Explanatory Notes — Integrating Trade Data with Manufacturing Data

One of the main reasons for compiling trade statistics by industry is that it allows the estimation of an apparent domestic market.

The Apparent Domestic Market is calculated by adding Manufacturing Shipments to Total Imports and subtracting Total Exports.

Apparent Domestic Market = Manufacturing Shipments + Total Imports - Total Exports

Caution should be exercised when interpreting statistics relating to apparent domestic market. The reason it is called apparent and not real domestic market is due to a number of factors which can distort the results. Some of the most important ones include:

• the inclusion of "freight costs" in the value of imports and exports
• Wholesalers' markup (i.e. establishments that export what they purchase from a manufacturer may markup the sale price of the exports) which inflates the value of imports and exports over the value reported in shipments
• time period adjustments or "calendarisation" (for example the exported good may have been manufactured in a different calendar period and may have been sitting in a warehouse in the interim). In other words, changes in inventories are not taken into consideration.
• undercoverage of shipment, imports or exports
• exports of goods produced by wholesaling establishments engaged in manufacturing (i.e. these establishments may not be surveyed if the dominant share of revenues are derived from wholesaling as opposed to manufacturing activities)
• possible classification differences or errors when data is compiled
• double processing of primary goods (e.g. by metal fabricators) which may affect the value of shipments

As a result, caution is recommended in the use of this information, given all the adjustments required to reconcile the two data sets.

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Excerpt from Statistics Canada's "Data Integration - International Trade and Manufacturing Shipments Commodity", Publication 65F0020XIE, June 2000

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"Although it is useful to integrate shipments and trade data, for reasons such as estimating the domestic market for a commodity, because the data are derived from different sources, they are not fully compatible. In some cases, the illogical situation of exports exceeding shipments is found. ....

In general, the adjustments and cautions described above can be made to account for the conceptual differences found in the collection of shipments and trade data, thereby increasing the reliability of integrating the two sets of data.

Therefore it is recommended that shipments and trade data can be integrated but the adjustments and cautions described above should be taken to ensure correct usage of the data".