Supply and Use Tables THE CONTRACTOR IS ACTING UNDER A FRAMEWORK CONTRACT CONCLUDED WITH THE COMMISSION

Presentation The SUTs are presented as 4 matrices:

Introduction The supply and use tables (SUT) are a tabular presentation of the production and consumption of goods and services in the economy. In the rows, it presents the goods and services account at a detailed product level, maintaining the accounting balance between supply and demand for each product group. Resources Uses Output Net taxes on products Imports Intermediate consumption Final consumption Gross fixed capital formation Changes in inventories Acquisitions less disposals of valuables Exports

Introduction In the columns for the purchasing industries, we can see the entries of the production account. Total industry output less the intermediate consumption of goods and services from other industry products, gives Value added as a balancing entry at the foot of the columns for each industry.

The row balance The supply of products through domestic output and imports is matched by the use of these products by business, final consumption of households and government, capital formation and exports O + M + product taxes = IC + C + G +I + X

The column balance for business The value added for each industry group is determined in each column by the difference between total output and the costs of production – intermediate consumption. Usually, expenditure on employment is entered for each industry and so instead of value added, operating surplus is shown as the balancing item.

Breakdown by products In order to achieve a balance between supply and use across the rows, it is necessary to move the supply onto the same price basis as the use – ie to move to purchaser prices from basic prices. This requires adjustments for product taxes, retail and wholesale margins, and transport margins.

Trade and transport margins A trade margin is the difference between the sale price and purchase price. Transport margins are transportation costs paid separately by the purchaser and are included in the use of products at purchasers’ price but not in the basic price of a manufacturer’s output or in the trade margins of wholesale or retail traders. Transport of goods paid by a manufacturer and not invoiced separately are included in the basic price.

Resources and uses for a product For a specific product we have a balance at purchasers’ prices: Resources Uses Output Taxes on products - Subsidies on products Imports Trade margins Transport margins Intermediate consumption Final consumption Gross fixed capital formation Changes in inventories Acquisitions less disposals of valuables Exports

The supply table The supply table presents in columns the different resources for all the products:

Supply Industries Products Agr Man Servs Total output 6 000 100 6 100 1 100 24 200 300 25 600 10 000 10 200 Total 7 200 24 400 10 300 41 900

Total output Imports Margins Taxes Total supply 6 100 200 300 -100 6 500 25 600 2 000 1 500 500 29 600 10 200 1300 -1 800 1 000 10 700 41 900 3 500 1 400 46 800

The adjustment for margins and taxes The Supply table rows for the products 'trade' and ‘transport' are special. In order to adjust the output and imports of products from a basic price basis to a purchasers’ price, we must add taxes on products, and re-assign the retail, wholesale and transport margins from the producing industry product to the goods on which the margins are earned. An example is given in the next slide

The adjustment for margins and taxes Supply table example: Products of agriculture 6100 200 300 -100 6500 Products of industry 25600 2000 1500 500 29600 Trade 1200 100 -1000 600 Transport 900 -800 Other services 8100 1000 9600 Total 41900 3500 1400 46800 Total supply Output Imports Margins Taxes - sub.

Use table – intermediate consumption   Industries Products Agriculture Manufacturing Services Total intermediate demand 6 000 100 6 100 1 100 24 200 300 35 600 10 000 10 200 Total intermediate consumption 7 200 24 400 10 300 41 900

Use table – Final demand Products Final consumption Households Final Consumption Government Capital formation Exports Total Final demand Agriculture 4 000   500 4 500 Manufacturing 5 000 8 100 18 100 Services 2 000 3 000 7 00 Total Final expenditure 11 000 10 600 29 600

Breakdown by industry The aim here is to examine the production processes and to measure production costs of products . For this we will group the companies producing the same products. The problem is that the same company can produce different products. For example, a transport company may also have a repair activity. The company is therefore not a good statistical unit to study the production process and it is necessary to break it down into more homogeneous units. The local kind-of-activity (local KAU) is the statistical unit used for compiling SUT.

Local KAU The local kind-of-activity unit (local KAU) is the part of a kind of activity unit (KAU) which corresponds to a local unit. A KAU groups all the part of an institutional unit in its capacity as producer contributing to the performance of an activity at class level (four digits) of the NACE rev. 2 and corresponds to one or more operational subdivisions of the institutional unit. The institutional unit’s information system must be capable of indicating or calculating for each local KAU at least the value of production, intermediate consumption, compensation of employees, the operating surplus and employment and gross fixed capital formation.

Industries An industry consists of a group of local KAU engaged in the same, or similar, kind-of-activity. At the most detailed level of classification, an industry consists of all the local KAU falling within a single class (four digits) of NACE Rev. 2 and which are therefore engaged in the same activity as defined in the NACE Rev. 2. All the local KAU of an industry have the same pricipal activity but may have different secondary activities. In the SUT output and intermediate consumption are broken down by industry.

Production matrix Production matrix shows a breakdown by product of the output of different industries:

Generation of income account The generation of income account is also presented by industry:

Thank you for your attention CONTRACTOR IS ACTING UNDER A FRAMEWORK CONTRACT CONCLUDED WITH THE COMMISSION