NATIONAL ACCOUNTS
Gross Fixed Capital
Formation
Kevin Naidoo
Seminar on Developing a programme
for the implementation of the
2008 SNA and supporting statistics
17-19 October 2012
Pretoria, South Africa
Gross Fixed Capital Formation
Gross Fixed Capital
Formation
=
Private Sector
Public Corporations
General Government
2
Gross
Gross
Fixed
Capital
Capital
Formation
Formation
Domestic fixed investment on new assets
– according to institution
• Private businesses and households
• Public corporations
• General government
– according to economic activity
– according to asset type
•
•
•
•
•
•
•
Residential buildings
Non-residential buildings
Construction works
Transport equipment
Computers and related equipment
Machinery and equipment
Transfer costs
3
Gross
Gross
Fixed
Capital
Capital
Formation
Formation
Benchmark year
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–
–
–
–
Comprehensive revisions of national accounts estimates are
necessary in order to incorporate four major types of
improvements:
Changes in definitions and classification to portray
developments in the South African economy more accurately.
Statistical changes to reflect the introduction of new and
improved methodologies, and the incorporation of newly
available and revised source data.
Changes in presentation to reflect the changes in definitions
and the statistical changes.
Rebasing the estimates at constant prices, by moving the base
period to a more recent year so that volume indicators reflect
the current structure of the economy more accurately
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Collection of data
Private sector
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Agriculture
Info from Department of Agriculture
Mining
N01’s, QFS, Chamber of mines, Interim financial reports,
Annual financial statements
Manufacturing
N01’s , QFS (extrapolation is used)
Electricity, gas and water
N01’s , Interim financial reports, Annual financial statements
Construction
N01’s , QFS (extrapolation is used)
Trade
N01’s, QFS (extrapolation is used)
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Collection of data - continued
Private sector – continued
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Transport and communication
BOP imported ships and aircrafts, commercial vehicles sold,
N01’s, interim reports
Finance
Monthly sample survey of buildings statistics from Stats SA
(4 months moving average for houses and 9 months moving
average for flats , offices, etc)
BA900 from Money and banking division is used to get
information for banks
Insurers data is obtained from Capital market and flow of
funds division
Transfer costs information is obtained from transfer duties
compiled by Capital market and flow of funds division
Real estate and business services data is obtained from QFS
(extrapolation is used)
Services
QFS (extrapolation is used)
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Collection of data- continued
Public corporations
 Overall N01 information
Verification
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F04 for quarterly estimates
Annual surveys of the corporations
conducted by the National accounts
Annual reports mainly from all the
corporations that are included in the N01
survey
7
Collection of data- continued
General government
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Information from Public finance division
Verification
Statistics Releases from StatsSA such as:
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Actual and Expected Capital Expenditure by the Public
Sector: P9101.1
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Consolidated Expenditure by the General Government
Sector: P9119.4
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National Government Expenditure: P9119.3
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Provincial Government Expenditure: P9121
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Financial Statistics of local authorities: P9114
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Process of estimation
Residential
buildings
Agric
Non- Res
Construction
Transport
Computer
equipment
Machinery
Total
902
885
2,199
1,215
549
5,339
11,090
1,588
3,898
19,783
2,985
1,487
24,802
54,545
0
8,222
8
1,349
4,006
69,179
82,765
10
175
73,022
1,212
163
2,335
76,916
Construction
0
314
0
4,031
155
7,245
11,745
Trade
0
7,690
30
8,663
3,450
16,913
36,746
Transport
0
3,195
27,609
38,550
5,826
19,578
94,757
Finance
47,419
13,868
220
10,347
6,962
8,718
87,534
Services
4,105
17,141
51,624
6
3,840
10,578
87,294
55,388
174,495
68,358
26,438
Mining
Manufacturing
Electricity
Total
54,024
164,687 543,392
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Process of estimation - continued
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Residential buildings
Cement sales
BER
Non-residential buildings
Cement sales
BER
Construction works
Cement sales
BER
Transport equipment
Sales of commercial vehicles
Computers, machinery and other equipment
Imports of machinery (BOP)
Financial lease indication - intentions for capex
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Judgemental estimations
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Budget review for public corporation
projects
Nedbank capital expenditure project
listing
Buildings plans passed trend
Engineering news
Mining weekly
Creamer Media’s Research Channel
Trend of credit extended to companies
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Deflation
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Residential buildings
Joint Building Contracts Committee (JBCC) Contract Price
Adjustment Provision Work Groups Indices published by Statssa
(PO151)” - item 180 “lump sum domestic buildings
Non-residential buildings
Joint Building Contracts Committee (JBCC) Contract Price
Adjustment Provision Work Groups Indices published by Statssa
(PO151)” - item 181 “Commercial/industrial buildings”
Construction works
Safcec ‘s combination of indices i.e. for labour, materials, plant and
fuel.
Incorporate three other indices form the PPI P0142.1 published by
Stats SA, namely building and construction, electrical engineering
and mechanical engineering.
Certain components form the JBCC publications that are related to
construction activities i.e. earthworks, concrete (excluding formwork),
formwork, reinforcement, roadwork and mechanical services
Transport equipment
Statssa’s producer price index – P0142.1
Computer equipment
Statssa’s producer price index – P0142.1
Machinery and other equipment
Statssa’s producer price index – P0142.1
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Consumption of fixed capital
The consumption of fixed capital can be defined as the decline in the
current value of the stock of fixed assets owned by a producer as a result of
physical deterioration or normal accidental damage
Estimates are based on a straight-line method

 1
WV t =  [ I n ]  *
n
 n
Type of asset
Sector
Residential buildings
Non-residential buildings
Construction works
Lifetime
50 years
50 years
Agriculture
80 years
Mining
30 years
General government
Other
Transport equipment
80 years
50 years
8 years
Computer equipment
5 years
Machinery & other
equipment
Manufacturing
8 years
Mining & Electricity, gas 16 years
and water
Other
10 years
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Fixed capital stock
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Fixed capital stock is the accumulation of gross fixed
capital formation over a particular period less
consumption of fixed capital.
For a certain period
KVRt = KVRt-1 + IVSt - WDEt
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Where KVR = Capital stock
IVS = Gross fixed capital formation
WDE = Consumption of fixed capital
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Thank You
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