Quantec Standardised Industry: The relationship between industry output, value added and GDP explained

Output is the value of goods and services produced in the economy during a specific period and includes intermediate use of goods and services (domestically produced and imported), compensation of employees, gross operating surplus, taxes and subsidies on production as well as taxes and subsidies on products.

GDP is calculated from the income side (or value added) which consists of compensation of employees and gross operating surplus. This is often referred to as GDP at factor cost or value added. GDP at basic prices can then be calculated by adding net indirect taxes on production to value added, while GDP at market prices is calculated as GDP at basic prices plus net taxes on products.

The equation and chart below illustrates the relationships between output and GDP using data for 2018.

  
Compensation of employees
+
Gross operating surplus
=
Value added (or GDP at factor cost)
  + Taxes on production
  - Subsidies on production
  = GDP at basic prices
    + Taxes on products
    - Subsidies on products
    = GDP at market prices
      + Intermediate use (domestic and imported)
      = Output
  

In 2018, output of R6.4 trillion was produced in South Africa. 52.6% of this output was used as intermediate goods and services. Value added was equal to R2.8 trillion of which 55.2% was compensation of employees and 44.8% gross operating surplus. GDP at market prices was calculated from value added by adding net indirect taxes on production and net indirect taxes on products and was equal to R3.0 trillion.

The EasyData Industry Service contains the Supply and Use information for 91 industries. The tables provide detailed information on the input and output structure for each of the industries, as well as additional data for each industry on employment by sector and skill level, and capital (fixed capital stock, gross fixed capital formation, and consumption of gross fixed capital formation). The EasyData Industry Service data is derived from various StasSA sources including Annual Financial Statistics, GDP by industry statistics, National Accounts statistics, Quarterly Employment Statistics and Quarterly Labour Force Statistics. The data set is updated around April every year, after the March release of the National Accounts statistics.

The data utilised in these graphs are downloaded from www.easydata.co.za, for more information on the EasyData services available please visit www.easydata.co.za.


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