When the provisional result for the industrial production index was released for reference month May 2022 on 7 July 2022, a change of method took effect in the calculation of the production index for the "Manufacture of motor vehicles", class 29.10 of the German Classification of Economic Activities (WZ). The reason is that the production of motor vehicles powered wholly or partly by electricity has become much more important in Germany and could not be adequately represented with the statistical calculation method used for that industry.
The production index is based on the development of the price-adjusted output obtained monthly from industrial businesses as part of official production statistics. The output comprises the value of the products that were produced by a specific industrial business in the respective month. Output data are collected by type of good.
To calculate the industrial production index, outputs of individual types of goods are aggregated into segments. For WZ class 29.10 "Manufacture of motor vehicles", such segments are "passenger cars with a diesel engine" or "passenger cars with an electric motor", for instance. The production index had been calculated as a weighted average of the production development measured for the individual segments of WZ class 29.10. The weights reflected the relative output produced in each segment in base year 2015.
Basically, weights are intended to eliminate the impact of structural shifts between segments in the production index and show the economic development more clearly. When there are massive structural changes within an industry as is presently the case in motor vehicle production, weighting may however lead to distortions. In base year 2015, the production of motor vehicles powered wholly or partly by electricity was very low and they were therefore included in the calculation with a very small weight. The fact that the production of electric cars had meanwhile become much more important was not sufficiently accounted for in the production index due to the small weight assigned.
For WZ class 29.10 "Manufacture of motor vehicles", the production index will from now on be calculated from the total of all outputs of that industry and the development will then be adjusted for price fluctuations. Weights that reflect the outputs of base year 2015 will not be used anymore. Now that the calculation method has been changed, the production of motor vehicles powered wholly or partly by electricity can be adequately considered.
The change of calculation method includes a revision of the industrial production index results for WZ class 29.10 back to January 2015. This also holds for all higher-level aggregates of the industrial production index which contain WZ class 29.10 data. All other industries and aggregates will be revised back only to January 2021 on 7 July 2022 as part of the regular annual revision carried out simultaneously. The annual revision will account for late reports of the industrial businesses included in the survey.
Together with the annual revision, the changed calculation method used for WZ class 29.10 leads to an increase in the average year-on-year change rate of the production index for WZ class 29.10 of 5.4 percentage points from 2019 after revision. For industry as a whole, the year-on-year change rate of the production index is 0.4 percentage points higher from 2019 after revision.