Compiling the Supply Table

- methods and sources

THE CONTRACTOR IS ACTING UNDER A FRAMEWORK CONTRACT CONCLUDED WITH THE COMMISSION

Eurostat
Supply table
Supply of goods and services to the economy
comes from domestic production and imports

Domestic production is valued at basic prices

To sales/revenue figures, we add change in

inventories for finished goods and work in progress
to move to a gross output basis

Imports of goods are valued at cost + insurance

and freight charges (CIF) 2
Eurostat
Supply table
To move domestic production valued at basic prices
to purchasers prices, we must add

1. Taxes on production and imports (e.g. excise

duties)

2. Non-reclaimable VAT style product taxes

3. Margins incurred by distribution activities

3
Eurostat
Supply table
The first step is to create a domestic production
table, showing industries (in the columns) creating
products (in the rows) valued at basic prices.

Industries are classified by NACE – the industry

classification system used in the European Union

NACE is wholly consistent with the equivalent

revision of the UN standard ISIC (International
Standard for Industry Classification)
4
Eurostat
Supply table
Products are classified by CPA – a classification
system wholly consistent with the industry
classification system as each industry is defined in
terms of the products that it mostly produces

It is common for the number of products identified

to be greater than the industries, and so the
domestic production supply table can be
rectangular, and not square.

5
Eurostat
Supply table
Task 3 Supply Table.xlsx

6
Eurostat
Elements of the Supply Table
1. Entries in the production table

2. Diagonal entries will always be the largest in an

industry column

3. Off-diagonal entries represent secondary

production of non-typical products

7
Eurostat
Elements of the Supply table
Off-diagonal production

What does the 50 in the bottom box represent?

8
Eurostat
Elements of the Supply table
The 50 reflects work carried out by a company
classified to the manufacturing industry, which is a
principle product of the construction industry.

The example could be a large perimeter wall around

a factory, built by the manufacturing company

The wall is a construction – a product of the

construction industry and so to be balanced by
spending on this product as capital formation on
structures, in the row for building products 9
Eurostat
Elements of the Supply table
Imports are value at c.i.f. – the price including cost
(of the good), and payments for insurance and
freight necessary to transport the good into the
importing country.

So imports (CIF) are priced on the same basis as

goods leaving the factory before production and
product taxes

A further adjustment is needed

10
Eurostat
Supply table
If part of the freight and insurance is supplied by
domestic producers, then there will be a double
counting of supply.

For example, the domestic transport company will

show output of transport services, to match the
exports of this service

but this will already be included in the value of

supply of goods from abroad when the services are
to import goods 11
Eurostat
Supply table
Example

Resident company provides transport services, sold

to a foreign company in order to import goods

If the value is 100, then that accounts will show

output of 100 matched by an export of 100

To avoid double counting supply, we must reduce

the value of the imported goods (CIF) by 100
12
Eurostat
Supply table - Sources
1. Annual Census of Production

2. Typical measures

a. Turnover (Sales)
b. Costs (purchases)
c. Compensation of employees
d. Capital formation by type
e. Change in inventories
i. Change in stocks of finished goods
ii. Change in work in progress
iii. Change in stocks of materials & fuels 13
Eurostat
Supply table sources
2. PRODCOM

Prodcom is an annual survey (once quarterly) which

gives details of goods sold by industrial activity –
the products are classified by CPA, closely linked to
CN (Common nomenclature for international trade
in goods)

This gives a breakdown of products broduced by

each industry for goods
14
Eurostat
Supply table sources
3. Other official surveys and sources

Services surveys, international services,

government agencies, public sector utilities
accounts

4. Other ad hoc sources

Company accounts, media reports etc.

15
Eurostat
Supply table sources
4. Output for own final use

Where it is not possible to carry out such direct

estimations with confidence, a second best is to
assume the value is sum of costs in making the
final output – input materials, compensation of
employees, depreciation of capital, and for market
producers, an estimate of the opportunity cost (net
return on capital).

16
Eurostat
Supply table sources
5. Non-market output

Non-market output is not sold on the market, and

usually has no equivalent in the market.

It is valued as sum of costs, as for output for own

use, but with no estimate for opportunity cost
included

17
Eurostat
Supply table sources
Imports

International Trade statistics (Intrastat)

International passenger survey

Annual Survey of International Trade in Services

18
Eurostat
Supply table sources
Production taxes

Aggregate figures and tables are available through

the government ministry responsible for taxation
(Usually Customs and Excise, with Ministry of
Finance) plus local authority returns

These are taken as control totals, and spread

across production and products according to type of
tax and survey information
19
Eurostat
Supply table sources
Production subsidies

As for production taxes, production subsidies and

tables are available through the government
ministry responsible for taxation

General subsidies applied by type of business or

location rather than linked to production, are
recorded as D.39 and included with similar taxes
within value added, transferred to government in
the generation of income account 20
Eurostat
Supply table sources
Distribution Margins

These can be obtained from an Annual Retail and

wholesale inquiry

Identification of type of outlet, split up into type of

retail goods, enables distribution margins by
product type to be derived.

21
Eurostat
Supply table sources
Transport margins

Transport is usually provided and paid for as part of

the whoplesale retail service.

However, where transport service is invoiced

separately to the purchaser, then this should be
shown as a distribution margin adding to the final
price paid by the purchaser,

22
Eurostat