1. Construction Value Added
CARICOM REGIONAL WORKSHOP
ON INTERNATIONAL TRADE IN SERVICES
STATISTICS
November 21-25, 2016
St. John’s, Antigua and Barbuda
Construction Value Added
Economic Accounting Division

2. Outline Estimation of Value Added
How is this related to International Trade in Services?

3. Estimation Procedure- General Overview
Product Groups: Building Construction, Civil Engineering, Building Installation
The estimate for the Construction industry is calculated using the Commodity Flow Method.
The commodity flow approach uses the flow of locally produced and imported goods
Gross Output (Work in-progress) - Intermediate Consumption= Value Added
The estimate is derived by using the local as well as the imported commodities used in the construction of buildings, bridges and roads and the installation of machinery & equipment.

4. Background I Data Source: Financial Statements
Development Bank of Jamaica, Jamaica Mortgage
Master Builders Association of Jamaica
Quantity Surveyors
Ministry of Housing, Water, Transport and Works
Statistical Institute of Jamaica – Administrative Statistics Division – External Trade Unit
Economic Accounting Division - Sales from Production Worksheet – Manufacture, Mining & Quarrying, Agriculture and Business Services
Administrative Options: Newspaper, VAT Database

5. Background III Local Commodity Flow
This is compiled using data on local production obtained from the production approach.
Imported Commodity Flow
For national accounts purposes, the Harmonized Commodity Description and Coding System (HS) used in the foreign trade statistics in respect of imports and exports of merchandise is converted to the Standard International Trade Classification (SITC), Rev. 4.
cont’d

6. Background IV Imported Commodity Flow cont’d
All imported goods (classified by SITC) are assigned an end-use, based on whether they are used as
- consumer goods
- raw material or
- capital goods.
Account is taken of any item having more than one end use.
This end use assignment is based on the United Nation’s Classification by Broad Economic Categories (BEC).
The process of assigning end use classification involved a working committee which included representatives from the Customs Department.
The estimation process takes account of only those goods classified as capital goods. It is estimated by type of capital goods and not by industry.

7. Background III Disaggregation of Capital Goods Construction Buildings
Other Structures
Transport equipment
Motor Cars
Trucks and Buses
Other Transport Equipment
Other Machinery & Equipment
Agricultural Machinery & Equipment
Industrial Machinery & Equipment
Other machinery & Equipment
Other Capital Goods & Intangible Fixed Assets

8. Estimation Process
For each type of capital construction good, allocations are made to:
- capital and
- maintenance
This is added to get Construction Gross Output
Distribution and installation margins are applied to the allocated values for capital and maintenance

9. How is this related to International Trade in Services?
Mode 3 – commercial presence or FATS
Some of the variables needed for the compilation of the FATS (Foreign Affiliates Trade in Services) table are derived from the estimation of Value added
Priority variables
-sales turnover and/or output
-employment
-value added
-exports and imports of goods and services
-number of enterprises
Long-term variables
-assets
-compensation of employees
-net worth
-net operating surplus
-gross fixed capital formation
-taxes on income
-research and development expenditure
-purchases of goods and services

10. Economic Accounting Division
The End
Economic Accounting Division