African Centre for Statistics United Nations Economic Commission for Africa Handbook on Supply and Use Table: Compilation, Application, and Good Practices Chapter 01 - Concepts, features and applications of SUT

African Centre for Statistics Outline of Presentation Commodity flow approach Supply and uses tables Structure of the supply table Structure of the uses table Features of SUTs Uses/Applications of SUTs and Commodity flows Comments and suggestions Questions for discussion

African Centre for Statistics Commodity flow approach In the commodity flow approach, detailed flows are compiled for individual products or for a group of products that trace the different sources of supply of products to their subsequent use under various categories.

African Centre for Statistics Commodity flow approach: adjusted equation However, the two sides are generally on different valuations: supply side at basic prices and use side at purchasers’ prices. Therefore it is necessary to make adjustments so that both sides have the same valuations.

African Centre for Statistics Supply and uses tables SUTs are a generalization of the commodity-flow approach for the whole range of products in the economy The SUTs combine the product balances of all individual products or group of products in a matrix framework SUTs present a coherent picture of supply and uses of both the individual products and the whole economy. A SUT is composed of tow tables: –The supply table –The uses table

African Centre for Statistics Structure of the supply table ….

African Centre for Statistics Structure of the uses table ….

African Centre for Statistics Features of SUTs: data consistency The SUT framework combines all three approaches of estimating GDP by balancing the supply and use of every product (or group of products) and brings together all the data in a single framework, thus leaving no scope for statistical discrepancy. The SUTs framework, therefore, enables to cross-check information at a very detailed level, replacing doubtful data, estimating missing information and ensures consistency in the GDP estimates.

African Centre for Statistics Features of SUTs: structure and statistical unit The tables of SUTs have values of commodities in rows and industries as columns. SNA recommends CPC for classifying the products and ISIC for classifying the industries. Countries may choose the level of details of products and industries to be included in their SUTs on the basis of availability of detailed data at industry/product level in their countries. The statistical units for the SUTs are the establishments.

African Centre for Statistics Features of SUTs: valuation The supply table gives information about the resources of goods and services. The supply table is a product by industry table with products in the rows and industries in the columns The supply table is generally at basic prices However, to bring this table to the valuation at purchasers’ prices, valuation columns of transport costs, wholesale and retail trade margins and product taxes less product subsidies are added.

African Centre for Statistics Features of SUTs: the uses table The use table gives information on the uses of goods and services, and on cost structures of the industries. A use table shows the use of products by type of use, i.e. as intermediate consumption by industry, final consumption, gross capital formation or exports. A use table also shows the components of value added by industry, i.e. compensation of employees, other taxes less subsidies on production, consumption of fixed capital and net operating surplus,

African Centre for Statistics Features of SUTs : information given by the use table In the use table: The table of intermediate use shows the intermediate consumption by products and by industry. The table of final uses shows the uses of products for final consumption, gross capital formation and exports The table of value added shows the components of value added by industry. The totals of each of the columns of intermediate and final uses show total use by all products. The totals of the rows of intermediate table and the use of value added table for each industry shows the total inputs by industries.

African Centre for Statistics Features of SUTs : aggregates derived from the use table The use table provides data on: Gross value added at basic prices by industry (production approach) Breakdown of industry-wise gross value added into income components of compensation of employees, operating surplus (plus mixed income), other taxes less subsidies on production and consumption of fixed capital (income approach) GDP at purchasers’ prices disaggregated by products In the SUT, the row totals of both supply and use tables should match.

African Centre for Statistics Features of SUTs: rows and columns consistency In the SUTs, the row totals of both supply and use tables should match. The column totals of industries, which refer to total output by industries in the supply table must also be consistent with total inputs by industries in the use table.

African Centre for Statistics Uses/Applications of SUTs and Commodity flows GDP estimation Product balances Consistency of definitions and classifications, valuations standards Estimation of missing data Confrontation of data sources Assessment of data requirements for NA compilations

African Centre for Statistics Uses/Applications of SUTs and Commodity flows (cont.) Capacity building on National Accounts Implementation of 1993 SNA SUTs in the 2011 International Comparison Program Updating preliminary estimates Construction of Input-Output tables

African Centre for Statistics Suggestions and comments Good overview of SUTs and their uses Give an idea of how to conduct a readiness assessment for compiling SUTs Give an overview of the practical steps to compile a SUT to introduce coming chapters (diagram)

African Centre for Statistics Questions for discussion What are the resource requirements for compiling SUTs? What are the most common difficulties faced by countries trying to compile SUTs? Does the use of specific software (such as ERETES) significantly reduce the cost of compiling SUTs?

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