1. The ABS Industry MFP Database Hui Wei Australian Bureau of Statistics

2. Outline Overview of the ABS Industry MFP Database How key variables are measured Outstanding issues Towards KLEMS model

3. Overview First release of experimental industry MFP database in 2007 The framework of Jorgenson, Gollop and Fraumeni (1987) 12 industries Gross value added MFP estimates span from 1964-65 to 2008-09 Gross output MFP estimates span from 1994- 95 to 2007-08

4. Industry Coverage Agriculture, forestry & fishing Mining Manufacturing Electricity, gas, water & waste services Construction Wholesale trade Retail trade Accommodation & food services Transport, postal & warehousing Information, media & telecommunications Financial & insurance services Arts & recreation services

5. How Variables Are Measured VA, GO and intermediate inputs are measured as chained Laspeyres indexes Tornqvist capital services index based on weighted changes in productive capital stock Labour input is plain hours worked index without accounting for quality factor

6. The Measurement of Intermediate Inputs Intermediate inputs are measured as total intermediate usage in one bundle The constant price measures are derived using high level price deflators Current price intermediate usage is available at detailed commodity level It is feasible to break down intermediate inputs into energy, material and services and derive constant price measures

7. Capital Asset Types Cultivated biological resources Livestock fixed assets Orchards, plantations & vineyards Intellectual property products Computer software R&D Mineral & petroleum exploration Artistic Originals Inventories Machinery & equipment Electrical & electronic equipment Industrial machinery & equipment Other plant & equipment Other transport equipment Road vehicles Land Non-dwelling construction Ownership transfer costs

8. Capital Services Hyperbolic age-efficiency function is used in estimating productive capital stock Rental prices are derived using the framework of Hall and Jorgenson (1967) Rates of return are estimated by using a combination of endogenous and exogenous methods (with CPI + 4% as floor) A small positive number (0.001) is applied in case of negative rental prices

9. Hours worked data are from Labour Force Survey (LFS) Total hours worked is the product of employment number by average hours worked per person Employment number estimates are subject to notable sampling error as LFS not stratified by industry Labour Input

10. Work-in-progress for Labour Input Full Australian Census Data (1981 1986 1991 1996 2001 2006) Key variables: gender, age, education, income, hours worked, number of persons, employee & self- employed, industry Census benchmarks are applied to averages of LFS data to derive annual estimates

11. Annual Average Growth Rates in Value Added Based MFP

12. MFP puzzles for problematic industries Agriculture Mining Electricity, gas & water Robust MFP measures for services industries Increased user demand for MFP measures of education and health sectors Outstanding Issues

13. Likely to be on our forward work program in the near future EU KLEMS Program offers useful short cuts to generate separate volume indexes for energy, material and services for the ABS Product balanced SU tables in constant prices not available at the ABS SU tables are balanced in aggregate to balance GDP measures Towards KLEMS Model