The application of Supply and

Use Tables

Seminar on Developing a programme for the

implementation of the
2008 SNA and supporting statistics
17-19 October 2012
Pretoria, South Africa

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• Double deflation
• Satellite Accounts
• Input – Output tables
• Social Accounting Matrix

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Double deflation

Constant price calculations done in the past:

• Volume index;

• Single deflation

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Double deflation

Volume index

2000 2001 2002 2003 2004 2005

Value added (current) 12,069 16,068 17,464 15,841 16,675 18,178

Production, '000 tonnes 210,907 218,495 220,270 237,846 243,372 244,988

Volume index 95.75 99.19 100.00 107.98 110.49 111.22

Value added (constant) 11,556 15,939 17,464 17,105 18,424 20,218

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Double deflation

Single deflation

2000 2001 2002 2003 2004 2005

Value added (current) 12,069 16,068 17,464 15,841 16,675 18,178

Price index 104.44 100.81 100.00 92.61 90.51 89.91

Value added (constant) 11,556 15,939 17,464 17,105 18,424 20,218

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Double deflation

Current constant price calculations:

• Double deflation.

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Double deflation
Supply of products at basic prices: 2000 (R million)
Total Taxes Trade Total
Output of industries
Supply of supply at less and supply at c.i.f./f.o.b.
products purchasers' subsidies Transport basic Primary Secondary Tertiary Total adjustment
prices on products margins prices industry industry industry industry Imports on imports

Primary products 193,994 943 8,680 184,371 151,452 123 - 151,575 32,796
Secondary products 964,351 62,541 147,124 754,686 4,240 589,265 - 593,505 161,181
Tertiary products 752,681 16,332 (155,804) 892,153 289 31,610 839,997 871,896 36,418 (16,161)
c.i.f./f.o.b. adjustment - - - (16,161) 16,161
Direct purchases residents 15,236 15,236 - 15,236
Total output at basic prices 1,926,262 79,816 - 1,846,446 155,981 620,998 839,997 1,616,976 229,470 -

Use of products at purchasers' prices: 2000 (R million)

Total Taxes Intermediate consumption Compo-
Supply of supply at less by industries nents of
products purchasers' subsidies Primary Secondary Tertiary Total Total final
prices on products industry industry industry industry economy demand

Primary products 193,994 2,748 83,701 1,557 88,006 105,988

Secondary products 964,351 42,772 287,638 116,016 446,426 517,925
Tertiary products 752,681 29,450 52,961 191,892 274,303 478,378
Direct purchases residents 15,236 - 15,236
Direct purchases non-residents - - -
Total uses at purchasers' prices 1,926,262 74,970 424,300 309,465 808,735 1,117,527
Gross value added / GDP 79,816 81,011 196,698 530,532 808,241 888,057
Compensation of employees 34,621 100,291 290,046 424,958 424,958
Tax less sub on products 79,816 - - - - 79,816
Other tax less sub on production 761 2,093 17,335 20,189 20,189
GOS / mixed income 45,629 94,314 223,151 363,094 363,094
Total output at basic prices 155,981 620,998 839,997 1,616,976

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Double deflation
Supply of products at basic prices: 2000 (R million)
Total Taxes Trade Total
Output of industries
Supply of supply at less and supply at c.i.f./f.o.b.
products purchasers' subsidies Transport basic Primary Secondary Tertiary Total adjustment
prices on products margins prices industry industry industry industry Imports on imports

Primary products 193,994 943 8,680 184,371 151,452 123 - 151,575 32,796
Secondary products 964,351 62,541 147,124 754,686 4,240 589,265 - 593,505 161,181
Tertiary products 752,681 16,332 (155,804) 892,153 289 31,610 839,997 871,896 36,418 (16,161)
c.i.f./f.o.b. adjustment - - - (16,161) 16,161
Direct purchases residents 15,236 15,236 - 15,236
Total output at basic prices 1,926,262 79,816 - 1,846,446 155,981 620,998 839,997 1,616,976 229,470 -

Use of products at purchasers' prices: 2000 (R million)

Total Taxes Intermediate consumption Compo-
Supply of supply at less by industries nents of
products purchasers' subsidies Primary Secondary Tertiary Total Total final
prices on products industry industry industry industry economy demand

Primary products 193,994 2,748 83,701 1,557 88,006 105,988

Secondary products 964,351 42,772 287,638 116,016 446,426 517,925
Tertiary products 752,681 29,450 52,961 191,892 274,303 478,378
Direct purchases residents 15,236 - 15,236
Direct purchases non-residents - - -
Total uses at purchasers' prices 1,926,262 74,970 424,300 309,465 808,735 1,117,527
Gross value added / GDP 79,816 81,011 196,698 530,532 808,241 888,057
Compensation of employees 34,621 100,291 290,046 424,958 424,958
Tax less sub on products 79,816 - - - - 79,816
Other tax less sub on production 761 2,093 17,335 20,189 20,189
GOS / mixed income 45,629 94,314 223,151 363,094 363,094
Total output at basic prices 155,981 620,998 839,997 1,616,976

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Double deflation

N CPC
o code CPC_PPI_CPI data from 2000 - 2008
2000 2001 2002 2003 2004 2005 2006 2007 2008
1 01 84.0 91.4 113.6 105.1 104.4 100 119.0 144.4 148.6
2 02 75.5 81.3 92.2 94.3 96.5 100 107.7 119.5 136.6
3 03 98.2 98.2 98.2 98.3 99.1 100 105.0 112.7 126.1
4 04 64.0 71.3 83.9 87.5 87.4 100 118.5 140.1 167.6
5 11 57.9 67.9 77.2 70.1 86.2 100 105.4 115.3 153.4
6 13 69.6 76.5 86.6 81.2 89.4 100 111.0 122.8 139.1
7 14 74.5 80.0 89.5 86.8 92.5 100 119.3 133.8 140.1
8 16 87.4 89.7 102.9 96.1 90.7 100 107.1 117.8 126.7
9 17 90.5 95.5 94.5 93.1 94.7 100 104.5 111.6 135.5
10 18 64.0 71.3 81.4 83.4 89.2 100 112.8 124.2 137.0
11 211 67.8 74.1 94.0 91.6 95.0 100 116.9 126.8 138.8
12 212 79.0 87.1 104.0 103.2 101.5 100 110.2 132.2 140.8
13 213 79.6 84.0 93.0 97.4 98.4 100 103.8 109.3 115.3
14 214 79.6 84.0 93.0 97.4 98.4 100 103.8 109.3 115.3
15 215 78.4 84.3 109.4 109.1 105.7 100 107.1 138.4 212.6
16 22 71.8 77.3 94.5 100.4 100.9 100 104.7 118.7 142.2

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Double deflation
Intermediate consumption
Output of industries
by industries
Primary Primary Primary Primary Primary Primary
2004 2005 2006 2004 2005 2006

Primary products 238,247 259,397 316,161 Primary products 4,032 4,231 5,108
Secondary products 6,004 6,670 8,375 Secondary products 58,349 62,999 77,449
Tertiary products 455 515 638 Tertiary products 53,603 59,096 70,695

244,706 266,582 325,174 115,984 126,326 153,252

Price index Price index

Primary Primary Primary Primary Primary Primary
2004 2005 2006 2004 2005 2006

Primary products 93.7 100.0 114.2 Primary products 93.7 100.0 114.2
Secondary products 97.2 100.0 103.8 Secondary products 97.2 100.0 103.8
Tertiary products 91.5 100.0 110.3 Tertiary products 91.5 100.0 110.3

Intermediate consumption
Output of industries
by industries
Primary Primary Primary Primary Primary Primary
2004 2005 2006 2004 2005 2006

Primary products 254,266 259,397 276,849 Primary products 4,303 4,231 4,473
Secondary products 6,177 6,670 8,068 Secondary products 60,030 62,999 74,614
Tertiary products 497 515 578 Tertiary products 58,583 59,096 64,093

260,940 266,582 285,495 122,915 126,326 143,180

Value added of Primary industries at current prices Value added of Primary industries at constant prices
Output 244,706 266,582 325,174 Output 260,940 266,582 285,495
Interm. consump. 115,984 126,326 153,252 Interm. consump. 122,915 126,326 143,180
Value added 128,722 140,256 171,922 Value added 138,025 140,256 142,315
% change 8.96 22.58 % change 1.62 1.47

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What is a Satellite Account

• Tool developed by the UN and others to measure the size of

economic sectors not defined as industries in typical National
Accounts

• In South Africa we have developed 3 satellite accounts:

– Tourism Satellite Account
– Information and Communication Technology Satellite Account
– Non Profit Institutions Satellite Account

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Supply and Use tables and the Satellite Accounts

• The Supply and Use tables are the ‘backbone’ in the compilation of
any satellite account

• Why?
• We are measuring the contribution of an economic sector
(which is made up of various parts of various industries):
• Output
• minus intermediate consumption
• Equals Value Added
• Plus net taxes
• Equals Gross Domestic Product

• The Supply and Use tables provides the framework to reconcile

demand and supply

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 Example: Tourism Satellite Account

•Tourism is not identified as an industry in the SNA – it is a sector

•Published GDP (the contribution of tourism to the economy is a part of);
• SIC 6
• SIC 7
• SIC 8
• SIC 9

•The tourism sector consists of the following tourism specific industries:

•Hotels, camping sites and other provision (SIC 6410)
•Restaurants, bars and canteens (SIC 6420)
•Railway passenger transportation (SIC 7111)
•Road passenger transportation (SIC 7121 and SIC 7122)
•Water passenger transportation (SIC 7211 and SIC 7220)
•Air passenger transportation (SIC 7300)
•Transport equipment rental (SIC 8511, SIC 8512 and SIC 8513)
•Travel agencies and similar (SIC 7414)
•Cultural services (SIC 9632 and SIC 9633)
•Sport and recreational services (SIC 9612, SIC 9614, SIC 9619, SIC 9641 and SIC 9649)

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Example: Tourism Satellite Account

•Visitors demand certain quantities of these industries and these industries supplies
to both visitors and non visitors

• The Supply and Use tables are the cornerstone to reconcile demand and supply
(integrated framework that incorporates ‘demand side’ and ‘supply side data’).

•From the Supply and Use table we can now calculate the following for tourism:

•Tourism direct gross value added:

The sum of the portions of value added generated by the industries (tourism
industries and other industries) as they respond to tourism consumption

•Tourism direct gross domestic product:

The sum of that part of the GVA (at basic prices) generated by all industries in
response to internal tourism consumption plus the amount of net taxes on products
and imports included within the value of this expenditure at purchasers’ prices

THIS WOULD BE AN ALLMOST IMPOSSIBLE TASK WITHOUT A DETAILED

SUPPLY AND USE TABLE
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Input – Output tables

• Differences between SU-tables and I-O tables

• SU-tables are industry-by-product matrices using both industry

and product classifications

• SU-tables are in the form of two separate tables

• The use table, describing the use of commodities
• The supply tables, describing the supply of commodities

• I-O tables are either product-by-product or industry-by-industry

• Classifications are never mixed (product and industry)

• I-O tables have both supply and use data in a single matrix

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Input – Output tables

• Product by product I-O table:

Products Units of productions Final uses Total
uses

Exports
Agricultural Industrial Services Final Gross
products products consumption capital
formation

Agricultural Intermediate consumption by product and by units of Final uses by products and by Total use
products production category by
Industrial products product

Services

Value added Value added by component and by units of production

Imports for similar Total imports by products

products

Supply Total supply by units of production Total final uses by category

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Input – Output tables

• Industry by industry I-O table:

Industry Industry Final uses Total
uses
Agriculture Industry Service activities Final consumption Gross capital Exports
formation

Agriculture

Industry

Service activities

Value added

Imports of
similar products

Supply

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Input – Output tables

• Four mathematical models can be used:

– Product technology assumption (Model A)
– Industry technology assumption (Model B)
– Fixed industry-output structure assumption (Model C)
– Fixed product-output structure assumption (Model D)
• Product by product
– Product technology assumption (Model A)
– Industry technology assumption (Model B)
• Industry by industry
– Fixed industry-output structure assumption (Model C)
– Fixed product-output structure assumption (Model D)

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Input – Output tables

• Compilation steps

• Conversion of SU-tables to square SU-tables

• Square SU-tables need to be balanced without a discrepancy

• The square use table must be converted to basic prices

•
• Application of either Model A, B, C, D to square SU-table

• The resultant use table needs to be balanced

• I-O table formed from the balance use table

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SAM

What is a Social Accounting

Matrix
• IEA in matrix format
• Elaborate of the linkages between the supply and
use tables and institutional sectors
• More detailed classification of sectors and
transactions

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SAM
Social Accounting Matrix: NAM
II.1.1. Generation II.1.2. Allocation II.2. Secondary II.4. Use of Fixed
Goods and of income of primary distribution of income III.1. Capital capital III.2. Financial
Account services I. Production (value added income (instit- income (instit- (institutional (institutional formation (financial V. Rest of the world
(classification) (products) (industries) categories) tutional sectors) tutional sectors) sectors) sectors) (industries) assets) II. Current III.1. Capital Total
Goods and
services
(products)
Production
(industries)
Generation of
income
(value added
categories)
Allocation of
primary

>
income
(institutional
sectors)
Secondary

USES
distribution of
income
< RESOURCES >
(institutional
sectors)
Use of
income
(institutional

<
sectors)
Capital
(institutional
sectors)
Fixed capital
formation
(industries)
Financial
(financial
assets)
Rest of the
world,
current

Rest of the
world,
capital
Total

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 SAM
National Accounting Matrix
Integrated II.1.1. Generation II.1.2. Allocation II.2. Secondary II.4. Use of dispo-
Economic 0. Goods and of income of primary distribution of sable income III.1. Capital III.2. Financial V. Rest of the world
Account services I. Production (race and income (instit- income (instit- (race and (financial Residual TOTAL

(classification) (products) (industries) occupations) tutional sectors) tutional sectors) percentiles) intermediaries) II. Current III.1. Capital
Code 1 2 3 4 5 6 7 8 9 10 11 12

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THE END

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