Archive:Electrical machinery and optical equipment production statistics - NACE Rev. 1.1
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- Data from January 2009. Most recent data: Further Eurostat information, Main tables and Database.
This article introduces a set of statistical articles which analyse the structure, development and characteristics of the economic activities in the electrical machinery and optical equipment sector in the European Union (EU). According to the statistical classification of economic activities in the EU (NACE Rev 1.1), this sector covers NACE Subsection DL, which is divided into four NACE divisions, each of which is treated in more depth in a further article:
- the manufacture of computers and office machinery, corresponding to NACE Division 30;
- the manufacture of electrical machinery and equipment, corresponding to NACE Division 31;
- the manufacture of radio, television and communication equipment, corresponding to NACE Division 32;
- instrument engineering, corresponding to NACE Division 33, which includes the manufacture of medical, precision and optical equipment.
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Main statistical findings
Structural profile
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Among the structural business statistics sectors, electrical machinery and optical equipment manufacturing (NACE Subsection DL) was the third largest industrial activity in the EU-27 in 2006 in terms of its value added generated, only behind the manufacture of basic metals and fabricated metal products (see Metals and metal products statistics - NACE Rev. 1.1) and fuel processing and the manufacture of chemicals (see Rubber and plastics production statistics - NACE Rev. 1.1).
The 202.6 thousand enterprises active in the electrical machinery and optical equipment manufacturing sector in 2006 together employed 3.7 million persons across the EU-27; of these, the vast majority (95.0 %) were paid employees. The EU-27’s electrical machinery and optical equipment manufacturing sector generated EUR 202.9 billion of value added in 2006, contributing 3.6 % of the total value added that was generated within the non-financial business economy (NACE Sections C to I and K). This was considerably higher than the corresponding shares of this sector in the number of enterprises (1.1 %) or persons employed (2.8 %), suggesting that the electrical machinery and optical equipment manufacturing sector was characterised by relatively large enterprises that were more productive than the average.
Among the four NACE divisions that comprise the electrical machinery and optical equipment manufacturing sector, the largest in the EU-27 was the electrical machinery manufacturing (NACE Division 31) subsector, which accounted for two fifths (40.9 %) of sectoral value added in 2006; this subsector also had the highest share of turnover (39.7 %) and persons employed (46.6 %). Instrument engineering (NACE Division 33) was the next largest subsector (in value added terms), accounting for 29.6 % of the electrical machinery and optical equipment total, closely followed by radio, television and telecommunication equipment manufacturing (NACE Division 32), with a share that was a little over one quarter (25.6 %). A relatively high proportion of enterprises reported their principal activity concentrated within the instrument engineering subsector, as these accounted for 45.4 % of all enterprises within the EU-27’s electrical machinery and optical equipment manufacturing sector. In contrast, the radio, television and telecommunication equipment manufacturing subsector accounted for just 14.5 % of enterprises, suggesting that this activity was populated by considerably fewer, large enterprises. By far the smallest subsector, by any of these measures of size, was the manufacture of office machinery and computers (NACE Division 30), which contributed just 4.7 % of sectoral value added in 2006.
The electrical and optical equipment manufacturing sector was dominated by output from Germany, which provided one third (33.7 %) of the EU-27’s value added in 2006, some 2.8 times as high as the next largest contribution which was made by France (12.2 %). The United Kingdom and Italy were the only other countries to report double-digit shares (10.9 % and 10.2 % respectively) of EU-27 value added, with a considerable gap thereafter, as Ireland made the next largest contribution (4.1 %).
In relative terms, Finland, Hungary and Ireland were the most specialised Member States in this sector, as electrical machinery and optical equipment manufacturing provided between 9 % and 10 % of their non-financial business economy value added in 2006. Germany and Slovakia (both 5.9 % of non-financial business economy value added) were the next most specialised countries. At the other end of the range, Greece and Cyprus (2005) reported that electrical machinery and optical equipment manufacturing accounted for less than 1 % of their non-financial business economy value added or employment[1].
The map shows the regional specialisation of the electrical machinery and optical equipment manufacturing sector, which is largely concentrated within central and eastern Europe. The most specialised regions (at the level of detail shown in the map) were Zapadne Slovensko (Slovakia), Oberpfalz (Germany) and Közép-Dunántúl (Hungary), where at least one in every ten persons employed within the non-financial business economy worked in electrical machinery and optical equipment manufacturing. There were several regions in Germany that were relatively specialised in this activity, which was also the case in the Czech Republic, Hungary, Finland and Slovakia as well as Slovenia (which is considered as one region at the level of detail shown in the map).
Business investment decisions and consumer demand for electronic goods are highly influenced by broader developments in the business cycle, and production patterns for electronic machinery and optical equipment goods may therefore be expected to adapt to these changes more strongly and perhaps more quickly than is the case for many other manufactured goods. The development of the production index for EU-27 electrical machinery and optical equipment manufacturing followed, but magnified, the economic cycle for industrial (NACE Sections C to E) output between 1997 and 2007, with more rapid growth during the years to 2000, a bigger contraction through to 2003, and then a faster expansion in each subsequent year through to 2007. The average rate of growth for the EU-27 production index for electrical machinery and optical equipment manufacturing in the ten years to 2007 was, at 4.5 % per year, more than double the average for total industry (2.1 % per year). The growth in EU-27 output of electrical machinery and optical equipment was driven by radio, television and communication equipment manufacturing (up on average by 5.4 % per year between 1997 and 2007), while the relatively small activity of office machinery and computer manufacturing also recorded a relatively high growth rate (averaging 5.2 % per year). While these two activities recorded the highest rates of growth, they also displayed the greatest fluctuations in output over time – both in a positive and negative sense – suggesting that consumer expenditure on electronic items was more sensitive to the economic cycle than the investment behaviour of enterprises (as witnessed through the comparatively stable evolution of the index of production for electrical machinery and apparatus).
Domestic output prices for electrical machinery and optical equipment in the EU-27 followed a steady downward trend over the period from 1997 to 2005. Indeed, this was the only industrial activity (at the level of NACE subsections) where prices fell, on average, during the most recent decade for which information is available. However, in 2006 the output price of electrical machinery and optical equipment rose by 1.0 %, which was consolidated in 2007 by a further increase of 0.2 %.
There were three distinct developments in the employment index for electrical machinery and optical equipment manufacturing in the EU-27, largely reflecting the overall economic cycle. Between 1997 and 2001 there was some growth in employment levels, which contrasted with a broad decline in the wider industrial workforce. This was followed by a relatively steep decline in the number of persons employed in electrical machinery and optical equipment manufacturing during the period from 2001 to 2003, at a pace that outstripped the industrial average. From 2004 until 2007 the employment index for electrical machinery and optical equipment manufacturing outperformed that for total industry, with the number of persons employed rising by 0.4 % in 2006 and by a further 1.2 % in 2007.
Large enterprises (employing 250 or more persons) generated 61.9 % of the value added within the EU-27’s electrical machinery and optical equipment manufacturing sector in 2006, considerably more than their average contribution (42.1 %) across the whole of the non-financial business economy. The relative importance of medium-sized enterprises (employing between 50 and 249 persons), 19.9 % of sectoral value added, was also above the non-financial business economy average (17.8 % in 2005). The relative importance of micro enterprises (with fewer than ten persons employed) was particularly low within the electrical machinery and optical equipment sector, as these accounted for just 5.9 % of value added, compared with a non-financial business economy average of 21.0 % (2005).
This relatively important presence of large enterprises was apparent for three of the four NACE divisions that make up the electrical machinery and optical equipment sector, with large enterprises accounting for more three fifths of the EU-27’s value added in 2006. The only exception was instrument engineering, where large enterprises contributed 46.0 % of the total value added, which was still considerably more than the 24.0 % share of medium-sized enterprises, which were also relatively important within this subsector.
Employment characteristics
The gender profile of the EU-27’s electrical machinery and optical equipment workforce in 2007 was very similar to that for the whole of the non-financial business economy, with 65.0 % of workers in this sector male compared with an average of 64.9 %. Among the Member States, however, there were considerable differences, as less than half the electrical machinery and optical equipment workforce were male in Slovakia and the three Baltic Member States[2], while men accounted for upwards of 70 % of those employed in Cyprus (2006), Greece, the Netherlands, the United Kingdom and Austria.
The age profile of the electrical machinery and optical equipment workforce in 2007 also resembled closely that of the non-financial business economy as a whole, with persons aged less than 30 accounting for 23.1 % of those employed in the EU-27 (compared with a non-financial business economy average of 24.3 %). The proportion of those aged 50 or more (20.2 %) was also slightly lower in the electrical machinery and optical equipment sector than across the non-financial business economy (21.9%). As a result, some 56.3 % of those employed in this sector were aged 30 to 49 (2.6 percentage points higher than the non-financial business economy average). Among the Member States, a majority (54.9 %) of those employed in the Maltese electrical machinery and optical equipment sector in 2007 were aged less than 30, while this age group also accounted for a relatively high proportion of the workforce in a number of central and eastern European Member States, principally Slovakia (37.7 %), Poland (34.3 %) and Hungary (31.7 %). In each of these countries the proportion of persons aged less than 30 working in the electrical machinery and optical equipment sector was at least 6 percentage points higher than the corresponding share of this age group within the whole of the non-financial business economy, a pattern that was also repeated in the Czech Republic, Estonia and Romania.
While the gender and age breakdowns of the EU-27’s electrical machinery and optical equipment workforce were generally in line with those of the non-financial business economy, the prevalence of part-time employment in the electrical machinery and optical equipment sector (6.7 % of those employed in 2007) was much lower than the corresponding average for the non-financial business economy (14.3 %), and was also somewhat lower than the industrial average (7.3 %). The high prevalence of full-time employment was particularly evident in the central and eastern Europe and despite part-time work being generally less common in many of these countries (in terms of its importance within the whole of the non-financial business economy), the proportion of persons working part-time in the electrical machinery and optical equipment sector was even less common, and the incidence of full-time employment reached or exceeded 97.5 % in 11 of the 27 Member States.
Expenditure, productivity and profitability
The level of gross investment in tangible goods within the EU-27’s electrical machinery and optical equipment sector was EUR 20.5 billion in 2006. This was equivalent to 2.0 % of non-financial business economy total, and resulted in an investment rate (gross tangible investment as a percentage of value added) of 10.1 %, which was considerably lower than the non-financial business economy average (18.4 %).
Across the four NACE divisions that make up the EU-27’s electrical machinery and optical equipment sector only the manufacture of radio, television and communication equipment recorded an investment rate (15.1 %) above the sectoral average in 2006, with rates falling below 8 % for both the manufacture of office machinery and computers and instrument engineering.
The electrical machinery and optical equipment sector reported a slightly higher than average share of personnel costs in total operating expenditure: some 20.6 % for the EU-27 in 2006, higher than the 16.1 % share of personnel costs in operating expenditure within the whole of the EU-27’s non-financial business economy. Within the manufacture of instrument engineering, the relative importance of labour as an input in the manufacturing process rose considerably, such that personnel costs accounted for 30.8 % of operating expenditure.
Average personnel costs for the EU-27’s electrical machinery and optical equipment sector were EUR 38.7 thousand per employee in 2006 and apparent labour productivity was EUR 55.3 thousand per person employed. Average personnel costs were 34.4 % higher than the non-financial business economy average, while the corresponding ratio for apparent labour productivity showed a difference of 27.1 % in favour of the electrical machinery and optical equipment sector.
These differences feed through into the wage-adjusted labour productivity ratio, which stood at 142.8 % for the EU-27’s electrical machinery and optical equipment sector in 2006, compared with a non-financial business economy average of 151.1 %. The only one of the four NACE divisions included within the electrical machinery and optical equipment sector to report a wage-adjusted labour productivity ratio above the non-financial business economy average was the manufacture of office machinery and computers (153.0 % in 2005 compared with a non-financial business economy average of 146.5 % for the same year).
Among the Member States[3], the apparent labour productivity of those employed within the electrical machinery and optical equipment sector rose well above the national non-financial business economy average in Finland and Ireland (by 88.4 % and 79.7 % respectively), while average personnel costs were relatively high in Portugal (59.7 % more than the non-financial business economy average) and Germany (45.3 % higher). A similar analysis shows that Finland (38.6 %), Hungary (37.6 %), Greece (24.3 %) and Sweden (21.5 %) were the only Member States (no information for Ireland) where the wage-adjusted labour productivity ratio for electrical machinery and optical equipment was significantly higher than the non-financial business economy average. In most of the Member States the opposite was true, with Germany, Luxembourg and the Baltic Member States reporting wage-adjusted labour productivity ratios that were around 14-20 % lower than their national non-financial business economy averages.
Profitability for the EU-27’s electrical machinery and optical equipment sector, as measured by the ratio of the gross operating surplus to turnover, was 9.6 % in 2006, slightly below the non-financial business economy average of 10.8 %. Among the four NACE divisions covered within the electrical machinery and optical equipment sector, the lowest gross operating rate was recorded for the manufacture of office machinery and computers (5.9 %), with only instrument engineering reporting a rate above the sectoral average (12.8 % in 2005).
External trade
Among the Member States, Germany recorded the largest trade surplus (EUR 20.0 billion) in electrical and optical equipment in 2007, followed by Ireland (EUR 8.9 billion); only eight of the Member States exported more electrical and optical goods than they imported in 2007. The largest deficits were recorded by the United Kingdom (EUR 28.2 billion), Spain (EUR 22.3 billion) and France (EUR 12.3 billion). In relative terms, electrical and optical equipment exports and imports often accounted for a considerable share of total industrial exports and imports. In 2007, these goods accounted for more than half (57.9 %) of all Maltese industrial exports, for more than a third of industrial exports from Luxembourg and Hungary, and for around a quarter of the total from the Czech Republic, Ireland, the Netherlands and Finland.
The EU-27 imported electrical and optical equipment (CPA Subsection DL) to the value of EUR 267.8 billion in 2007, which represented 20.1 % of all industrial (CPA Sections C to E) imports. These imports of electrical and optical equipment from non-member countries accounted for 42.5 % of the total (intra- and extra-EU) trade of these products by EU-27 Member States in 2007, some 6.9 percentage points higher than the industrial average (35.7 %). Exports of electrical and optical equipment to non-member countries were valued at EUR 200.0 billion in 2007 (17.2 % of all industrial exports), resulting in a trade deficit of EUR 67.8 billion. The overall EU-27 trade deficit could be attributed to considerable imports of office machinery and computers (CPA Division 30) and radio, television and communication equipment (CPA Division 32), which led to deficits of EUR 45.1 billion and EUR 44.3 billion respectively for these products in 2007. In contrast, the EU-27 ran a trade surplus for electrical machinery and apparatus (EUR 14.3 billion, CPA Division 31) and for instrument engineering (EUR 7.3 billion, CPA Division 33).
By far the largest share of EU-27 imports of electrical and optical equipment from non-member countries originated from China (34.2 % in 2007). This share was more than double that of the second most important trade partner, the United States (16.1 %), while south-east Asian economies accounted for the vast majority of the remaining imports. The importance of Chinese imports was particularly concentrated with respect to office machinery and computers, where China accounted for almost half (48.0 %) of the imports from non-member countries. Instrument engineering was the only one of the four CPA divisions covered within the electrical machinery and optical equipment sector where China (12.6 %) did not account for the largest proportion of EU-27 imports, as both the United States (36.7 %) and Switzerland (17.3 %) recorded higher shares. The largest single export market for EU-27 electrical and optical equipment in 2007 was the United States (18.9 %); the Russian Federation, China and Switzerland each accounted for between 7.5 % and 6.0 % of the EU-27’s exports.
Data sources and availability
The main part of the analysis in this article is derived from structural business statistics (SBS), including core, business statistics which are disseminated regularly, as well as information compiled on a multi-yearly basis, and the latest results from development projects.
Other data sources include short-term statistics (STS) and the COMEXT database for external trade.
Context
The electrical machinery and optical equipment sector is an important and strategic part of Europe’s manufacturing sector, producing a wide range of mostly high-technology products (for example, computers, switchgears or semi-conductors). This sector has been cited as being at the centre of industrial development, as almost every other sector depends, at least to some degree, on the capital equipment, technology, end-products, research and innovations that are provided by the electrical machinery and optical equipment sector. It is therefore often referred to as one of the main drivers of productivity gains and central to the EU’s objective of creating more and better jobs.
The goods and services made within the electrical machinery and optical equipment sector range from capital goods used in energy and primary transformation activities, transport manufacturing (motor vehicles, aeronautics and rail equipment producers) or process manufacturing sectors (agro-industries, chemicals, plastics or wood), through intermediate goods (such as electronic components or wiring) that are often used by other manufacturers, to consumer goods (such as consumer electronics, mobile phones and household appliances).
This sector operates within a long-established legislative framework that covers issues such as product safety, energy labelling, minimum efficiency requirements, eco-design and waste.
Two Directives (2008/34 and 2008/35)on waste electrical and electronic equipment (WEEE) and the restriction of the use of certain hazardous substances in electrical and electronic equipment were introduced in 2008. The EU aims to take measures to prevent the generation of electrical and electronic waste and to promote reuse, recycling and other forms of recovery in order to reduce the quantity of such waste by encouraging manufacturers to design products with the environmental impacts in mind throughout their entire life cycle.
The potential role that may be played by the electrical machinery and optical equipment sector with respect to energy efficiency has also been highlighted in recent years. Indeed, considerable effort has gone into reducing the energy consumption of appliances, although changes in lifestyle and working practices have sometimes offset these, for example, while changes to the manufacture of domestic and office appliances has made these more energy efficient, rising equipment rates and the introduction of new technologies may result in higher overall energy consumption. Several directives cover this area of energy saving, in particular a Directive on eco-design requirements for energy-using products, a Directive on the energy labelling of domestic appliances and a Regulation on the energy efficiency labelling programme for office equipment.
Further Eurostat information
Publications
Main tables
Database
Dedicated section
Further information
- Directive 2008/34 of 11 March 2008 amending Directive 2002/96 on waste electrical and electronic equipment (WEEE), as regards the implementing powers conferred on the Commission
- Directive 2008/35 of 11 March 2008 amending Directive 2002/95 on the restriction of the use of certain hazardous substances in electrical and electronic equipment as regards the implementing powers conferred on the Commission