income within multinational companies, not in the income those companies received from outside.

"Gross Value Added can be calculated in two ways. First, as we said, by subtraction like this:

• Total Output (similar to turnover)
• Minus total Intermediate Consumption (cost of goods and services).

Gross Value Added can also be calculated by addition like this:

• Gross Operating Surplus and Gross Mixed Income (like profit)
• Plus Compensation of Employees (like wages and salaries)."

From Gross Value Added - CSO - Central Statistics Office

We're agreed that these figures are not subject to significant distortion for most countries, so let's leave it at that. But please stop saying that figures which say that Ireland's factories produce more than Canada's, or twice as much as Sweden's, are an accurate measure of what comes out of those factories. A good enough measure of the difference between Canada & Sweden I won't argue with.

 

[Ananda]

We're agreed that these figures are not subject to significant distortion for most countries, so let's leave it at that. But please stop saying that figures which say that Ireland's factories produce more than Canada's, or twice as much as Sweden's, are an accurate measure of what comes out of those factories. A good enough measure of the difference between Canada & Sweden I won't argue with.

Then we agree that WB data on calculating Manufacturing output for most of other countries is acceptable. Transfer pricing is common practices among Multi Nationals especially from Euro and North America. It is common to see their subsidiaries book only breakeven sometimes red for years, but their regional and HQ have solid margins.

Isolated situation like Ireland or some extent Switzerland do happen. I also already mention due to preferential tax calculation on some nations that become haven for Multinationals regional and HQ locations. Still it is isolated and the WB or IMF method on calculating manufacturing production for most global nations still accurate base line.