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This topic relates to businesses whose main activity involves the collection, treatment and distribution of water for domestic and industrial needs and/or the operation of sewer systems or sewerage treatment facilities that collect, treat and dispose of sewage.


Annual Business Inquiry
Department: Office for National Statistics
The Annual Business Inquiry (ABI) is conducted in two parts: employment and financial information. This release deals with the financial inquiry which collects information for about two thirds of the UK economy, covering agriculture (part), hunting, forestry and fishing; production; construction; motor trades; wholesale; retail; catering and allied trades; property; service trades. The financial variables covered include turnover, purchases, employment costs, capital expenditure and stocks. Approximate Gross Value Added (GVA) is calculated as an input into the measurement of Gross Domestic product (GDP).
Annual Business Survey
Department: Office for National Statistics
The Annual Business Survey collects financial information for the UK non-financial business economy; variables covered include turnover, purchases and approximate gross value added.
Northern Ireland Annual Business Inquiry
Department: Northern Ireland Statistics and Research Agency
Provides information on the value of the economic activity that businesses generate and associated expenditure across the main industrial sectors in Northern Ireland.
Northern Ireland Annual Business Inquiry
Department: Enterprise, Trade and Investment (Northern Ireland)
Provides information on the value of the economic activity that businesses generate and associated expenditure across the main industrial sectors in Northern Ireland.

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Activities include:

  • collection, purification, treatment and distribution of water 

  • desalting of sea/ground water to produce water as the principal product

  • operation of irrigation canals (but not irrigation equipment for agricultural purposes)

  • collection and treatment of sewage

Also included is the operation of sewer systems or sewer treatment facilities; the collecting and transporting of human waste water and rainwater by means of sewerage networks, collectors, tanks and other means of transport (sewage vehicles); the treatment of waste water (including human and industrial waste water, water from swimming pools) using physical, chemical and biological processes such as dilution, screening, filtering, sedimentation; the maintenance and cleaning of sewers and drains and the emptying and cleaning of cesspools, septic tanks, sinks and pits, servicing of chemical toilets.

Activities exclude:

  • treatment of waste water to prevent pollution

  • long-distance transport of water via pipelines

  • clearing, de-blocking of drainpipes in buildings

  • decontamination of surface water and groundwater at the place of pollution

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Technical Data

Data are collected from a selection of businesses in the water and sewage industry via the Annual Business Inquiry (financial), (ABI/2), the Monthly Production Inquiry (MPI) and the Monthly Inquiry into the Distribution and Services Sector (MIDSS). All three surveys are sample surveys but the data collected are grossed to provide an estimate covering the total population of the sector.

Aggregated ABI/2 data for the main variables feed into the National and Regional Accounts and are published annually in the ‘Blue Book’. It is also used to derive Gross Value Added (GVA), which measures the contribution of the water and sewage industry to the economy.

Other measures such as turnover per head are derived using employment data collected by the Annual Business Inquiry (employment). The monthly data for this industry are used to calculate short-term indicators for both the production and services sectors. All data produced are at current prices and non-seasonally adjusted.

Total Turnover

The total turnover of the business is collected by both the annual and monthly surveys. The annual turnover, together with the other variables, is used to derive industry level GVA. Monthly turnover data are used as a proxy for GVA because it is not possible to collect the individual variables on a monthly basis.

Other main variables collected and used in the calculation of GVA are:

  • employment costs

  • purchases of energy goods, materials and services

  • tax, duties and levies paid

  • subsidies receivable

  • value of stocks held

  • capital expenditure

Gross Value Added (GVA)

GVA is used in the estimation of Gross Domestic Product (GDP), which is a key indicator of the state of the whole economy. In the UK, three theoretical approaches are used to estimate GDP: ‘production’, ‘income’ and ‘expenditure’. All three approaches are balanced annually using the Input-Output Supply and Use Tables accounting framework. The GVA for the water and sewage industry is used in the estimation of the GDP ‘production’ approach.

The link between GVA and GDP can be defined as:

GVA (at industry level current basic prices) 
plus taxes on products
(available at whole economy level only) 
minus subsidies on products
(available at whole economy level only) 
equals GDP
(at current market prices; available at whole economy level only)

The Standard Industrial Classification (SIC) defines the activities covered by the water and sewage industry. The main or principal activity of a business is defined as that part of the business accounting for the highest percentage of the business’ total value added. In practice, variables such as employment, wages and salaries, gross output and value of sales are used instead of value added.

The UK SIC, which defines all of the Office for National Statistics’ (ONS') business surveys, is based on the European Communities classification of Economic Activities, NACE (from January 2008, a major revision of NACE was introduced, NACE Rev.2).

ONS is in the process of converting its surveys to NACE Rev.2, with the ABI/2 2008 survey to be despatched early in 2009, one of the first surveys to be selected on the new classification SIC 2007. For the water and sewage industry this means that water (classified under ‘electricity, gas and water’ in SIC 2003) and sewage (classified under ‘other community, social and personal service activities’) will be brought together under the same classification, resulting in better coverage of the industry as a whole.

All ONS business surveys will be converted to SIC 2007 over the next few years, with the National Accounts system being the last to be converted in 2011. In order to take full advantage of the change in classification, all survey samples will be re-optimised as each survey converts to SIC 2007.

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  • Capital Expenditure (including non-deductible VAT but excluding deductible VAT)

    Capital Expenditure includes the purchase costs and disposal proceeds of fixed assets, together with any other amounts treated as capital items for taxation purposes. Grants and allowances from government sources, statutory bodies and local authorities should be included.

  • Employment Costs

    This is the amount the business pays for its workforce to carry out the activities of the business. It includes wages and salaries paid to all employees (including overtime) and also the National Insurance and pensions contributions paid by the employer. Employment costs for subcontracted work where the employees are not directly employed by the business are excluded. 

  • Eurostat

    This is the Statistical Office of the European Communities, based in Luxembourg.

  • Gross value added (GVA)

    GVA is a measure of the value of the goods and services produced in the economy and is used to monitor the performance of the national economy as a whole. It can also be used by individual businesses to monitor their performance, and hence the profitability, of their business. GVA is calculated as the value of sales of goods and services; the cost of purchases of energy goods, materials and services.

  • Purchases of energy goods, materials and services

    This is the amount paid by the business for all energy goods, materials and services used to carry out the activities of that business. This figure is exclusive of VAT but inclusive of other taxes, duties and levies.

  • Standard Industrial Classification (SIC)

    This is the classification used by the Office for National Statistics (ONS) to classify businesses to particular industries for statistical purposes including the collection of financial data. The UK classification is based on the Eurostat NACE classification of economic activities, which is widely used throughout the European Community and enables comparisons to be made between national and EC statistics. Any revisions to NACE are made under EC Regulation and all Member States are obliged to adopt the changes. Along with other Member States, ONS is in the process of converting to NACE Rev.2, which under the UK classification is called SIC 2007.

  • Stocks held

    Stocks, or inventories, include all goods and materials on hand for sale or processing, including work in progress owned by the business in the UK. They should be valued in accordance with UK GAAP (Generally Accepted Accounting Practice) or International GAAP. Long-term contract balances included in stocks should be net of progress payments. 

  • Subsidies on products

    These are amounts receivable from UK government bodies or the European Community to reduce the price of products (goods or services) sold to customers. Grants received from any source as one-off payments to lessen the burden of purchasing capital expenditure items are excluded.

  • Tax, duties and levies paid

    This is the total amount payable in taxes (excluding VAT), duties or levies to government, other statutory bodies and local authorities on the energy goods, materials and products purchased by the business in order to carry out the activities of the business. Also included are any amounts payable in taxes, duties and levies on the outputs of the business.

  • Turnover (excluding VAT)

    Turnover consists of total takings or invoiced sales and receipts of the business in connection with the sale of goods and services and should include any indirect taxes, duties and levies (except VAT) invoiced to the customer. Interest and similar income, other operating income and extraordinary income are excluded as are the net proceeds on the sale of capital items.

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Contact Details

For statistical enquiries about this topic, please contact:

ONS Customer Services

Email: info@statistics.gov.uk

Telephone: +44 (0) 845 601 3034

Office for National Statistics Room 1.015 Government Buildings Cardiff Road Newport NP10 8XG

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