African Centre for Statistics United Nations Economic Commission for Africa Chapter 9: Chapter 9: Updating Supply and Use Tables 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 EN/SUT/2014/Pres/04

African Centre for Statistics Outline of Presentation Generalities on Updating Supply and Use Tables Supply table – Cells to update manually Supply table – Update procedure Uses table – Cells to update manually Uses table – Update procedure Manually updating other parts of the SUT RAS updating

African Centre for Statistics Generalities on Updating Supply and Use Tables Bench-mark SUTs are usually compiled on the occasion of a large scale industry survey or economic census. The benchmark SUT can be updated to the current year by a combination of manual and automatic (RAS) updating to produce an annual time series between benchmarks. The basic idea is that the marginal totals are updated using the latest information available from the sources that are used to compile annual GDP estimates The internal cells of the SUT are then forced to agree with the new marginal rows and columns by a mathematical procedure (RAS)

African Centre for Statistics Supply table – Cells to update manually

African Centre for Statistics Supply table – Update procedure (1/3) The first marginal total that must be updated manually is the column showing the total supply of goods and services at basic prices according to type of commodity. It will usually be impossible to update the benchmark breakdown of domestic production in the full commodity breakdown used in the Benchmark SUT. It may often be necessary to make several approximations such as using changes in GVA by kind of activity to update benchmark estimates of gross output.

African Centre for Statistics Supply table – Update procedure (2/3) Imports of merchandise will usually be available in full commodity But it is possible that no up to date estimate is available for imports of services or there may only be an estimate of total service imports. International freight and insurance on merchandise imports are usually the most important service imports and they can be updated using the change in the value of merchandise imports. Other services could be updated by the latest growth trends and using total service imports, if available, as the control total.

African Centre for Statistics Supply table – Update procedure (3/3) Trade and transport margins tend to be stable from year to year so the benchmark percentages can be applied to the new estimates of domestic production and imports at basic prices. Taxes and subsidies on products may not be available in commodity detail but provided figures are available for total product taxes and product subsidies the benchmark breakdown by commodity can be used to distribute the total figures.

African Centre for Statistics Use table – Cells to update manually

African Centre for Statistics Uses table – Update procedure (1/3) The manually-updated estimates of total supply by commodity at purchasers’ prices become the marginal control column for updating the Uses Table. The marginal row totals for final expenditures will be taken directly from the estimates of GDP. Total intermediate consumption can be obtained by deducting total final uses from total supply/use. This residually-obtained estimate of total intermediate consumption can then be used to update the row totals of intermediate consumption by kind of activity on a pro rata basis.

African Centre for Statistics Uses table – Update procedure (2/3) The final consumption expenditure of households, NPISH, and government by commodity can be updated automatically by RAS –However if some commodity detail is available this should be used to update these vectors. The commodity breakdown of merchandise exports may be available and if so this part of the export vector can be manually updated and exports of services can be updated by RAS.

African Centre for Statistics Uses table – Update procedure (3/3) The commodity breakdown of gross fixed capital formation and of changes in inventories can also be done automatically by RAS but this is not advisable. –For construction component in GFCF, the supply side information on construction output can be used –Machinery and equipment component can be broken down into products on the basis of imports if these are import dependent. Changes in inventories is a troublesome item for many countries. But updating this vector cannot be left to RAS because changes in inventories can have different signs ( + or -) from year to year.

African Centre for Statistics Manually updating other parts of the SUT In addition to the shaded portions of the Supply and Uses Tables it may be possible to manually update individual cells; RAS updating is a purely mechanical procedure and will never be better than manual updating based on knowledge of what has actually happened in the real world.

African Centre for Statistics RAS updating The modified version of RAS is used: 1.Any internal cells or vectors that have been manually revised are removed 2.The marginal rows and columns are recalculated 3.RAS forces the remaining internal cells to be consistent with these reduced marginal rows and columns 4.The cells and vectors that were manually updated are put back into the supply and use tables.

African Centre for Statistics United Nations Economic Commission for Africa 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