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Input-Output (I-O) tables show the structure of a country's entire production system for a particular period, usually one year. They show which goods and services are produced by each industry and how they are used (e.g. some goods, such as cars, are sold to final consumers while others, such as steel, are used as inputs by other industries in producing more goods and services). The tables are based on the principle that the value of the output of each industry can be expressed as the sum of the values of all the inputs to that industry. These inputs include the use of the outputs of other industries; any profits made from production; compensation of employees; and any taxes on production paid less any subsidies received. All the goods and services produced in a period are identified as being used as inputs by industries in their production process, being sold to final users of the goods and services (either in Australia, or overseas as exports), or contributing to the changes in inventories (an increase in inventories if more goods are produced than purchased, or a run-down in inventories if purchases exceed production). The net increase in inventories includes any timing difference between supply and use.

Relationship to the national income and expenditure accounts

I-O tables are directly related to the GDP account. The income side of the GDP account shows the amount of income generated in the economy accruing to labour (in the form of compensation of employees) and to capital (as profits or, in national accounting terms, gross operating surplus and gross mixed income - the latter including some return to owners of businesses for their labour). The expenditure side of the account shows the value of goods and services entering into the various categories of final uses.

The I-O tables provide a much more detailed disaggregation of the GDP account than is available in the national income, expenditure and product accounts. The latter only shows details of the end results of economic activity, whereas the I-O tables show the flows of goods and services through the production process. The extra detail provided by the I-O tables is essential for many analyses.

I-O table for seven industry sectors

Table 29.23 and diagram 29.24 show the flows of goods and services in respect of 1996-97.

The links between the table and the diagram are explained by working through the following formulae.

Total intermediate use - ($482,483m) in the diagram is derived by summing from column 8 of the table: intermediate use ($412,134m); taxes on products, net ($13,378m); competing imports ($56,890m); and complementary imports ($81m).

Domestic final use - ($530,600m) in the diagram is derived from the table by subtracting total exports ($105,160m), column 12, from total final uses ($635,760m), column 13.

Imports - ($103,590m) is derived by summing from column 14 of the table: competing imports ($103,257m); and complementary imports ($333m). In the diagram it is dissected into imports for intermediate uses ($56,971m); and imports for final uses ($46,619m).

Exports - ($105,160m) in the diagram is total exports, column 12 in the table.

Total use - ($1,118,243m), which equals total supply, is the sum of domestic final use ($530,600m); total intermediate use ($482,483m); and exports ($105,160m).

Gross value added - ($493,377m) in the diagram is derived by summing from column 14 of the table: compensation of employees ($257,193m); gross operating surplus and mixed income ($213,534m); and other taxes on production (net) ($22,650m).

GDP (income measure) - ($532,170m) in the diagram is derived by summing from column 14 of the table: compensation of employees ($257,193m); gross operating surplus and mixed income ($213,534m); taxes on products (net) ($38,793m); and other taxes on production (net) ($22,650m).

GDP (expenditure measure) - ($532,170m) in the diagram is derived by summing domestic final use ($530,600m); and exports ($105,160m); and subtracting imports ($103,590m).

29.23 INDUSTRY BY INDUSTRY FLOW TABLE, Basic values - 1996-97
	1		2		3		4		5		6		7
	Agriculture		Mining		Manufacturing		Construction		Trade and transport		Service industries		Government admin. and defence
Supply	$m		$m		$m		$m		$m		$m		$m
Agriculture	4,071		16		13,710		123		283		1,304		52
Mining	42		3,851		9,719		651		238		2,897		96
Manufacturing	4,369		4,043		49,326		16,658		16,182		20,627		3,497
Construction	177		224		48		70		439		1,948		675
Trade and transportation	2,819		3,020		21,356		4,084		18,559		15,873		1,818
Service industries	3,192		4,991		22,429		7,994		45,697		91,487		7,637
Government admin. and defence	53		226		578		120		1,260		1,100		2,505
Intermediate use	14,722		16,371		117,166		29,699		82,658		135,237		16,280
Compensation of employees	3,967		5,887		36,147		13,812		51,263		127,132		18,985
Gross operating surplus and gross mixed income	12,699		16,788		27,262		15,351		19,715		118,860		2,859
Taxes on products (net)	464		207		1,752		715		4,347		5,643		250
Other taxes on production (net)	588		499		2,505		700		4,053		11,054		29
Competing imports	1,641		2,015		28,646		3,406		5,793		13,548		1,842
Complementary imports	-		-		81		-		-		-		-
Australian production	34,081		41,767		213,558		63,683		167,829		411,474		40,245
	8		9		10		11		12		13		14
	Intermediate usage = Sum (1 to 7)		Final consumption expenditure		Gross fixed capital formation		Changes in inventories		Exports		Final uses = Sum (9 to 12)		Total supply = Sum (8+13)
	$m		$m		$m		$m		$m		$m		$m
Agriculture	19,560		4,719		1,024		369		8,409		14,522		34,081
Mining	17,493		598		2,268		-2,428		23,835		24,274		41,767
Manufacturing	114,702		47,087		14,046		-495		38,219		98,856		213,558
Construction	3,581		2,964		57,048		-5		96		60,102		63,683
Trade and transportation	67,530		70,463		11,901		40		17,896		100,299		167,829
Service industries	183,427		207,096		9,399		67		11,484		228,047		411,474
Government admin. and defence	5,842		33,847		405		-		151		34,403		40,245
Intermediate use	412,134		366,774		96,091		-2,452		100,090		560,503		972,637
Compensation of employees	257,193		-		-		-		-		-		257,193
Gross operating surplus and gross mixed income	213,534		-		-		-		-		-		213,534
Taxes on products (net)	13,378		20,262		3,352		158		1,643		25,415		38,793
Other taxes on production (net)	19,428		-		3,222		-		-		3,222		22,650
Competing imports	56,890		24,314		17,303		1,323		3,427		46,367		103,257
Complementary imports	81		111		151		-9		-		252		333
Australian production	972,637		411,461		120,119		-980		105,160		635,760		1,608,397
Gross value added	490,155		. .		3,222		. .		. .		3,222		493,377
Gross domestic product	. .		. .		. .		. .		. .		. .		532,170
Source: Australian National Accounts: Input-Output Tables, 1996-97 (5209.0).

29.24 THE AUSTRALIAN ECONOMY, Flow of goods and services - 1996-97

Source: Australian National Accounts: Input-Output Tables, 1996-97 (5209.0).