The total industrial output value is an important indicator that reflects the total scale and total level of industrial production in a country or region in a certain period of time. This indicator has extremely important significance. So what exactly is gross industrial output value, and what are the effects of gross industrial output value on foreign exchange? This article will give you a brief introduction.

What is the gross industrial output value?

The gross industrial output value is the total amount of sold or available-for-sale industrial products produced by industrial enterprises in a certain period of time expressed in currency. It reflects the total scale and total level of industrial production in a certain period of time. It includes: the value of finished products after inspection, packaging and storage (except products that require packaging), the value of industrial operations, self-made semi-finished products, and the value of the difference at the end of the product period (longer production cycle) Enterprise computing). The total industrial output value is calculated using the “factory method”, that is, the industrial enterprise as a whole is calculated according to the final results of the enterprise’s industrial production activities. Double calculations within the enterprise are not allowed, and the results produced by the various workshops (branch factories) within the enterprise cannot be compared with each other. plus. But there is double counting among enterprises, industries, and regions.

The division of the total output value of light and heavy industries is also calculated according to the “factory method”, that is, the nature of the main products produced by an industrial enterprise under normal conditions belongs to light industry, then the total output value of the enterprise is regarded as the total output value of light industry; the main production value of an industrial enterprise The nature of the product belongs to heavy industry, and the total output value of the enterprise is regarded as the total output value of heavy industry.

The total industrial output value includes: the value of the finished products produced in the current period, the income from external processing fees, the self-made semi-finished products and the end-to-begin balance of the work-in-progress.

Calculation method of total industrial output value

  1. Gross industrial production = product output of the current month × product sales unit price

The unit sales price is the unit price excluding tax, because the value-added tax itself does not represent income.

  1. Gross industrial production = main business income of the current month + ending balance of inventory-beginning balance of inventory

Monthly sales revenue = current month sales quantity × current month sales unit price

Ending balance of inventory of goods = ending quantity of inventory of goods × unit price of the current month

Beginning balance of inventory of goods = beginning quantity of inventory of goods × unit price of the current month

(1) Replace the total industrial output value with product sales revenue or production cost

(2) Do not follow the principle of production (the product is not produced by the company)

(3) The balance of semi-finished products and work in progress at the beginning and end of the period is missing

Principles for calculating total industrial output value

  1. The principle of industrial production. All products that have been inspected and qualified during the reporting period, regardless of whether they are sold during the reporting period, should be included in the calculation of the total industrial output value.
  2. The principle of the final product. All products included in the total industrial output value must be the final product produced by the enterprise that has passed the inspection and does not require any further processing. If an enterprise sells intermediate products externally, it is also regarded as the final product of the enterprise and should also be included in the total output value of the enterprise.
  3. Principles of Factory Law. The total industrial output value is calculated based on the final product of the enterprise, so the value of the same product is not allowed to be double-calculated within the enterprise, but double-calculation between enterprises is allowed.

What impact does the gross industrial output value have on the foreign exchange market?

  1. The growth of gross industrial output will make it possible for the country’s central bank to raise interest rates and tighten the money supply. The country’s economic performance and rising interest rates will increase the attractiveness of the country’s currency. Therefore, the high economic growth rate will promote the rise of the national currency exchange rate, while the low economic growth rate will cause the country’s currency exchange rate to fall.
  2. The country’s high economic growth rate means that income increases and domestic demand levels increase, which will increase the country’s imports, resulting in a current account deficit and a decline in the country’s currency exchange rate.
  3. The country’s economy is export-oriented, and economic growth is for the production of more export products. The increase in exports will make up for the increase in imports and reduce the pressure on the country’s currency exchange rate to fall.
  4. The gross industrial output value is a country’s high economic growth rate, which means that labor productivity will increase rapidly, and cost reduction will improve the competitive position of the country’s products, which is conducive to increasing exports and inhibiting imports. The high economic growth rate makes the country’s currency in the foreign exchange market. If the above is optimistic, the currency exchange rate of the country will have an upward trend.

Now everyone should know what the gross industrial output value is! For ordinary investors, the total industrial output value can only be used as a reference. In addition, it can be seen that the total industrial output value has a great impact on foreign exchange. Therefore, investors should pay proper attention to the total industrial output value when analyzing the foreign exchange market. Variety.