Chapter 4: Use Table

1. Chapter 4: Use Table Ramesh KOLLI Senior Advisor on National Accounts, African Centre for Statistics At Expert Group Meeting on Supply and Use Tables 2-6 June 2014, Port Louis, Mauritius Le Méridien Ile Maurice

2. Outline of the presentation • Overview of the structure • Classifications • Valuations • Quadrant I • Quadrant II • Quadrant III • Compilation • Comments • Questions for discussions

3. Overview of the structure (1/2) • Quadrant I: refers to the intermediate use (rows limited to products and columns limited to industries); • Quadrant II refers to the final use (rows limited to products and adjustment items and columns limited to final uses); and • Quadrant III (rows limited to value added components or its uses and columns limited to industries).

4. Overview of the structure (2/2)

5. Classifications • Central Product Classification (CPC) for products and International Standard of Industrial Classification (ISIC) for industries • Different data sources which use different classifications: • COICOP: for HHs consumption expenditure • COPNI: for NPISHs • COFOG: for government expenditure • SITC or HS: for imports and exports

6. Valuations • Intermediate and final uses are valued at purchasers prices • Exportsare valued at F.O.B. (Free On Board) Price • Non-market services produced by government and NPISHs are valued on a non-market basis • Sum of compensation of employees, consumption of fixed capital, and other taxes less subsidies on production

7. Quadrant I • Intermediate consumption (IC) consists of value of goods and services that are used as inputs in the production process resulting in output. • Are excluded from IC: use of fixed assets, expenditures on valuables • Are included in IC: expenditures on hand tool of low value • IC are recorded on an accrual basis: time when goods and services are used in the production process • IC = Acquisitions – Changes in inventories

8. Quadrant II: NPISHs • Identification of NPISHs is based on the following: • (a) they provide their services (and sometimes goods) on a non-market basis, and • (b) they are mainly financed by donations from different sources or regular subscriptions • Final consumption expenditures of NPISHs are equal to the gross output of producers of NPISHs services less sales (including own account capital formation as that is part of output) plus social transfers in kind.

9. Quadrant II: GFCE • “General government” in the 1993 SNA includes all levels of government (municipal, local, state, provincial and federal). • The government final consumption expenditure is equivalent to government output, less the value of government sales of non-capital goods and services, plus social benefits in kind. • Output of government services is measured on the basis of costs of production

10. Quadrant II: HFCE (1/2) • Household final consumption expenditures include: • All purchases of consumer non-durable and durable goods except dwellings; • Imputed purchases of consumer durables by financial leasing; • Imputed gross rental for owner-occupied housing services; • Own-account production and consumption of goods;

11. Quadrant II: HFCE (2/2) • Bartered consumer goods and services (net); • Domestic services provided by domestic servants; • Goods and services in kind provided by enterprises as wages; • Imputed financial intermediary (banking, insurance, pension, etc.) service charges; • Purchases by residents abroad; • (Minus) Purchases by non-residents at home.

12. Quadrant II: GCF (1/2) • Gross fixed capital formation: comprises gross fixed capital formation, changes in inventories and acquisition less disposal of valuables • Gross fixed capital formation (GFCF) is measured by the total value of a producer's acquisition, less disposal, of fixed assets during the accounting period plus certain additions to the value of non-produced assets realized by productive activities of resident producers. • Changes in inventories are measured by the value of the entries into inventories less the value of withdrawals and less the value of any recurrent losses of goods held in inventories during the accounting period.

13. Quadrant II: GCF (2/2)

14. Quadrant II: Valuables • Valuables: • Are produced goods of considerable value that are notused primarily for purposes of production or consumption but are held as stores of value over time. • Are expected to appreciate or at least not to decline in real value, nor to deteriorate over time under normal conditions.

15. Quadrant II: Exports • Exports of goods and services consist of sales, barter, or gifts or grants, of goods and services from resident to non-residents • As measured in the balance of payments, exports of services include direct purchases in the domestic market by non-resident households (“tourist expenditures”).

16. Quadrant III: Compensation of employees • Definition: Total remuneration, in cash or kind, payable by an enterprise to an employee for work done during an accounting period. • Recorded on an accrual basis • Included: • Wages and salaries (cash or kind) • Social insurance contributions payable by employers

17. Quadrant III: CFC • Definition:the decline, during the course of the accounting period, in the current value of the stock of fixed assets owned and used by a producer as a result of: • physical deterioration; • normal obsolescence; or • normal accidental damage. • Estimation of CFC is obtained through perpetual inventory method (PIM)

18. Quadrant III: Adjustments • Purchases of residents abroad: • Recorded under imports; and • Recorded under HH consumption (+) It is necessary to allocate this amount by products. • Purchases of non-residents in the domestic market • Recorded under exports; and • Recorded under HH consumption (-)

19. Compilation • Row approach : compiling use table through product balances (commodity flow approach) • Column approach: using the product wise information on intermediate consumption by industries, consumption expenditure, capital formation and exports • Data sources: enterprise surveys, agricultural surveys, administrative data, BoP, foreign trade statistics

20. Thank you Ramesh KOLLI Senior Advisor on National Accounts, African Centre for Statistics At Expert Group Meeting on Supply and Use Tables 2-6 June 2014, Port Louis, Mauritius, Le Méridien Ile Maurice