Supply and Use Tables THE CONTRACTOR IS ACTING UNDER A FRAMEWORK CONTRACT CONCLUDED WITH THE COMMISSION

Introduction The supply and use tables (SUT) are a presentation of the production system, highlighting the relationships between products and branches of the economy. It is based on a breakdown by product and activities of the goods and services account: Resources Uses Output Taxes on products - Subsidies on products Imports Intermediate consumption Final consumption Gross fixed capital formation Changes in inventories Acquisitions less disposals of valuables Exports

Presentation The SUT are presented in the form of 4 blocks:

Breakdown by products When considering a particular product, such as milk, it is necessary to change the goods and services account to take account of trade and transport margins. Indeed, output is valued at basic prices, that is to say by what the producer receives, and uses are valued at purchase prices, that is to say by what buyers pay. Now, between the producer and the buyer, there may be a merchant and a transporter. The price paid by the buyer can thus be broken down into a price paid to the producer, trade and transport margins.

Trade and transport margins A trade margin is the difference between the sale price realised on a good purchased for resale, and the price that would have to be paid by the distributor to replace the good at the time it is sold Transport margins include transportation costs paid separately by the purchaser and are included in the use of products at purchasers’ price but not in the basic price of a manufacturer’s output or in the trade margins of wholesale or retail traders. Transport of goods paid by a manufacturer and not invoiced separately are included in the basic price.

Resources and uses for a product For a specific product we have: Resources Uses Output Taxes on products - Subsidies on products Imports Trade margins Transport margins Intermediate consumption Final consumption Gross fixed capital formation Changes in inventories Acquisitions less disposals of valuables Exports

The supply table The supply table presents in columns the different resources for all the products:

The correction for margins (1) The rows for the products 'trade' and ‘transport' are special. Indeed, the margins of transport and trade appear twice in the supply table, once integrated into the output of goods 'trade' and ‘transport' and once in the column 'margins‘. A correction is therefore necessary to avoid double counting. The trade margin is negative and placed on the intersection of the 'trade' and column 'margins'. The same correction is made for transport.

The correction for margins (2) Example:

The use table The use table presents in columns the different uses for all the products:

CIF / FOB adjustments (1) The breakdown by imports of the products is only available by the customs statistics that assess imports not by their price at the border of the exporting country (FOB) as recommended by the system but by their value to the national border, that is to say, the CIF price. In the SUT, imports by products are measured at CIF. A correction is then applied globally to pass from the CIF value of imports to FOB. The same correction is applied to exports.

CIF / FOB adjustments (2) The problem is the cost of transportation and insurance between the border of the exporting country and the national border when provided by residents. Example: The country imports milk, there are margins of transport between the two countries and the transport is provided by a resident.

CIF / FOB adjustments (3) Case 1: FOB recording of imports Case 2: CIF recording

Breakdown by industry The aim here is to examine the production processes and to measure production costs of products . For this we will group the companies producing the same products. The problem is that the same company can produce different products. For example, a transport company may also have a repair activity. The company is therefore not a good statistical unit to study the production process and it is necessary to break it down into more homogeneous units. The local kind-of-activity (local KAU) is the statistical unit used for compiling SUT.

Local KAU The local kind-of-activity unit (local KAU) is the part of a kind of activity unit (KAU) which corresponds to a local unit. A KAU groups all the part of an institutional unit in its capacity as producer contributing to the performance of an activity at class level (four digits) of the NACE rev. 2 and corresponds to one or more operational subdivisions of the institutional unit. The institutional unit’s information system must be capable of indicating or calculating for each local KAU at least the value of production, intermediate consumption, compensation of employees, the operating surplus and employment and gross fixed capital formation.

Industries An industry consists of a group of local KAU engaged in the same, or similar, kind-of-activity. At the most detailed level of classification, an industry consists of all the local KAU falling within a single class (four digits) of NACE Rev. 2 and which are therefore engaged in the same activity as defined in the NACE Rev. 2. All the local KAU of an industry have the same pricipal activity but may have different secondary activities. In the SUT output and intermediate consumption are broken down by industry.

Production matrix Production matrix shows a breakdown by product of the output of different industries:

Intermediate consumption matrix Intermediate consumption of different industries are broken down by product:

Generation of income account The generation of income account is also presented by industry:

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