By the OECD Statistics Directorate
Supply-use tables provide the key accounting mechanism to ensure coherence between the various sources of data and approaches countries use to estimate GDP–expenditure, output and income. They also have the potential to inform a wide range of policy areas.
What are supply-use tables? Supply-use tables (SUTs) provide a detailed overview of transactions in goods and services by industries and consumers.
In the first chart, the supply table shows the total values of what industries produce and what is imported. It also shows estimates of industries’ distribution margins, taxes paid and subsidies received, which together explain the difference between basic or “factory gate” prices and the actual prices paid by purchasers.
The use table divides product values into intermediate consumption, which is the value of products being used for further processing by industries, and final consumption of finished products by households and government. It also shows other components of final demand, such as investment and exports. For each industry, the use table also shows the value added by productive activities, that is to say, the difference between final output and intermediate consumption, including compensation of employees and operating surplus or mixed income.
Why are supply-use tables useful?
Traditionally, the main use of SUTs has been to improve GDP estimates by balancing records of the supply of goods and services with those of the demand for them, thus capitalising on and confronting disparate sources of data–business surveys, household surveys, labour force surveys, administrative tax records, imputations, and so on. But their potential goes well beyond this, as SUTs provide a bird’s-eye view of the structure of the economy–who makes what, how and for whom.
In recent years, SUTs have become the key accounting tool used to generate national input-output tables, and have become essential to the construction of datasets such as those used for Trade in Value Added (TiVA) estimates and related applications, such as CO2 footprints and jobs embodied in trade. And their potential goes beyond even these high-profile applications. SUTs can, for example, help simulate and estimate the economic impact of potential price shocks, or develop productivity estimates taking account of labour, capital and intermediate inputs. Moreover, they provide the basis for simple descriptive statistics that are not typically available or collected.
Supermarkets and mark-ups
One interesting new application is to compare distribution costs and mark-ups between countries. These vary with differences in countries’ policies in the areas of competition and deregulation; the prevalence of discount stores, specialised retailers, and e-commerce; transportation infrastructure; and the cost of petrol. There may also be differences in the shares of purchases made directly from producers or local units.
The chart below compares distribution margins in France and the UK with those in Germany–where discount stores, such as Aldi and Lidl, account for over a third of the market. It shows that distribution margins for fish in France were 64% of the total price in 2013, over 40 percentage points higher than in Germany, which may reflect higher margins on fresh as opposed to frozen fish. Margins on agricultural products in the United Kingdom were somewhat lower than in Germany but higher in all other categories shown below, except pharmaceuticals. In fact, margins in Germany are significantly lower across a range of products.
Increasing e-commerce transactions can be expected to reduce margins. However, while complete data on e-commerce remain a work in progress, where anecdotal data are available, they do not appear to explain the significant cross-country differences in margins.
Where to find the data
OECD SUT data are available by industry and product on OECD.Stat under National Accounts statistics. The tables provide information by industry (at the 2 digit ISIC Rev 4 level: 89 industries) with corresponding breakdowns by products (using internationally agreed product breakdowns). They are available at the total economy level at both purchasers’ and basic prices, with separate tables breaking down the differences into trade and transport margins, and taxes and subsidies on products. Data are available for 37 countries in 2017, with more being added.
The OECD Statistics Directorate is leading international efforts to develop extended supply-use tables that break down traditional groupings of industries in SUTs by a number of criteria, including trading status, firm size and ownership. These provide an essential tool to improve TiVA estimates and provide new insights on global value chains (GVCs), such as upstream integration of small and medium enterprises (SMEs) in GVCs, and on the trade-investment nexus.
For further information, see www.oecd.org/std/its/enterprises-in-global-value-chains.htm