The OECD Input-Output database and The OECD Input-Output database and Supply-Use Tables in SNA 1993 Rev 1 Supply-Use Tables in SNA 1993 Rev 1

OECD-NBS Workshop on National OECD-NBS Workshop on National Accounts Accounts

September 25-28, 2007, BeijingSeptember 25-28, 2007, Beijing

Contact: nadim.ahmad@oecd.org

OECD Input-Output Database

• History

• 2006 Edition

• Creating Symmetric Tables

• Data Sources

• Why Industry by Industry?

• Dissemination

History• 1995 Edition

– 10 countries– SNA68 – ISIC Rev 2 – 36 sectors– Up to 1990

• 2002 Edition- 20 Countries (2 non member)- SNA 93- ISIC Rev 3- 42 Sectors- Up to 1998

2006 Edition

• 2006 Edition– 37 countries (9 non members)– SNA93 – ISIC Rev 3 – 48 sectors– Up to 2003

2006 Edition - Country Coverage

• Country coverage corresponds to over 90% of global GDP (80% in 2002 Ed and 70% in 1995). Population coverage (66% versus 40 and 10 respectively)

2006 Edition - TablesCountry ISIC Rev 2 ISIC Rev 3

1970 1975 1980 1985 1990 1995 2000

Australia 68 74 - 86 89 94/95 98/99

Austria - - - - - ✓ ✓

Belgium - - - - - ✓ ✓

Canada 71 76 81 86 ✓ 97 ✓

Czech Republic - - - - - ✓ ✓

Denmark 72 77 ✓ ✓ ✓ ✓,97 ✓

Finland - - - - - ✓ ✓

France 72 77 ✓ ✓ ✓ ✓ ✓

Germany - 78 - 86,88 ✓ ✓ ✓

Greece - - - - - 94,✓ 99

Hungary - - - - - 98 ✓

Iceland - - - - - - - Ireland - - - - - - 98

Italy - - - ✓ - 92,✓ ✓

Japan ✓ ✓ ✓ ✓ ✓ 95c-97 ✓

Korea - - - - - ✓ ✓c

Luxembourg - - - - - - - Mexico - - - - - - 03

Netherlands 72 77 81 86 - 95-98 ✓

New Zealand - - - - - 95/96 - Norway - - - - - 97 01

Country ISIC Rev 2 ISIC Rev 3

1970 1975 1980 1985 1990 1995 2000

Poland - - - - - ✓ ✓

Portugal - - - - - ✓ 99

Slovak Republic - - - - - ✓ ✓

Spain - - - - - ✓ ✓

Sweden - - - - - ✓ ✓

Switzerland - - - - - - 01 Turkey - - - - - 96 98

United Kingdom 68 79 - 84 ✓ ✓,98 ✓

United States 72 77 82 ✓ ✓ ✓,97 ✓ Argentina - - - - - 97 -

Brazil - - - - - ✓,96 ✓

China - - - - - 97 ✓c

Chinese Taipei - - - - - - 01c India - - - - - 93/94 98/99

Indonesia - - - - - ✓c ✓c

Israel - - - - - ✓ -

Russia - - - - - ✓ ✓

Singapore - - - - - ✓ ✓

Total 8 9 6 10 8 33 33

2006 Edition – Industry Coverage

ISIC Rev.3 code

IO Industry

Description

1+2+5 1 Agriculture, hunting, forestry and fishing 10+11+12 2 Mining and quarrying (energy)

13+14 3 Mining and quarrying (non-energy)

15+16 4 Food products, beverages and tobacco

17+18+19 5 Textiles, textile products, leather and footwear

20 6 Wood and products of wood and cork

21+22 7 Pulp, paper, paper products, printing and publishing

23 8 Coke, refined petroleum products and nuclear fuel

24ex2423 9 Chemicals excluding pharmaceuticals

2423 10 Pharmaceuticals

25 11 Rubber and plastics products

26 12 Other non-metallic mineral products

271+2731 13 Iron & steel

272+2732 14 Non-ferrous metals

28 15 Fabricated metal products, except machinery and equipment

29 16 Machinery and equipment, nec

30 17 Office, accounting and computing machinery

31 18 Electrical machinery and apparatus, nec

32 19 Radio, television and communication equipment

33 20 Medical, precision and optical instruments

34 21 Motor vehicles, trailers and semi-trailers

351 22 Building & repairing of ships and boats

353 23 Aircraft and spacecraft

352+359 24 Railroad equipment and transport equipment n.e.c.

36+37 25 Manufacturing nec; recycling (include Furniture)

ISIC Rev.3 code

IO Industry

Description

401 26 Production, collection and distribution of electricity 402 27 Manufacture of gas; distribution of gaseous fuels through mains

403 28 Steam and hot water supply

41 29 Collection, purification and distribution of water

45 30 Construction

50+51+52 31 Wholesale and retail trade; repairs

55 32 Hotels and restaurants

60 33 Land transport; transport via pipelines

61 34 Water transport

62 35 Air transport

63 36 Supporting & auxiliary transport activities; activities of travel agencies

64 37 Post and telecommunications

65+66+67 38 Finance and insurance

70 39 Real estate activities

71 40 Renting of machinery and equipment

72 41 Computer and related activities

73 42 Research and development

74 43 Other Business Activities

75 44 Public administration and defence; compulsory social security

80 45 Education

85 46 Health and social work

90-93 47 Other community, social and personal services

95+99 48 Private households with employed persons & extra-territorial organisations & bodies

2006 Edition - Value-Added & Final Demand

• VA • FD

Creating Symmetric Tables

• Requests for Industry by Industry (IxI) (preferably 48x48 at BP)– Or: Supply-Use, or Commodity by Commodity (CxC) and

Supply, or CxC • Conversion Steps:

– S-U at purchasers’ prices – Convert use table to BP. – S-U at BP (total economy only) – Convert Use table into

separate domestic and import use tables – Convert S and Domestic Use tables into IxI tables using

‘Fixed Product Sales Structures’ assumption.– Aggregate to 48x48 – CxC and Supply – (reverse engineer the Use table and follow

steps above)– CxC - aggregate only (Japan, Korea. Chinese Taipei and

Indonesia)

– Other: e.g. FISIM, c.i.f/f.o.b

Transforming Supply Use into Input-Output Tables

• SU tables are CxI not CxC or IxI• So for CxC, it’s necessary to convert output by

industries into output by products• And for IxI, it’s necessary to convert demand by

products into demand by industries.• If each industry produced only one product this

would be trivial.• Unfortunately this is rarely the case.

(CxC) Input-Output Tables

• Two assumptions prevail in constructing CxC tables, which can be used in isolation or often in combination: – Product technology - Each product is

produced in its own specific way, irrespective of the industry where it is produced

– Industry technology - Each industry has its own specific way of production, irrespective of its product mix.

Product technology USE TABLE SUPPLY TABLE Agricul-

ture Manufacturing

Final demand

Total Agricul-ture

Manufacturing

Total

Agricultural products 0 80 50 130 130 0 130 Manufacturing products 60 30 130 220 20 200 220 Wages and salaries 60 20 - 80 - - Operating surplus 30 70 - 100 - - Total 150 200 180 150 200 USE TABLE SUPPLY TABLE Agricul-

ture Manufacturing

Final demand

Total Agricul-ture

Manufacturing

Total

Agricultural products -8 8 0 0 0 0 0 Manufacturing products -3 3 0 0 -20 20 0 Wages and salaries -2 2 - 0 - - Operating surplus -7 7 - 0 - - Total -20 20 0 -20 20 USE TABLE SUPPLY TABLE Agricul-

tural products

Manufacturing

products

Final demand

Total Agricul-tural

products

Manufacturing

products

Total

Agricultural products -8 88 50 130 130 0 130 Manufacturing products 57 33 130 220 0 220 220 Wages and salaries 58 22 - 80 - - Operating surplus 23 77 - 100 - - Total 130 220 130 220

This illustrates one of the biggest practical problems with the implementation of

the product technology assumption – although it could of course be used to identify problems with the original SU balance

Agriculture produces 20 units of manufacturing – we assume the

same structure as in manufacturing, hence (minus)

80/200*20=-8 etc

Industry technology USE TABLE SUPPLY TABLE Agricul-

ture Manufacturing

Final demand

Total Agricul-ture

Manufacturing

Total

Agricultural products 0 80 50 130 130 0 130 Manufacturing products 60 30 130 220 20 200 220 Wages and salaries 60 20 - 80 - - Operating surplus 30 70 - 100 - - Total 150 200 180 150 200 USE TABLE SUPPLY TABLE Agricul-

ture Manufacturing

Final demand

Total Agricul-ture

Manufacturing

Total

Agricultural products 0 0 0 0 0 0 0 Manufacturing products -8 8 0 0 -20 20 0 Wages and salaries -8 8 - 0 - - Operating surplus -4 4 - 0 - - Total -20 20 0 -20 20 USE TABLE SUPPLY TABLE Agricul-

tural products

Manufacturing

products

Final demand

Total Agricul-tural

products

Manufacturing

products

Total

Agricultural products 0 80 50 130 130 0 130 Manufacturing products 52 38 130 220 0 220 220 Wages and salaries 52 28 - 80 - - Operating surplus 26 74 - 100 - - Total 130 220 130 220

Agriculture produces 20 units of manufacturing – we assume the same structure as in agriculture,

hence zero for agricultural products and (minus)

60/150*20=-8 etc

Note there are no negatives. A strength of the industry technology

assumption.

(CxC) Input-Output Tables

• A third assumption is the hybrid technology which uses parts of the industry and product technology assumptions.

(CxC) Input-Output Tables

• These transformations can be described algebraically as

• Where U is the original SU IC CxI Table; VA is the VA vector (VA by I); q, the vector of domestically produced products and g, the vector of the output of industries

Product Tech Industry Tech

IO IC (C by C) U(Make)-1 diag(q) U(diag(g))-1Make'

IO VA (VA by C) VA(Make)-1 diag(q) VA(diag(g))-1Make'

(IxI) Input-Output Tables

• Like CxC two assumptions prevail in constructing IxI tables

• Fixed Product Sales Structures – Each product has its own specific sales structure, irrespective of the industry where it’s produced.

• Fixed Industry Sales Structures - Each industry has its own specific sales structure, irrespective of its product mix.

Fixed Product Sales Structures USE TABLE SUPPLY TABLE Agricul-

ture Manufacturing

Final demand

Total Agricul-ture

Manufacturing

Total

Agricultural products 0 80 50 130 130 0 130 Manufacturing products 60 30 130 220 20 200 220 Wages and salaries 60 20 - 80 - - Operating surplus 30 70 - 100 - - Total 150 200 180 150 200 USE TABLE SUPPLY TABLE Agricul-

ture Manufacturing

Final demand

Total Agricul-ture

Manufacturing

Total

Agricultural products 5.5 2.7 11.8 20 20 0 20 Manufacturing products -5.5 -2.7 -11.8 -20 -20 0 -20 Wages and salaries 0 0 - 0 - - Operating surplus 0 0 - 0 - - Total 0 0 0 0 0

USE TABLE SUPPLY TABLE Agricul-

ture Manufacturing

Final demand

Total Agricul-ture

Manufacturing

Total

Agriculture 5.5 82.7 61.8 150 150 0 150 Manufacturing 54.5 27.3 118.2 200 0 200 200 Wages and salaries 60 20 - 80 - - Operating surplus 30 70 - 100 - - Total 150 200 180 150 200

Agriculture produces 20 units of manufacturing – we assume that it produces 20/220 per cent of all

products and that each consumer purchases this share of manufactured products from the agriculture

industry, so, of the 60 purchased by agriculture 60*20/220 =5.5 is from the agriculture industry.

Fixed Industry Sales Structures USE TABLE SUPPLY TABLE Agricul-

ture Manufacturing

Final demand

Total Agricul-ture

Manufacturing

Total

Agricultural products 0 80 50 130 130 0 130 Manufacturing products 60 30 130 220 20 200 220 Wages and salaries 60 20 - 80 - - Operating surplus 30 70 - 100 - - Total 150 200 180 150 200 USE TABLE SUPPLY TABLE Agricul-

ture Manufacturing

Final demand

Total Agricul-ture

Manufacturing

Total

Agricultural products 0 12.3 7.7 20 20 0 20 Manufacturing products 0 -12.3 -7.7 -20 -20 0 -20 Wages and salaries 0 0 - 0 - - Operating surplus 0 0 - 0 - - Total 0 0 0 0 0 USE TABLE SUPPLY TABLE

Agricul-ture

Manufacturing

Final demand

Total Agricul-ture

Manufacturing

Total

Agricultural products 0 92.3 57.7 150 150 0 150 Manufacturing products 60 17.7 122.3 200 0 200 200 Wages and salaries 60 20 - 80 - - Operating surplus 30 70 - 100 - - Total 150 200 180 150 200

Agriculture produces 20 units of manufacturing – we assume that the shares are split equally between

consumers of agricultural products, so 80/130*20=12.3 goes to manufacturing,

50/130*20=7.7 to final demand etc. This can also result in negatives.

(IxI) Input-Output Tables

• These transformations can be described algebraically as

• Where U is the original SU IC CxI Table; fd is the final demand vector; q, the vector of domestically produced products and g, the vector of the output of industries

FPSS FISS

IO IC (I by I) Make'(diag(q)-1 U diag(g)(Make)-1U

IO FD (FD by I) Make'(diag(q)-1 U diag(g)(Make)-1fd

So why do the OECD choose Industry by Industry?

i. Linkages to other OECD industrial database: – STAN, ANBERD, SDBS, IEA (emissions) etc

ii. Policy focus –– Structure of businesses, Entrepreneurship etc

iii. Statistical Quality – whether CxC or IxI, assumptions are needed:– Information sources, typically, business (industry) based. IxI using

Fixed Product Sales assumption (FPSA) preserves observed VA relationships. CxC does not.

– Equally the CxC assumption of heterogeneity in products is intrinsically linked to empirical facts – classification systems are too aggregate and businesses rarely have the same cost structures.

iv. Simplicity – – IxI tables easily produced using FPSS (no negatives)

SourcesTables

Country Year Supply

Use Total

Use Import

IO Total

IO Import

Australia 1998/99 ✓ ✓ Austria 2000 ✓ ✓ PU ✓c ✓c

Belgium 2000 ✓ ✓ ✓c ✓c Canada 2000 ✓ ✓ Czech Republic 2000 ✓ ✓ ✓

Denmark 2000 ✓ ✓ Finland 2000 ✓ ✓

France 2000 ✓ ✓ PU ✓c

Germany 2000 ✓ ✓ PU ✓c ✓c Greece 2000 ✓ ✓ PU

Hungary 2000 ✓ ✓ PU ✓c ✓c Ireland 1998 ✓ ✓ PU ✓c ✓c Italy(i) 2000 ✓ ✓ PU ✓c ✓c

Japan (i) 2000 ✓ ✓c ✓c Korea 2000 ✓c ✓c

Mexico 2003 ✓ ✓

Netherlands 2000 ✓ ✓

New Zealand 1995/96 ✓ ✓ Norway 2001 ✓ ✓

Tables Country Year

Supply Use Total

Use Import

IO Total

IO Import

Poland 2000 ✓ (99) ✓ ✓c ✓c Portugal 1999 ✓ ✓ PU ✓c ✓c

Slovak Republic 2000 ✓ ✓ PP ✓c

Spain 2000 ✓ ✓ ✓

Sweden 2000 ✓ ✓ PU ✓c ✓c

Switzerland 2001 ✓ ✓ ✓c

Turkey 1998 ✓ ✓ ✓c ✓c

United Kingdom 2000 ✓ ✓ PU

United States(i) 2000 ✓ ✓ PR

Argentina 1997 ✓ ✓

Brazil 2000 ✓ ✓ China 2000 ✓c,PR ✓c,PR

Chinese Taipei 2001 ✓ ✓

India 1998/99 ✓ ✓ ✓

Indonesia 2000 ✓c ✓c

Israel 1995 ✓ ✓ ✓

Russia 2000 ✓ ✓

Singapore 2000 ✓ ✓

Dissemination

• http://www.oecd.org/std/io-tables/data

– 2002 Edition available now (on request) from

– 1995 Edition available on-line

– 2006 Edition release imminent

• See also Ahmad & Yamano, 2006 for more information.

Special Issues SNA93 – Rev 1 implications

• Although the SU tables are not in themselves subject to change in the SNA revision, a number of changes in other areas will have an effect.

Special Issues SNA93 – Rev 1 implications

Ancillary Units• The 1993 SNA specifies that units conducting only a

specified list of activities designated as “ancillary” should not be treated as separate units but their costs should be consolidated with the units they serve. This means that when accounts for a region are compiled, head offices and other ancillary units located there are excluded if the units they serve are located outside the region. This results in a difference between ancillary units located abroad, which are treated as separate units, and those that are resident but distant from their related enterprises.

Special Issues SNA93 – Rev 1 implications

Ancillary Units

• The AEG recommended that ancillary units can be establishments in their own right if they satisfy the normal requirements of an establishment – allocated to the main service classification provided by the unit.

Special Issues SNA93 – Rev 1 implications

Goods sent abroad for processing• The 1993 SNA and BoP treat goods sent abroad for

processing differently. The SNA records gross flows only in the case of substantial processing (reclassification of the good at three-digit CPC). The Balance of Payments Manual, as a practical matter, suggests a convention that all processing be assumed substantial and therefore gross flows are recorded.

• Further, the position is that when goods are sent abroad for processing, no change in ownership takes place and thus there are no actual transactions.

• Does the advent of globalization and the increasing amount of goods processed abroad suggest a change in practice would be appropriate?

Special Issues SNA93 – Rev 1 implications

Goods sent abroad for processing

• The AEG has decided to resolve this issue by never imputing a change of ownership, and, so, not recording gross flows. Further the AEG also recommended that the same approach should be used in dealing with goods processed domestically even if between related enterprises,

Special Issues SNA93 – Rev 1 implications

Merchanting• Merchanting is defined in BoP as the purchase

of a good by a resident of country A from a resident of country B which is then sold to a resident of country C, without the good entering the merchant’s economy. The SNA does not cover this topic.

• There is a need for a clear and precise definition of merchanting; arising out of this there needs to be clear guidance on whether merchanting (when redefined) should be recorded on a net or a gross basis and under goods or services.

Special Issues SNA93 – Rev 1 implications

Merchanting

• The AEG has recommended that, the acquisition of goods by the merchanter should be recorded as an import, identified as a negative export, of the merchanter. The resale of these goods is then shown as an export with the difference in values (exclusive of holding gains/losses) allocated to wholesale/retail exports.