It had been observed that establishments monitored in the Survey of Key Manufacturing Industries registered an increase in the value of production/revenue index without a corresponding increase in its employment index. An explanation for this result might be over-estimation of production/revenue levels as in double-reporting cases wherein an establishment contracted out some production activities to another establishment and both establishments reported their production/revenue levels for such activities. Another explanation could be under-estimation of employment resulting from contracting to individuals and to household unincorporated enterprises was not captured. This preparatory study aimed to determine the extend of job and work contracting in selected industries particularly in manufacturing. There were two groups of respondents: (a) 38 principal establishments and (b) 42 contractors which were identified by the principal establishments. The study showed that establishments contracted out other establishments (84.1%) and individuals or homeowners (15.9%). About 21% of establishment-contractors did further contracting or subcontracting. Contracting or subcontracting was mainly in manufacturing of products/components and to some extent for maintenance, packaging and transport of products. More than 20% of principal establishments cited non-availability of specialized skills, while 16% of contractors cited variable market demand as reason for contracting or sub-contracting. More of contract works were done in the contractor’s place, including machineries and equipment. However, more of raw materials were provided by the principal establishments. Among 80% of principal establishments, the estimated proportion of total cost of contract to total operating cost was at most 80%. Among 55% of contractors, the estimated proportion of total value of contract works tot total revenue was 100%. The maximum ratio for regular to non-regular workers was around 9:1 for principal establishments and around 3:1 for contractors. It should be noted that results were based only on purposive sample of establishments covering only some sectors with substantial value of contract works as based from the Annual Survey of Establishments.
