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Gross Fixed Capital Formation Concepts Concepts Total value of acquisitions, less disposals, of fixed assets during the accounting period, plus certain.

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Presentation on theme: "Gross Fixed Capital Formation Concepts Concepts Total value of acquisitions, less disposals, of fixed assets during the accounting period, plus certain."— Presentation transcript:

1 Gross Fixed Capital Formation Concepts Concepts Total value of acquisitions, less disposals, of fixed assets during the accounting period, plus certain additions to the value of non-produced assets owing to the productive activity of institutional units. Total value of acquisitions, less disposals, of fixed assets during the accounting period, plus certain additions to the value of non-produced assets owing to the productive activity of institutional units. Fixed assets are tangible or intangible assets which are produced as outputs from production processes and which are themselves used repeatedly or continuously in other production processes for more than one year. Fixed assets are tangible or intangible assets which are produced as outputs from production processes and which are themselves used repeatedly or continuously in other production processes for more than one year.

2 Tangible Fixed Assets Acquisitions, less disposals, of new and existing tangible fixed assets, sub-divided by type of asset into: Acquisitions, less disposals, of new and existing tangible fixed assets, sub-divided by type of asset into: Dwellings; Dwellings; Other buildings and structures; Other buildings and structures; Machinery and equipment; Machinery and equipment; Cultivated assets – trees and livestock - that are used repeatedly or continuously to obtain products such as fruit, rubber, milk, etc. Cultivated assets – trees and livestock - that are used repeatedly or continuously to obtain products such as fruit, rubber, milk, etc.

3 Intangible Fixed Assets Aquisitions, less disposals of new or existing intangible fixed assets, sub- divided by type of asset into: Aquisitions, less disposals of new or existing intangible fixed assets, sub- divided by type of asset into: Mineral exploration; Mineral exploration; Software; Software; Entertainment, literary or artistic originals; Entertainment, literary or artistic originals; Other intangible fixed assets. Other intangible fixed assets.

4 Others Major improvements to non-produced tangible assets, including land. Major improvements to non-produced tangible assets, including land. Costs of transfers of ownership of produced and non- produced assets. Costs of transfers of ownership of produced and non- produced assets.

5 Three main categories: Three main categories: Residential Construction Residential Construction Non-Residential Construction Non-Residential Construction Machinery and Equipment Machinery and Equipment Gross Fixed Capital Formation Business and Government

6 Business Residential Construction Millions of dollars New Construction Alterations and Improvements Transfer Costs Total

7 Singles, doubles, rows and apartments – (Work-put-in-place) Singles, doubles, rows and apartments – (Work-put-in-place) housing starts – Central Mortgage and Housing Corporation ( CMHC ) housing starts – Central Mortgage and Housing Corporation ( CMHC ) average value of building permits – Building Permits Survey average value of building permits – Building Permits Survey work put in place coefficients work put in place coefficients New Residential Construction

8 Other New Construction Cottages, mobile homes and conversions Cottages, mobile homes and conversions Building Permits Survey Building Permits Survey Supplementary costs Supplementary costs Goods and services Tax Provincial Sales Tax Land developer fees Other supplementary costs Data published on a monthly basis by Investment and Capital Stock Division ( ICSD)

9 Alterations and Improvements Included are all works that improve the quality of the dwelling and extend its service life Included are all works that improve the quality of the dwelling and extend its service life e.g. - replacement of carpets - replacement of roof - replacement of roof - installation of fixed electrical home appliances - installation of fixed electrical home appliances Repair work is recorded in personal consumer expenditures under services. Repair work is recorded in personal consumer expenditures under services.

10 Alterations and Improvements (Annual Estimates) National and provincial annual estimates National and provincial annual estimates Renovation expenditures undertaken by: Renovation expenditures undertaken by: Owner – occupants Landlords Cottage owners Renters Survey of Household Spending –SHS Survey of Household Spending –SHS Homeowners Repairs and Renovations Survey - HRRS Homeowners Repairs and Renovations Survey - HRRS

11 FAMEX /SHS – Family Expenditure Survey or Survey of Household Spending HRRS – Homeowners Repair and Renovations Survey (discontinued in 2002) IEAD – SNA estimate

12 Building permits for renovations (source: ICSD ) Building permits for renovations (source: ICSD ) Sales of building materials such as Sales of building materials such as building supplies, building supplies, metal products, metal products, lumber and millwork. lumber and millwork. ( source: Wholesale Trade Survey ) And information for home furniture stores, home centres and hardware stores and other building material and garden equipment dealers. (source: Retail Trade Survey ) And information for home furniture stores, home centres and hardware stores and other building material and garden equipment dealers. (source: Retail Trade Survey ) Alterations and Improvements (Quarterly Sources)

13 Annual sources of data: Annual sources of data: Real Estate Agents and Brokers Survey Real Estate Agents and Brokers Survey Multiple Listing Service – MLS Multiple Listing Service – MLS Survey of Household Spending – SHS Survey of Household Spending – SHS Quarterly source Quarterly source Multiple Listing Service – MLS Multiple Listing Service – MLS the number of units sold and the number of units sold and the average sale price. the average sale price. Ownership Transfer Costs

14 Deflation New residential construction New residential construction New House Price Index – NHPI excluding land (Prices Division) New House Price Index – NHPI excluding land (Prices Division) Single family dwellings Single family dwellings Semi-detached dwellings Semi-detached dwellings Row houses Row houses Apartment Building Construction Price Index Apartment Building Construction Price Index Apartments Apartments

15 Alterations and Improvements: Alterations and Improvements: Renovations Price Index (estimated in IEAD) Renovations Price Index (estimated in IEAD) Cost of Labour ( 60% ) ( Survey of Employment, Payrolls and Hours) Cost of Labour ( 60% ) ( Survey of Employment, Payrolls and Hours) Cost of Materials ( 40% ) ( Materials by type such as lumber, pipes, etc. ) Cost of Materials ( 40% ) ( Materials by type such as lumber, pipes, etc. ) Transfer Costs Transfer Costs Indexed average selling price of existing homes sold from Multiple Listing Services (MLS) Indexed average selling price of existing homes sold from Multiple Listing Services (MLS) Deflation

16 Non-Residential Construction New non-residential construction (work put in place) New non-residential construction (work put in place) Additions and major renovations Additions and major renovations Conversions and alterations that extend the life of an existing asset Conversions and alterations that extend the life of an existing asset Transfer costs Transfer costs Capitalized costs (architectural, legal and engineering fees and interest) Capitalized costs (architectural, legal and engineering fees and interest)

17 Total Non-residential Construction Millions of Dollars Buildings Engineering Highways Railways Other engineering Total

18 Business & Public Administrations Two categories Two categories Building construction Building construction e.g. hotels, office buildings, railway stations, schools and shopping centres Engineering construction Engineering construction e.g. bridges, roads, highways, waterworks, sewage systems,, oil well drilling, mine development, railway tracks, etc. e.g. bridges, roads, highways, waterworks, sewage systems, airports, transmission lines, oil well drilling, mine development, railway tracks, etc.

19 Annual sources of data Input/Output tables Input/Output tables Capital Expenditure Survey (CES), Actual, Preliminary and Intentions Estimates Capital Expenditure Survey (CES), Actual, Preliminary and Intentions Estimates Quarterly projectors and related indicators Quarterly projectors and related indicators Quarterly sources of data There is no quarterly survey. There is no quarterly survey. Related indicators are used to measure non-residential construction for the current year. Related indicators are used to measure non-residential construction for the current year. Sources of Data

20 Total Construction Activity is obtained by combining data on: Material costs (shipments - exports + imports + inventories) Material costs (shipments - exports + imports + inventories) + Labour costs (employment, hours and average earnings) + Labour costs (employment, hours and average earnings) + Overhead costs and profits + Overhead costs and profits = Total value of construction activity = Total value of construction activity - Estimates of residential construction (New Construction, A&I) - Estimates of residential construction (New Construction, A&I) + Value added in oil and gas drilling + Value added in oil and gas drilling = Value of spending on non-residential construction = Value of spending on non-residential construction Global Approach

21 Non Residential Construction Resulting estimates are compared with annual estimates from the Capital Expenditure Survey and the survey by asset type Resulting estimates are compared with annual estimates from the Capital Expenditure Survey and the survey by asset type Quarterly estimates are benchmarked during the annual revision cycle Quarterly estimates are benchmarked during the annual revision cycle Annual estimates reflect the most recent data from Input-Output tables Annual estimates reflect the most recent data from Input-Output tables

22 Detailed approaches I. Buildings: Institutional, industrial and commercial non-residential construction (ICSD) based on monthly building permit values and monthly work put in place (WPIP) coefficients The monthly Building Permits Survey of Canadian municipalities collects data on the value of construction intentions for buildings in the non-residential sector and the number of dwellings authorized and value of construction projects in the residential sector. The monthly Building Permits Survey of Canadian municipalities collects data on the value of construction intentions for buildings in the non-residential sector and the number of dwellings authorized and value of construction projects in the residential sector. The WPIP coefficients measure, by quarter of start, by province and by type of building, the volume of work normally executed in each construction period. The WPIP coefficients measure, by quarter of start, by province and by type of building, the volume of work normally executed in each construction period.

23 Detailed Approaches II. Engineering: Highways: Highways: Material costs based on asphalt sales in cubic metres * Industry Product Price Index (IPPI) for asphalt Material costs based on asphalt sales in cubic metres * Industry Product Price Index (IPPI) for asphalt Labour costs (SEPH) Labour costs (SEPH) Railways: Railways: Material costs (e.g. ties, sand, stone, steel, etc.) Material costs (e.g. ties, sand, stone, steel, etc.) Labour costs (SEPH) Labour costs (SEPH)

24 Detailed Approaches Other engineering Material costs iron and steel pipes, other metal building products, wires and cables, concrete products, prefabricated metal structures, glass products, etc. Labour costs based on estimates of Hours Average weekly earnings Number of employees. Information based on Labour Force Survey ( LFS ) and Survey of Employment, Payrolls and Hours ( SEPH )

25 Non Residential Construction Other information used: Construction estimates reported in the Quarterly Survey of Financial Statistics for Enterprises (large companies in mining, telecommunications, railways…etc.) Capital spending by provincial electric utilities – Public Institutions Division Monthly GDP Cubic metres drilled in the oil and gas industry – Industry Accounts Division – Monthly GDP Department of Natural Resources (general exploration expenditures ) Department of Natural Resources (general exploration expenditures )

26 Non-Residential Building Construction Price Indexes (commercial, industrial and institutional) – Prices Division Non-Residential Building Construction Price Indexes (commercial, industrial and institutional) – Prices Division The Non-residential Building Construction Price Index (NRBCPI) is a quarterly series measuring the changes in contractors' selling prices of non-residential building construction (i.e. commercial, industrial and institutional) The Non-residential Building Construction Price Index (NRBCPI) is a quarterly series measuring the changes in contractors' selling prices of non-residential building construction (i.e. commercial, industrial and institutional) Deflation Buildings

27 Deflation Engineering In the absence of output price indexes – Input price indexes are constructed in IEAD: In the absence of output price indexes – Input price indexes are constructed in IEAD: Material costs: Material costs: IPPI for prefabricated metal building and structure, line pipe, other insulated wires and cables, concrete basic products, sand, stone, ready-mix concrete, etc. IPPI for prefabricated metal building and structure, line pipe, other insulated wires and cables, concrete basic products, sand, stone, ready-mix concrete, etc. Labour costs: Labour costs: Average weekly earnings (SEPH) Average weekly earnings (SEPH) Overhead costs: Overhead costs: Average weekly earnings indexes and consumer price indexes Average weekly earnings indexes and consumer price indexes

28 Machinery and Equipment Spending on durable and tangible goods that have a productive life of one year or more (whether owned or leased) i Spending on durable and tangible goods that have a productive life of one year or more (whether owned or leased) including: purchase, construction and installation costs feasibility studies, tooling, progress payments exploration and development costs net portion of used assets

29 Business Machinery and Equipment Furniture Agricultural Machinery Industrial Machinery Computers Software Automobiles Trucks Other transportation Telecommunication Other Total

30 Sources of Data (Annual) Benchmark data are from the final demand matrix of the Input-Output tables (IOT). Benchmark data are from the final demand matrix of the Input-Output tables (IOT). Current estimates are based on the Capital Expenditures Survey Actual, Preliminary and Intentions of Investment and Capital Stock Division and Current estimates are based on the Capital Expenditures Survey Actual, Preliminary and Intentions of Investment and Capital Stock Division and The sum of the quarterly estimates coming from a Supply Disposition approach. The sum of the quarterly estimates coming from a Supply Disposition approach.

31 Sources of Data (Quarterly) Supply / Disposition model: Supply / Disposition model: GFME = GO + M – X + change in inventories, where GO - gross output estimated using shipments GO - gross output estimated using shipments M - imports from International Trade Division X - exports from International Trade Division X - exports from International Trade Division Done at a very detailed level (39 groups), such as for Done at a very detailed level (39 groups), such as for Telecommunication equipment Telecommunication equipment Telephone and related equipment including facsimile Telephone and related equipment including facsimile Broadcasting and radio communication equipment Broadcasting and radio communication equipment Radar & radio navigation equipment Radar & radio navigation equipment ( Re. Supply/disposition models sent to the NBS on March 2007 )

32 Sources of Data (Quarterly) Industrial machinery Industrial machinery Machine tools Machine tools Conveyors, elevators & hoisting machinery Conveyors, elevators & hoisting machinery Packaging and bottling machinery Packaging and bottling machinery Construction & mining machinery Construction & mining machinery Logging, pulp & paper industry machinery Logging, pulp & paper industry machinery Power generation & marine prop., non-electric Power generation & marine prop., non-electric Electrical generators & motors Electrical generators & motors

33 Sources of Data (Quarterly) Other transportation equipment Other transportation equipment Aircraft Aircraft Commercial trailers & semi-trailers Commercial trailers & semi-trailers Truck & bus bodies & cargo containers Truck & bus bodies & cargo containers Locomotive, railway & urban trans. rolling stock Locomotive, railway & urban trans. rolling stock Ships, boats & parts, excl. pleasure Ships, boats & parts, excl. pleasure And other groups And other groups

34 Investment in Cars and Trucks A more direct approach is used to estimate investment in cars and trucks: A more direct approach is used to estimate investment in cars and trucks: Total sales by type from Survey of New Motor Vehicle Sales Total sales by type from Survey of New Motor Vehicle Sales Government and business shares based on data from Motor Vehicles Manufacturers Association. Government and business shares based on data from Motor Vehicles Manufacturers Association.

35 Software Investment Own account software Own account software Pre-packaged software Pre-packaged software Custom-design software Custom-design software Own-account software ( software developed by in-house employees to meet specific organization needs ) is based on the labour costs of computer programmers and system analysts and other costs (non-salary) of in-house software development. Own-account software ( software developed by in-house employees to meet specific organization needs ) is based on the labour costs of computer programmers and system analysts and other costs (non-salary) of in-house software development. Investment in pre-packaged and custom-design software is estimated residually (domestic production, plus imports, plus margins, less exports, less personal expenditure). Investment in pre-packaged and custom-design software is estimated residually (domestic production, plus imports, plus margins, less exports, less personal expenditure).

36 Deflation Machinery and equipment price indexes (MEPIs) are used for all commodities except computers and software. The MEPI tracks price movements on a domestic and imported basis (producer price indexes published by the U.S. Bureau of Labor Statistics are used for the import component). Machinery and equipment price indexes (MEPIs) are used for all commodities except computers and software. The MEPI tracks price movements on a domestic and imported basis (producer price indexes published by the U.S. Bureau of Labor Statistics are used for the import component). The Machinery and Equipment Price Index (MEPI) provides quarterly estimates of price changes for machinery and equipment purchases, relative to annual gross additions to capital by Canadian Industry of purchase. The Machinery and Equipment Price Index (MEPI) provides quarterly estimates of price changes for machinery and equipment purchases, relative to annual gross additions to capital by Canadian Industry of purchase.

37 Deflation The deflator for computers is a weighted average of import and export computer price indexes. The deflator for computers is a weighted average of import and export computer price indexes. Own-account software is deflated using a fixed weighted average of hourly earnings of programmers and systems analysts and an index of costs of non- labour inputs. Own-account software is deflated using a fixed weighted average of hourly earnings of programmers and systems analysts and an index of costs of non- labour inputs. The Commercial Software Price Index from Prices Division is used to deflate pre-packaged software. The Commercial Software Price Index from Prices Division is used to deflate pre-packaged software. Custom-design software is deflated using a weighted average of the pre- packaged and own-account price indexes. Custom-design software is deflated using a weighted average of the pre- packaged and own-account price indexes.

38 Total Investment on Plant and Equipment, 2005


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