The input-output analysis describes the sale and purchase relationships between producers and consumers within an economy. One key component of input-output data is the intermediate transaction table that records the sales and purchases of intermediate inputs between different sectors of the economy. The intermediate transaction table allows tracing the various inputs that flow into the supply chains (or value chains) of an economy. For instance, how much financial services are purchased by the mining industry, which in turn supplies ores to manufacturing companies.
The input-output data described in Part 1 are compiled by the Australian Bureau of Statistics as part of their national accounts. The most recent compilation for the fiscal year 2014-15, which includes data for 114 industries, is used for the purpose of the analysis included in such section.1 The ABS defines services-producing industries “as industries other than goods-producing industries”, excluding Agriculture, Forestry and Fishing; Mining; Manufacturing and Construction. The latter differ from the convention used by the OECD that classifies Construction as a services sector. To facilitate international comparisons of trade statistics, the OECD convention is adopted in the remaining of the analysis.2 The input-output tables identifies 50 service headings (4-digit codes), including construction services, divided into 15 divisions reported in Table A.1. As highlighted in Table A.1, there is a slight difference in sector codes used in Australia New Zealand Standard Industrial Classification (ANZSIC) 2006 and ISIC, Rev 3.1.
Data and analytical results reported in the main text refer to the main services divisions. Results at the 4-digit headings levels are available in Annex C.
Gross output (production) and gross export shares can be extrapolated directly from the input-output tables. Gross output is a measure of an industry's sales or receipts, which include sales to final users in the economy and to other industries as intermediate inputs.3 Gross export is the gross value of the export sales.4 The value added produced by each industry is calculated either as (i) the gross output minus the costs of intermediate inputs, or as (ii) the compensation to the primary production factors employed by the industry (capital and labour). In other words, measures in value added terms express the value created by the industry by processing inputs into more valuable outputs, where the difference is used to compensate the employees and the owners of the firms that provide capital and carry risks. The contribution to GDP is measured by the value added net of taxes and subsidies. The total export of value added of a sector is calculate as the sum of the direct value added export of the sector and the value added that is transmitted through the supply chains of the economy to other industries that export to the world market.
The direct export of value added can be derived from input-output tables by multiplying the value added coefficient, i.e. value added divided by gross output, by the gross exports of the sector. The indirect export of value added requires a more advanced calculation that traces the value added flows between all sectors of the economy to the final export point (see Annex B for technical details). The export propensity of each sector, both in gross and value added terms, is defined as the shares of output and value added, respectively, that are exported (Table C.3).