Page 182 - index

EXPLANATION OF TERMINOLOGY, CONTENT
AND METHODOLOGY OF SOME STATISTICAL INDICATORS
ON INDUSTRY, INVESTMENT AND CONSTRUCTION

INDUSTRY

Index of Industrial Production (IIP) is an indicator that evaluates the
growth rate of industrial production every month, quarter and year. The index is
calculated by the quantity of production, therefore it is also called “the index of
quantity of industrial production”. The IIP is an important indicator quickly
reflecting the situation of industrial production growth in general and the
growth rate of each commodity in particular; satisfying information needs of
State agencies, investors and other users.

IIP is calculated as the percentage of the quantity of industrial production
generated in the current and base periods.

The calculation of IIP begins with the calculation of production index of
commodity. From the production index of commodity, production indexes of
VSIC 4-digit classes, VSIC 2-digit divisions, VSIC 1-digit sectors and the
whole industry can be calculated and so can the IIP for a certain province or the
whole country.

Calculation process

Step 1: Calculating production index of an item

Formula:

q
i qn  1 n  100
q n 0

Where:

i qn: Production index of the item n (For example: electricity, coal, fabric,
cement, etc);

q n1: Quantity produced of item n in the reference period.

q n0: Quantity produced of item n in the base period.

182