The production index and real net output, performance indicators for industrial branches, do not provide a realistic enough picture for an international comparison of the performance trends of an industry and its branches to be made. In its current weekly report 26/2002, the DIW Berlin suggests incorporating other information into such evaluations, like employment and investment trends.
The production index allows us to analyse current cyclical developments in the countries under examination, as information on real net output is not available for industrial branches at short notice. In the 1990s, a change took place not only in the division of work within the industrial sector, but also in that between the industrial and the service sector, at both national and international levels. This lead to an increase in both nominal and real intermediate input quotas. The DIW Berlin has found that between 1995 and 1999 the structural change that took place in some branches in Germany was of greater significance than that which occurred in France, Great Britain and Italy. When faced with such structural change, the production index is not sufficiently capable of representing the dynamism of branches for the purposes of an international comparison. The differing trends in real intermediate input quotas - which have been statistical proven - and diverging trends in real net output are the result of price adjustments in the countries and branches concerned. Real net output gives an distorted picture of the branch trends in the different countries. Compared to the other countries examined during the 1990s, the dynamism in German industry seems to be overvalued by the production index trend and undervalued by real net output.