Wholesale Trade Survey (Monthly) (MWTS)

Wholesale Trade Survey (Monthly) (MWTS)
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Detailed information for September 2004

Status:

Active

Frequency:

Monthly

Record number:

2401

This survey provides information on the performance of the wholesale trade sector and when combined with other statistics, represents an important indicator of the Canadian economy.

Data release - November 19, 2004

Description

This survey provides information on the performance of the wholesale trade sector and is an important indicator of the health of the Canadian economy. In addition, the business community uses the data to analyse market performance.

This survey presents estimates of monthly sales and inventory levels for wholesale merchants in Canada, each province and territory.

A variety of organizations, sector associations, and levels of government make use of the information. Governments are able to understand the role of wholesalers in the economy (5-6% of the Gross Domestic Product, depending on the year), which aid in the development of policies and tax incentives.

Reference period: month

Collection period: Collection of the data begins approximately 7 working days after the end of the reference month and continues for the duration of that month.

Subjects

  • Retail and wholesale
  • Wholesale sales and inventories

Data sources and methodology

Target population

The target population for the Monthly Wholesale Trade Survey (MWTS) consists of all statistical establishments on the Business Register (BR) that are classified to the wholesale sector using the North American Industry Classification System (NAICS 2002). The NAICS code range for the wholesale sector is 410000 to 419999.

The exclusions to the target population are ancillary establishments (producers of services in support of the activity of producing goods and services for the market of more than one establishment within the enterprise, and serves as a cost centre or a discretionary expense centre for which data on all its costs including labour and depreciation can be reported by the business), future establishments, establishments for which economic signals indicate a null or missing revenue, and establishments in the following non-covered NAICS:
- 41112 (oilseed and grain)
- 412 (petroleum products)
- 419 (agents and brokers)

Data for wholesale trade are presented based on the trade group variant of NAICS.

Instrument design

The questionnaire collects monthly data on wholesale sales and the number of trading locations by province or territory and inventories of goods owned and intended for resale from a sample of wholesalers. For the 2004 redesign, most questionnaires were subject to cosmetic changes only, with the exception of the inclusion of Nunavut. The modifications were discussed with stakeholders and the respondents were given an opportunity to comment before the new questionnaire was finalized. If further changes are needed to any of the questionnaires, proposed changes would go through a review committee and a field test with respondents and data users to ensure its relevancy.

Sampling

This is a sample survey with a cross-sectional design.

The MWTS sample consists of 8,000 groups of establishments (clusters) classified to the Wholesale Trade sector selected from the Statistics Canada Business Register. A cluster of establishments is defined as all establishments belonging to a statistical enterprise that are in the same industrial group and geographical region. The MWTS uses a stratified design with simple random sample selection in each stratum. The stratification is done by trade groups using the NAICS-four digit level, and the geographical regions consisting of the provinces and territories. We further stratify the population by size. The size measure is created using a combination of independent survey data and three administrative variables: the GBI (Gross Business Income), the GST sales, and the T2-revenue (from corporation tax return).

The size strata consist of one take-all (census), at most two take-some (partially sampled) strata, and one take-none (none sampled) stratum. Take-none strata serve to reduce respondent burden by excluding the smaller businesses from the surveyed population. These businesses should represent at most five percent of total sales. Instead of sending questionnaires to these businesses, the estimates are produced through the use of administrative data.

The sample was allocated optimally in order to reach target coefficients of variation at the national, provincial/territorial, industrial, and trade group by province/territory levels. The sample was also inflated to compensate for dead, non-responding, and misclassified units.

MWTS is a repeated survey with maximization of monthly sample overlap. The sample is kept month after month and every month births are added to the sample and dead units are identified. MWTS births, i.e., new clusters of establishment(s), are identified every month via the BR's latest universe. They are stratified according to the same criteria as the initial population. A sample of these births is selected according to the sampling fraction of the stratum to which they belong and is added to the monthly sample. Deaths also occur on a monthly basis. A death can be a cluster of establishment(s) that have ceased their activities (out-of-business) or whose major activities are no longer in wholesale trade (out-of-scope). The status of these businesses is updated on the BR using administrative sources and survey feedback, including feedback from the MWTS. Methods to treat dead units and misclassified units are part of the sample and population update procedures.

Data sources

Responding to this survey is mandatory.

Data are collected directly from survey respondents and extracted from administrative files.

Collection of the data is performed by Statistics Canada's Regional Offices. Respondents are sent a questionnaire or are contacted by telephone to obtain their sales and inventory values, as well as to confirm the opening or closing of business trading locations. There is also follow-up of non-response. Collection of the data begins approximately 7 working days after the end of the reference month and continues for the duration of that month.

New entrants to the survey are introduced to the survey via an introductory letter that informs the respondent that a representative of Statistics Canada will be calling. This call is to introduce the respondent to the survey, confirm the respondent's business activity, establish and begin data collection, as well as to answer any questions that the respondent may have.

Significant effort is spent trying to minimize non-response during collection. Methods used, among others, are interviewer techniques such as probing and persuasion, repeated re-scheduling and call-backs to obtain the information, and procedures dealing with how to handle non-compliant (refusal) respondents.

If data are unavailable at the time of collection, a respondent's best estimates are also accepted, and are subsequently revised once the actual data become available.

To minimize total non-response for all variables, partial responses are accepted. In addition, questionnaires are customized for the collection of certain variables, such as inventory, so that collection is timed for those months when the data are available.

Finally, to build trust and rapport between the interviewers and respondents, cases are generally assigned to the same interviewer each month. This action establishes a personal relationship between interviewer and respondent, and builds respondent trust.

Use of Administrative Data

Managing response burden is an ongoing challenge for Statistics Canada. In an attempt to alleviate response burden and survey costs, especially for smaller businesses, Statistics Canada has been investigating various alternatives to survey taking. Administrative data files are a rich source of information for business data and Statistics Canada is working at bringing this rich data source to its full potential. As such, effective the October 2005 reference month, the MWTS has reduced the number of simple establishments in the sample that are surveyed directly and instead derives sales data for these establishments from Goods and Service Tax (GST) files using a statistical model. The model accounts for differences between sales and revenue (reported for GST purposes) as well as for the time lag between the survey reference period and the reference period of the GST file.

Inventories for establishments where sales are GST-based are derived using the MWTS imputation system. The imputation system applies to the previous month values, the month-to-month and year-to-year changes in similar establishments which are surveyed.

For more information on the methodology used for modeling sales from administrative data sources, refer to 'Monthly Wholesale Survey: Use of Administrative Data'.

View the Questionnaire(s) and reporting guide(s).

Error detection

Data editing is the application of checks to detect missing, invalid or inconsistent entries or to point to data records that are potentially in error. In the survey process for the MWTS, data editing is done at two different time periods.

First of all, editing is done during data collection. Edits during data collection are referred to as field edits and generally consist of validity and some simple consistency edits.

Follow-up with respondents occurs to validate potential erroneous data following any failed preliminary edit check of the data. Once validated, the collected data are regularly transmitted to the head office in Ottawa.

Secondly, editing known as statistical editing is also done after data collection. Statistical editing is run prior to imputation in order to identify the data that will be used as a basis to impute non-respondents. Large outliers that could disrupt a monthly trend are excluded from the imputation stage through these statistical edits. It should be noted that adjustments are not made at this stage to correct the reported outliers.

Edits checks are based on the Hidiroglou-Berthelot method whereby a ratio of the respondent's current month data over historical (i.e. last month, or same month last year) or administrative data is analyzed. When the respondent's ratio differs significantly from ratios of respondents who are similar in terms of industrial group and/or geography group, the response is deemed an outlier. Data that are flagged as an outlier will not be included in the imputation models (those based on ratios).

Modeled data based on the GST are also subject to an extensive series of processing steps which thoroughly verify each record that is the basis for the model as well as the record being modeled. Edits are performed at a more aggregate level (industry by geography level) to detect records which deviate from the expected range, either by exhibiting large month-to-month change, or differing significantly from the remaining units. All data which fail these edits are subject to manual inspection and possible corrective action.

Imputation

Imputation in the MWTS is the process used to assign replacement values for missing data. This is done by assigning values when they are missing on the record being edited to ensure that estimates are of high quality and that a plausible, internal consistency is created. Due to concerns of response burden, cost and timeliness, it is generally impossible to do all follow-ups with the respondents in order to resolve missing responses. Since it is desirable to produce a complete and consistent micro data file, imputation is used to handle the remaining missing cases.

In the MWTS, imputation for missing values can be based on either historical data or administrative data. The appropriate method is selected according to a strategy that is based on whether historical data is available, administrative data is available and/or which reference month is being processed.

There are three types of historical imputation methods. The first type is a general trend that uses one historical data source (previous month, data from next month or data from same month previous year). The second type is a regression model where data from previous month and same month previous year are used simultaneously. The third type uses the historical data as a direct replacement value for a non-respondent. Depending upon the particular reference month, there is an order of preference that exists so that a top quality imputation can result. The historical imputation method that was labelled as the third type above is always the last option in the order for each reference month.

The imputation methods using administrative data are automatically selected when historical information is unavailable for a non-respondent. The administrative data source (annual GST sales) is the basis of these methods. The annual GST sales are used for two types of methods. One is a general trend that will be used for simple structure, e.g. enterprises with only one establishment, and a second type is called median-average that is used for units with a more complex structure.

Estimation

Estimation is a process that approximates unknown population parameters using only the part of the population that is included in a sample. Inferences about these unknown parameters are then made, using the sample data and associated survey design.

In the MWTS, new estimation processes have been developed using Statistics Canada's Generalized Estimation System (GES), addressing the need to deal with influential units and allowing for implementation of special corrections during processing. Different methodologies have been put in place to estimate wholesale sales and inventories.

For wholesale sales, the population is divided into a survey portion (take-all and take-some strata) and a non-survey portion (take-none stratum). From the sample that is drawn from the survey portion, an estimate for the population is determined through the use of a Horvitz-Thompson estimator where responses for sales are weighted by using the inverses of the inclusion probabilities of the sampled units. Such weights (called sampling weights) can be interpreted as the number of times that each sampled unit should be replicated to represent the entire population. The calculated weighted sales values are summed by domain, to produce the total sales estimates by each industrial trade group / geographic area combination. A domain is defined as the most recent classification values available from the BR for the unit and the survey reference period. These domains may differ from the original sampling strata because units may have changed size, industry or location. Changes in classification are reflected immediately in the estimates and do not accumulate over time. For the non-survey portion, a ratio type estimator is calculated using auxiliary data. The estimate of the total wholesale sales is equal to the sum of the survey and non-survey portion estimates.

For wholesale inventories, the sample selected for estimating sales is used to derive an estimate through the use of a Horvitz-Thompson estimator for the survey portion. A sample-based ratio is then used to produce the estimate for the non-survey portion, and the estimate of the total is derived as the sum of the survey and non-survey portion estimates.

The measure of precision used for the MWTS to evaluate the quality of a population parameter estimate and to obtain valid inferences is the variance. The variance from the survey portion is derived directly from a stratified simple random sample without replacement.

Sample estimates may differ from the expected value of the estimates. However, since the estimate is based on a probability sample, the variability of the sample estimate with respect to its expected value can be measured. The variance of an estimate is a measure of the precision of the sample estimate and is defined as the average, over all possible samples, of the squared difference of the estimate from its expected value.

Quality evaluation

Prior to publication, combined survey results are analyzed for comparability; in general, this includes a detailed review of individual responses (especially for large businesses), general economic conditions and historical trends.

Disclosure control

Statistics Canada is prohibited by law from releasing any information it collects which could identify any person, business, or organization, unless consent has been given by the respondent or as permitted by the Statistics Act. Various confidentiality rules are applied to all data that are released or published to prevent the publication or disclosure of any information deemed confidential. If necessary, data are suppressed to prevent direct or residual disclosure of identifiable data.

Revisions and seasonal adjustment

Revisions in the raw data are required to correct known non-sampling errors. These normally include replacing imputed data with reported data, corrections to previously reported data, and estimates for new births that were not known at the time of the original estimates.

Raw data are revised, on a monthly basis, for the month immediately prior to the current reference month being published. That is, when data for December are being published for the first time, there will also be revisions, if necessary, to the raw data for November. In addition, revisions are made once a year, with the initial release of the February data, for all months in the previous year. The purpose is to correct any significant problems that have been found that apply for an extended period. The actual period of revision depends on the nature of the problem identified, but rarely exceeds three years.

Wholesale trade data are seasonally adjusted using the X11ARIMA/20001 model. This consists of extrapolating a year's worth of raw data with the ARIMA model (auto-regressive integrated moving average model), and of seasonally adjusting the raw time series. At the end of each calendar year, seasonally adjusted monthly estimates of wholesale sales are revised to equal the sum of the unadjusted estimates.

For more information about the revisions and seasonal adjustments, see Sections 11, 12 and 15 (Seasonal Adjustment and Trend-Cycle Estimation; Adjustment for Historical Series; Data Comparability) of the Data Quality Statement in the 'Documentation section' below.

Data accuracy

The methodology of this survey has been designed to control errors and to reduce their potential effects on estimates. However, the survey results remain subject to errors, of which sampling error is only one component of the total survey error. Sampling error results when observations are made only on a sample and not on the entire population.

All other errors arising from the various phases of a survey are referred to as non-sampling errors. For example, these types of errors can occur when a respondent provides incorrect information or does not answer certain questions; when a unit in the target population is omitted or covered more than once; when a unit that is out of scope for the survey is included by mistake or when errors occur in data processing, such as coding or capture errors. While the impact of non-sampling errors is difficult to evaluate, certain measures such as response and imputation rates can be used as indicators of the potential level of non-sampling error.

Coefficients of variation (CV) and response rates are major data quality measures used to validate results from the MWTS.

The coefficient of variation, defined as the standard error divided by the sample estimate, is a measure of precision in relative terms. Since the coefficient of variation is calculated from responses of individual units, it also measures some non-sampling errors.

Documentation

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