1. Arthur Berger GDP by Final Expenditure, Shenzhen, China, 25-29 April 2011 Estimation of Changes in Inventory in the Canadian SNA

2. 14/11/2015 Statistics Canada Statistique Canada 2 Outline 1.Accounts that include changes in inventory in the Canadian SNA 2.Revision cycle 3.Quarterly estimation in nominal terms 4.Annual estimation in nominal terms 5.Deflation

3. 14/11/2015 Statistics Canada Statistique Canada 3 Accounts that include changes in inventory in the Canadian SNA  Supply-Use accounts (annual)  Expenditure based GDP in the Income and Expenditure accounts (quarterly)

4. 14/11/2015 Statistics Canada Statistique Canada 4 Revision cycle Annual revisions  Once a year, quarterly IEA are revised going back 3 years to align with the most recent supply-use tables Sub-annual revisions  Between annual revisions, quarterly IEA is revised within the most recent reference year only

5. 14/11/2015 Statistics Canada Statistique Canada 5 Revision cycle: GDP by final expenditure Quarterly IEAannual supply-use Jan-11 Feb-11Q1/2010 - Q4/2010 Mar-11 Apr-11 2008 GDP C$ May-11Q1/2008 - Q1/2011 Jun-11 Jul-11 Aug-11Q1/2011 - Q2/20112008 GDP K$ Sep-11 Oct-11 2008 detail Nov-11Q1/2011 - Q3/2011 Dec-11

6. 14/11/2015 Statistics Canada Statistique Canada 6 Revision cycle: GDP by final expenditure 201020092008 Feb-20111st annual estimate May-20112nd annual estimate3rd annual estimatefinal annual estimate May-20123rd annual estimatefinal annual estimate May-2013final annual estimate

7. 14/11/2015 Statistics Canada Statistique Canada 7 Quarterly estimation in nominal terms  Businesses Farms Other businesses  Government (very small inventories)

8. 14/11/2015 Statistics Canada Statistique Canada 8 Quarterly estimation: Farm  Grain held on farms (8 categories)  Other inventories held on farms (8 categories)  Grain in commercial channels (1 category)

9. 14/11/2015 Statistics Canada Statistique Canada 9 Quarterly estimation: Farm  Data sources Surveys : market prices and farm-held inventories (tonnes or head count) Canadian Wheat Board and the Canadian Grain Commission: prices and level of inventories (tonnes) for grain in commercial channels

10. 14/11/2015 Statistics Canada Statistique Canada 10 Quarterly estimation: Non-farm businesses  categories 23 manufacturing industries x 4 types 19 retail industries 16 wholesale industries 7 other

11. 14/11/2015 Statistics Canada Statistique Canada 11 Quarterly estimation: Non-farm businesses  Data sources: inventory book values manufacturing, retail, wholesale: monthly surveys Mining, transportation, telecom: Quarterly survey of financial statements Utilities: survey of utilities Gold, logging: production, exports, imports, (& reserves for gold) Construction, finance: projection of annual data

12. 14/11/2015 Statistics Canada Statistique Canada 12 Quarterly estimation: Non-farm businesses  Data sources: prices Manufacturing: Industrial Product Price Indices Retail: Consumer Price Indices Wholesale: IPPI and import price indices Utilities: Uranium, coal, & natural gas prices; machinery & equipment price index electrical utilities

13. 14/11/2015 Statistics Canada Statistique Canada 13 Quarterly estimation: Non-farm businesses The 6 steps for calculating investment in non-farm inventories 1. CBV e Reported current dollar book values of inventories at the end of the period. 2. DEF e Deflator of book values at the end of the period. 3. KBV e = CBV e ÷ DEF e Constant dollar book values of inventories at the end of the period. 4. KVPC t = KBV e - KBV e-1 Constant dollar value of physical change for period t. 5. REV t Revaluer of the value of physical change for period t. 6. VPC t = KVPC t × REV t Current dollar value of physical change for period t.

14. 14/11/2015 Statistics Canada Statistique Canada 14 Annual estimation in nominal terms  For most industries: annual figures are derived by adding up the sub annual estimates.  Logging & mining: annual industry surveys  Supply-Use accounts: a model is used to allocate industry inventories to commodities change in inventory may be adjusted to help balance supply versus use  IEA is benchmarked to annual supply use accounts

15. 14/11/2015 Statistics Canada Statistique Canada 15 Deflation The 2 steps for revaluing book value of inventories before applying deflators 1. RBV e = KBV e × REV t Value of inventories at the end of the period, in current dollars, estimated at average prices of the period. 2. RBV b = RBV e - VPC t Value of inventories at the beginning of the period, in current dollars, estimated at average prices of the period.