NOTES ON METHODOLOGY
Supply and use tables and symmetric input-output table
Supply and use tables and the symmetric input-output tables are a part of the input-output system, which is an integral part of
national accounts. They present in detail the production process (cost structure, generation of income and employment), goods and
services flows (production, import, export, final consumption, intermediate consumption and gross investments) in the system of
national accounts. The starting point is supply and use tables, which are constructed on the basis of statistical data from different
sources. The symmetric input-output tables are derived from the supply and use tables.
The supply table shows the total supply of goods and services from the domestic production and imports. The production is defined
at basic prices, which means that the valuation of the production of each product excludes distribution margins (trade and transport)
and other taxes on products, while it includes other subsidies on products. The valuation of imports should be compatible with that
of production, which is the reason why imports are valued at CIF prices. The two components, production and imports, give the
total resources at basic prices. The supply table also gives the total resources valued at purchasers’ prices, obtained by adding
distribution margins (trade and transport) and taxes minus subsidies on products to the resources at basic prices.
The use table shows the intermediate consumption by products and industry, the use of products for final consumption, the gross
capital formation, exports and the components of value added (compensation of employees, other taxes less subsidies on
production, net operating surplus and consumption of fixed capital) by activities. The use of goods and services for intermediate
consumption and final consumption is valued at purchasers’ prices, which means the prices paid by the purchaser.
Two identities are to be obseved for the supply and use tables:
a)
The identity by industry (in the columns), output by industry = input by industry. This means that for each industry: output =
intermediate consumption + value added.
b)
The identity by product (in the rows), total supply by product = total use by product. This means that for each product: output
+ imports = intermediate consumption + final consumption + gross fixed capital formation + exports.
Supply and use tables of the Republic of Croatia were calculated according to the methodology of the UN System of National
Accounts (SNA 1993) and the European System of National Accounts (ESA 1995). The calculation of tables were made on the
basis of available statistical data sources at the level of 60 divisions of activities according to the National Classification of Activities
– NKD 2002. (in the columns) and at the level of 60 divisions of products according to the Classification of Products by Activities in
the Republic of Croatia – KPD 2002. (in the rows).
The main data sources for the compilation of supply and use tables are regular statistical surveys of the Croatian Bureau of
Statistics and administrative data sources. Statistical data sources are statistical surveys of agriculture, forestry and fishing,
manufacturing, construction, trade, hotels and restaurants, price statistics, the labour force survey, , investments statistics, the
household budget survey and foreign trade data.
Administrative data sources are composed of data from the Register of Annual Financial Reports of Enterprises kept by the
Financial Agency (enterprises, banks and savings banks, insurance companies and other financial institutions), the Annual Report
for Budgetary Users, a statistical report for non-profit institutions kept by the Ministry of Finance, annual data of the Tax
Administration for non-incorporated units and self-employed persons, statistical surveys, financial statistics and the balance of
payments data of the Croatian National Bank as well as fiscal statistics of the Ministry of Finance.
The supply and use tables for the Croatian economy for 2004 and 2005 were created by using the statistically based values
derived from the regular compilation of GDP for the Republic of Croatia, which is done by using mainly administrative data
sources.
The supply structure at the third level of Classification of Products by Activities (KPD 2002.) is estimated by using data from
administrative sources (Fina, the Tax Authority), data from regular annual surveys of the Croatian Bureau of Statistics (data on
agricultural production, structural survey of industrial production) and data from the special survey on the structure of revenues
and output of enterprises of the intermediate consumption, carried out during 2009 for the service activities sector. Data on
imports and exports of goods and services are based on the balance of payments data of the Croatian National Bank. It covers
exports and imports of goods in connection with the further processing based on the gross principle. The exports value of goods is
calculated according to the FOB parity and the imports value of goods calculated according to the CIF parity is reduced to the FOB
value parity on the basis of data supplied by the Croatian National Bank.
The calculation of trade margins is based on the distributive trade statistics data. The starting point for the distribution of trade
margins is the gross output, that is, the supply ofcertain groups of trade services at the three-digit level of the KPD classification. In
order to determine the total size of transport margins, the total supply of transport services was used minus a part related to the
consumption of resident and non-resident households and the intermediate consumption of large, medium-sized and small
enterprises. Thus obtained transport margins are proportionally distributed to the total supply of goods at basic prices.
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Allocations of net taxes on products are based on the Ministry of Finance data on the total taxes collected by types. For the
calculation of the value added tax – VAT in the absolute value, the corresponding rates were applied to the consumption of
resident and non-resident households, but also on intermediate consumption and investment of units that are not the subject to
VAT, but for which it is an integral part of the purchase price.
Units in the Republic of Croatia that are not in the VAT system are primarily budgetary users, non-profit institutions, banks and
insurance companies, the majority of agricultural households as well as owners of dwellings in which they live (imputed rents).
Data on subsidies on products are based on the Fina data which are used for the GDP calculation as well.
Various data sources for the intermediate cousumption, final consumption, gross investments and exports were used in the
calculation of the use tables. The data sources used in the calculation of detailed intermediate consumption by products in the use
table were data from the annual GDP compilation (the total intermediate consumption by activities), the Fina data on the structure
of intermediate consumption in regard to shares of expenditures for raw materials and consumables, that is, individual service
categories), annual survey data of branch statistics (e.g., the survey on used repro-materials in industry), the special survey data
on the structure of the intermediate consumption carried out in 2009 for service activities, data on the structure of intermediate
consumption of the new EU Member States (to compare structures). The main data sources for the calculation of expenditures for
the final consumption of households are the regular surveys carried out by the Croatian Bureau of Statistics (the Household
Budget Survey, retail trade turnover) and administrative data used in national accounts. The main data source for the capital
formation is the annual statistical survey on fixed capital formation of legal entities of the Croatian Bureau of Statistics,
supplemented with additional calculations in national accounts (estimate of households’ investments) and broken down by
technical structure and origin. The data sources used in the calculations of the final consumption expenditures by government are
based on the survey on revenues and expenditures of budgetary users, conducted by Fina. The data on the realisation of the
central government budget, extra-budgetary users and local self-government units were used as an additional data source.
In the process of balancing the supply and use, two steps were taken. In the first step, the detailed analysis of each KPD group helped
in the removal of the greatest discrepancies between the supply and the total uses. The removal was done by using information on
typical characteristics of each KPD product group (that is, intermediate consumption versus final consumption), structural
characteristics of similar economies (new EU Member States from middle Europe) that already have supply and use tables (Slovenia,
Slovakia, Hungary, Poland, the Czech Republic), additional surveys on running businesses of enterprises that are dominant in the
supply of individual KPD product groups, and expert estimates based on the familiarity of advantages and disadvantages of individual
statistical data sources. In the second step, the automatic approach to the balancing based on bivariate RAS method was used – the
remaining discrepancies after the first balancing phase were additionally aligned by using proportionate adjustment of rows and
columns of intermediate consumption.
Input-output tables present a goods and services flow among all sectors in economy in a certain period of time and provide
information on all inputs used in a production process: intermediate consumption, labour, capital, and land. They are analytically
derived from supply and use tables. The essential difference between the supply and use table and the symmetric input-output
table is that two types of the symmetric input-output table can be constructed, that is, a product-by-product version and industryby-industry version. In the input-output analysis, the product-by-product version of the symmetric table has a more important role
than the industry-by-industry version, because it shows flows and transactions in a more homogenous way. The relation between
activities and products is made according to the principle of the industrial origin of products, that is, to the principle of pure
activities aimed at the differentiation of the primary production from the secondary one.
In the symmetric input-output table, two identities are reduced to one in a way that the total supply by products equals the total use
by products. In other words, the transformation of supply and use tables to symmetric input-output table consists of converting the
supply and use tables of the industry-by-product type into the tables of the product-by-product type, which is essential because of
the existence of secondary products. The calculation of the supply table, the table of import flows and the tables of taxes less
subsidies and trade and transport margins is followed by the alignment of the supply and use by products and industries. This
alignment should be carried on until the transformation to basic prices the separation of domestic and imported products is done. It
should be carried out simultaneously in the purchase and basic prices for domestic and imported products. Prior to this, it is
necessary to calculate the valuation tables, that is, the matrices of taxes and subsidies on products and matrices of trade and
transport margins. By subtracting these matrices from supply and use tables in purchasers’ prices, the supply and use tables at
basic prices are calculated. The supply and use tables at basic prices and the use table of domestic output at basic prices and,
separately, the imports at basic prices represent a database for the transformation of supply and use tables into the input-output
table, which is implemented by using one of the four main and two additional models. The basic models for the transformation of
supply and use tables into symmetric input-output tables are A, B, C and D models. The models A and B are based on
technological assumptions that lead to the preparation of product-by-product input-output tables containing homogeneous
products in rows and homogenous production units (branches) in columns. The other two basic models are based on assumptions
about a fixed sales structure and result in the compilation of activity-activity input-output tables with products of certain activities in
rows and activities in columns. The symmetric input output table of the product-by-product type of the Republic of Croatia for 2004
was done by using the B model of transformation.
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Definitions and explanations
Gross output value is defined as a market value of all produced goods and services. The gross output value includes the market
output, the output for own final use (e.g., the output of agricultural products on small family farms and imputed rents of owner
occupiers) and other non-market outputs (the output of individual non-market services produced by government and non-profit
institutions serving households as well as the output of collective services produced by government).
Imports of goods and services consist of transactions in goods and services (purchases, barter, gifts or grants) to residents by
non-residents. Import of goods is valued in CIF parity. The CIF value is a price of a good delivered at the frontier of the importing
country before the payment of any import duties or other taxes on imports or trade and transport margins in the country. It includes
transport and insurance services provided by both resident and non-resident producers engaged in the imports. In the supply
table, these services on imports provided by non-resident producers are recorded as imports in the row presenting transport and
insurance services and in the imports column, while those of resident transporters or insurers are already included in the gross
output value of transport and insurance service activities in the country. As the total import should be valued at FOB prices at the
frontier of the exporting country, the CIF/FOB adjustment row is added. This adjustment means the global deduction of the value
of transport and insurance services on imports provided by resident and non-resident producers.
Basic price is the price receivable by the producers from the purchaser for a unit of a good or service produced as output minus
any tax payable on that unit as a consequence of its production or sale (that is, taxes on products), plus any subsidy receivable on
that unit as a consequence of its production or sale (that is, subsidies on products). It excludes any transport charges invoiced
separately by the producer. It includes any transport margins charged by the producer on the same invoice, even when they are
included as a separate item on the invoice.
Purchasers’ price is the price the purchaser actually pays for the products, including any taxes less subsidies on the products
(but excluding deductible taxes like VAT on the products), including any transport charges paid separately by the purchaser to take
delivery at the required time and place, after deductions for any discounts for bulk or off-peak purchases from standard prices or
charges, excluding interest or services charges added under credit arrangements, excluding and extra charges incurred as a result
of failing to pay within the period stated at the time the purchases were made.
Taxes on products are all taxes and import duties, VAT, excises and similar taxes.
Other taxes on production include taxes on the ownership and use of land, buildings and other facilities, taxes on the use of
fixed assets, taxes on the total wage bill and payroll taxes, taxes on pollution etc.
Subsidies on products are unrequited payments to market producers made by general government institutions.
Trade margin is the difference between the sales value and purchase value of merchandise sold.
Transport margin is the value of transport costs paid separately by the purchaser and included in purchasers’ price, but excluded
from basic prices of the producer or in trade margins of the wholesale or retail trader.
Intermediate consumption at purchase prices is the value of goods and services that are transformed, used up or consumed in
the production process.
Value added, as the output value increase, equals the difference between the gross output value and intermediate consumption.
The value added at basic prices equals the sum of compensation of employees, other taxes on production less other subsidies on
production, the sum of gross operating surplus and the gross mixed income.
Supply is the sum total of the domestic output and imports.
Use is the sum total of the intermediate consumption and the final use.
Final use is the sum total of the final consumption expenditures of individual institutional sectors, gross capital formation and
exports.
Final consumption expenditure is composed of aggregates of individual consumption expenditures and collective government
consumption expenditures. The individual consumption is composed of household expenditures, expenditures of non-profit
institutions serving households (NPISHs) and individual government expenditures. The individual government expenditures
comprise payments for non-market government services (education, health, social care, culture, sport, etc.) and market goods and
services expenditures (pharmaceutical and therapeutic products, health resort services, etc.). The non-profit institutions serving
households (NPISHs) consist of NPIs that provide goods and services to households, either free of charge or at prices that are not
economically significant (such as political parties, trade unions, churches or religious communities, associations, social, cultural,
recreational or sport clubs, charity organisations or aid agencies, etc.). Collective government expenditures consist of expenditures
on administrative, defence, economic, R&D and other non-market government services.
Final consumption expenditures of households consist of residential households expenditures for consumed goods and
services at domestic and non-domestic territory.
Gross capital formation is composed of gross fixed capital formation and changes in stocks. The gross fixed capital formation
consists of investments into new fixed capital formation, costs of transactions of existing fixed assets and of additions to the value
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of non-produced assets. The changes in stocks are calculated for work-in-progress and finished goods, stocks of commercial
goods in stores, stocks of raw material and consumables, spare parts, etc.
Exports of goods and services consist of transactions in goods and services (purchases, barter and gifts) by residents to nonresidents. Export of goods is valued in FOB values at the frontier of the exporting country. The CIF/FOB adjustment row is added
in the use table too.
Compensation of employees includes all income in cash or kind that employees received as compensation for their work and all
employers' social contributions. Employers’ social contribution includes compulsory and voluntary social contributions.
Remuneration to employees includes the following: commuting costs covered by employers, housing and family separation
compensations, children’s allowances, special holiday supplements, severance payments etc. Gross wages and salaries include
tips in restaurants, hairdressers, taxi and similar services.
Abbreviations
CIF
CNB
e.g.
ESA
etc.
Fina
FOB
GDP
mln
NPIs
NPISH
NKD 2002.
KPD
RAS
R&D
SNA
VAT
cost, insurance and freight
Croatian National Bank
for example (from Latin: exempli gratia)
European System of Accounts
and so on (from Latin: et cetera)
Financial Agency
free on board
gross domestic product
million
non-profit institution
non-profit institutions serving households
National Classification of Activities, 2002 version
Classification of Products by Activity
Named after typical sequence of matrices (R = diagonal matrix of multipliers for rows,
A = diagonal matrix of input coefficients in base year, S = diagonal matrix of multipliers for columns
research and development
System of National Accounts
value added tax
Symbols
0
no occurrence
value not zero but less than 0.5 of the unit of measure used
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