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Roofs of Prague

Italian National Institute of Statistics National Accounts Department. The analysis of gross fixed capital formation in institutional sectors accounts. Paola Santoro Francesca Tartamella. STATISTICS: Investment in the Future 2 Prague, 14-15 September 2009. Roofs of Prague. STATISTICS

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Roofs of Prague

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  1. Italian National Institute of Statistics National Accounts Department The analysis of gross fixed capital formation in institutional sectors accounts Paola Santoro Francesca Tartamella STATISTICS: Investment in the Future 2 Prague, 14-15 September 2009 Roofs of Prague

  2. STATISTICS “Investment in the Future 2” Introduction Introduction IntroductionMethodologyResultsConclusions In 2007 the Italian institute of statistics (Istat) published the revised estimates of total fixed capital formation (GFCF) by institutional sector. In this report we describe: - the new estimation methodology; - the main results obtained. Prague, 14-15 September 2009

  3. STATISTICS “Investment in the Future 2” Definition IntroductionMethodologyResultsConclusions “Gross fixed capital formation consists of resident producers’ acquisitions, less disposals, of fixed assets during a given period plus certain additions to the value of non-produced assets realised by the productive activity of producer or institutional units. Fixed assets are tangible or intangible assets produced as outputs from processes of production that are themselves used repeatedly, or continuously, in processes of production for more than one year” (ESA95, 3.102). Methodology GFCF is recorded when the ownership of the fixed assets is transferred and must be evaluated at purchasers’ prices (ESA95, 3.112). Prague, 14-15 September 2009

  4. STATISTICS “Investment in the Future 2” GFCF estimates The aggregate is estimated from two points of view: IntroductionMethodologyResultsConclusions from the viewpoint of the producer of GFCF goods or services (GFCF by producer industry); Methodology from the viewpoint of the user of GFCF goods or services (GFCF by owner industry). From economic owner point of view, the aggregate is also estimated by institutional sector (GFCF by institutional sector). By construction, for every asset, the value of GFCF by institutional sector is totally consistent with the value of GFCF by producer and by owner industry. Prague, 14-15 September 2009

  5. STATISTICS “Investment in the Future 2” GFCF by institutional sector IntroductionMethodologyResultsConclusions In every industry, the value of GFCF by asset has to be allocated to all the institutional sectors engaged in that activity. Methodology GFCF by institutional sector is estimated for: • Non-financial corporations (S.11) • Financial corporations (S.12) • General government (S.13) • Households (S.14) • Non-profit institutions serving households (S.15) GFCF for the Rest of the world (S.2) equals zero by definition. Prague, 14-15 September 2009

  6. STATISTICS “Investment in the Future 2” Households sector in Italian National Accounts IntroductionMethodologyResultsConclusions Inside the Households sector Istat distinguishes between: Methodology Consumer households (S.14 HC), whose main function consists in consumption and output of goods and services for own final use, • Producer households (S.14 HP), that includes all the market activities of the sector. Assets acquired by Consumer households are not considered GFCF but final consumption (ESA95, 7.15). An exception are dwellings: the production of housing services by owner-occupiers is considered as own account production (ESA95, 1.13). Prague, 14-15 September 2009

  7. STATISTICS “Investment in the Future 2” Estimation method IntroductionMethodologyResultsConclusions The methodology is carried out in two phases: Methodology 1) The estimation of GFCF value of General government, Financial corporations and Non-profit institutions serving households, by industry and by asset; 2) The attribution of the remaining part of GFCF to Non-financial corporations and Households, by industry and by asset. Prague, 14-15 September 2009

  8. STATISTICS “Investment in the Future 2” Estimation method for Households and Non-financial corporations (1) IntroductionMethodologyResultsConclusions We obtain average values of GFCF, based on total employment, from information provided by business surveys: ajik Methodology These average values are estimated: for each assetj (1,..,5: buildings; machinery; furniture; transport equipment; software) in every industryi (1,…,101) by size class+legal formk (1,2 where k = 1 identifies enterprises with size class 1-5 people employed and legal form sole proprietorships, società semplici and società di fatto; k = 2 identifies enterprises with size class 6+ people employed and other legal form). Prague, 14-15 September 2009

  9. STATISTICS “Investment in the Future 2” Estimation method for Households and Non-financial corporations (1) IntroductionMethodologyResultsConclusions In Italian National Accounts: The difference between Non-financial corporations sector and Producer households sector mainly attains to the size class and legal form. Methodology *own account workers; sole proprietorships, “società semplici” and “società di fatto” Prague, 14-15 September 2009

  10. STATISTICS “Investment in the Future 2” Estimation method for Households and Non-financial corporations (1) IntroductionMethodologyResultsConclusions Methodology • aji1 is a proxy of the average value of the GFCF of Producer households in asset j in industry i; • aji2 is a proxy of the average value of the GFCF of Non-financial corporations in asset j in industry i. Prague, 14-15 September 2009

  11. STATISTICS “Investment in the Future 2” Estimation method for Households and Non-financial corporations (2) IntroductionMethodologyResultsConclusions These average values are multiplied by FTEUs of each sector and of every industry: Methodology Asij= first estimate of GFCF of sector s in asset j in industry i FTEUssi= full time equivalent units of sector s in industry i s = sector (S.11 or S.14 HP). Prague, 14-15 September 2009

  12. STATISTICS “Investment in the Future 2” Estimation method for Households and Non-financial corporations (3) IntroductionMethodologyResultsConclusions The ratio between GFCF of each sector and the sum of GFCF of the two sectors calculated in this way represents the partition coefficient used to divide the amount of GFCF by industry net of General government, Financial corporations and Non-profit institutions serving households: Methodology GFCFsij = GFCF of sector s in industry i and asset j GFCFS1ij = Total GFCF in industry i and asset j GFCFS12ij = GFCF of S.12 in industry i and asset j GFCFS13ij = GFCF of S.13 in industry i and asset j GFCFS15ij= GFCF of S.15 in industry i and asset j A.ij= AS11ij + AS14HPij. Prague, 14-15 September 2009

  13. STATISTICS “Investment in the Future 2” Results IntroductionMethodologyResultsConclusions GFCF by institutional sector is estimated at a high level of detail, by 11 types of assets and 101 industries. Results The features of corporations may be distinguished from those of small unincorporated enterprises: Institutional sectors perform their economic activity in industries characterized by different capital intensity; in the same industry, the investment behaviour of small enterprises may differ from the one of corporations. Prague, 14-15 September 2009

  14. STATISTICS “Investment in the Future 2” Mining, Manufacturing, Electricity, gas and water supply IntroductionMethodologyResultsConclusions Gross fixed capital formation (GFCF), value added (VA), labour input (FTEUs) distributions and Investment rate (GFCF/VA) by institutional sector; Nace C,D,E; average percentages of current values (years 2000-2008); Italy. Results Prague, 14-15 September 2009

  15. STATISTICS “Investment in the Future 2” Mining, Manufacturing, Electricity, gas and water supply IntroductionMethodologyResultsConclusions Gross fixed capital formation composition by asset and by institutional sector; Nace C,D,E; average percentages of current values (years 2000-2008); Italy. Results Machinery and equipment = products of agriculture, machinery and other equipments, office machinery and computer; communication equipment and apparatus; furniture, software and other intangible assets. Transport equipment = road transport equipment and other transport equipments (air sea and rail transport equipment: planes, boats etc.) . Buildings = dwellings, non residential buildings and other structures. This category includes as well major maintenance, installation costs and costs connected with transfer of ownership. Prague, 14-15 September 2009

  16. STATISTICS “Investment in the Future 2” Wholesale, retail trade, repair, Hotels and restaurants, Transport, storage and communications IntroductionMethodologyResultsConclusions Gross fixed capital formation (GFCF), value added (VA), labour input (FTEUs) distributions and Investment rate by institutional sector; Nace G,H,I; average percentages of current values (years 2000-2008); Italy. Results Prague, 14-15 September 2009

  17. STATISTICS “Investment in the Future 2” Wholesale, retail trade, repair, Hotels and restaurants, Transport, storage and communications IntroductionMethodologyResultsConclusions Gross fixed capital formation composition by asset and by institutional sector; Nace G,H,I; average percentages of current values (years 2000-2008); Italy. Results Machinery and equipment = products of agriculture, machinery and other equipments, office machinery and computer; communication equipment and apparatus; furniture, software and other intangible assets. Transport equipment = road transport equipment and other transport equipments (air sea and rail transport equipment: planes, boats etc.) . Buildings = dwellings, non residential buildings and other structures. This category includes as well major maintenance, installation costs and costs connected with transfer of ownership. Prague, 14-15 September 2009

  18. STATISTICS “Investment in the Future 2” Agriculture, hunting, forestry, Fishing IntroductionMethodologyResultsConclusions Gross fixed capital formation (GFCF), value added (VA), labour input (FTEUs) distributions and Investment rate (GFCF/VA) by institutional sector; Nace A,B; average percentages of current values (years 2000-2008); Italy. Results Prague, 14-15 September 2009

  19. STATISTICS “Investment in the Future 2” Agriculture, hunting, forestry, Fishing IntroductionMethodologyResultsConclusions Gross fixed capital formation composition by asset and by institutional sector; Nace A,B; average percentages of current values (years 2000-2008); Italy. Results Machinery and equipment = products of agriculture, machinery and other equipments, office machinery and computer; communication equipment and apparatus; furniture, software and other intangible assets. Transport equipment = road transport equipment and other transport equipments (air sea and rail transport equipment: planes, boats etc.) . Buildings = dwellings, non residential buildings and other structures. This category includes as well major maintenance, installation costs and costs connected with transfer of ownership. Prague, 14-15 September 2009

  20. Conclusions and future developments IntroductionMethodologyResultsConclusions Performing a simultaneous analysis of GFCF by sector, industry and type of good allows to derive useful information about the productive structure of enterprises and the different models of capital formation of producer units organised differently (small enterprises versus corporations). Conclusions This analysis, based on asset flows,should be integrated with the analysis of capital stocks to study: - the productivity, investigating the relationship among capital formation, capital stock, labour input and value added growth; - the capital intensity by sector and by industry. Prague, 14-15 September 2009

  21. Conclusions and future developments IntroductionMethodologyResultsConclusions In 2007, Istat National Accounts Department started a project aimed at producing a first estimate of Balance sheets by institutional sector for the main non-financial assets, in particular dwellings, non residential buildings and other structures, machinery and equipment and land for the year 2006. Conclusions The transmission of Balance sheets by institutional sector will be compulsory by 2010. The compilation of Balance sheets performed by all the member countries will enrich the statistical knowledge and, in particular, will favour studies on productivity. Prague, 14-15 September 2009

  22. Thank you!

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