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Basic structure

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 1998-99.

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

Total intermediate use - ($557,889m) in the diagram is derived by summing from column 8 of the table: intermediate use ($469,282m); taxes on products, net ($18,325m); competing imports ($70,203m); and complementary imports ($79m).

Domestic final use - ($606,345m) in the diagram is derived from the table by subtracting total exports ($112,025m), column 12, from total final uses ($718,370m), column 13.

Imports - ($126,453m) is derived by summing from column 14 of the table: competing imports ($126,007m); and complementary imports ($446m). In the diagram it is dissected into imports for intermediate uses ($70,282m); and imports for final uses ($56,170m).

Exports - ($112,025m) in the diagram is total exports, column 12 in the table.

Total use - ($1,276,259m), which equals total supply, is the sum of domestic final use ($606,345m); total intermediate use ($557,889m); and exports ($112,025m).

Gross value added - ($542,831m) in the diagram is derived by summing from column 14 of the table: compensation of employees ($286,610m); gross operating surplus and mixed income ($235,465m); and other taxes on production (net) ($20,756m).

GDP (income measure) - ($591,917m) in the diagram is derived by summing from column 14 of the table: compensation of employees ($286,610m); gross operating surplus and mixed income ($235,465m); taxes on products (net) ($49,086m); and other taxes on production (net) ($20,756m).

GDP (expenditure measure) - ($591,917m) in the diagram is derived by summing domestic final use ($606,345m); and exports ($112,025m); and subtracting imports ($126,453m).

29.23 INDUSTRY BY INDUSTRY FLOW TABLE, Basic prices - 1998-99
	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	4,062	25	14,755	136	429	1,872	62
Mining	29	4,201	8,283	499	224	4,238	63
Manufacturing	4,029	3,654	49,108	17,104	14,771	26,693	3,893
Construction	223	1,133	64	82	959	2,523	972
Trade and transportation	2,449	3,627	19,054	4,199	21,861	18,458	2,388
Service industries	4,563	5,388	28,053	11,158	52,298	114,357	9,205
Government admin. and defence	60	220	714	163	1,534	2,528	2,919
Intermediate use	15,415	18,248	120,031	33,341	92,076	170,669	19,502
Compensation of employees	4,699	5,889	38,456	14,817	53,307	149,389	20,053
Gross operating surplus and gross mixed income	12,907	17,879	28,966	18,727	16,414	137,186	3,386
Taxes on products (net)	851	673	2,205	1,169	4,862	8,088	477
Other taxes on production (net)	540	490	2,602	698	4,672	11,651	103
Competing imports	2,159	2,443	33,012	4,358	6,223	19,333	2,675
Complementary imports	-	-	47	-	5	27	-
Australian production	36,572	45,621	225,317	73,111	177,561	496,342	46,196
	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	21,341	4,936	1,312	459	8,522	15,230	36,572
Mining	17,537	439	1,779	-100	25,968	28,085	45,621
Manufacturing	119,252	50,649	14,177	2,234	39,007	106,066	225,317
Construction	5,956	2,803	64,288	4	60	67,155	73,111
Trade and transportation	72,036	71,923	12,334	245	21,024	105,525	177,561
Service industries	225,022	241,036	17,442	-	12,837	271,319	496,342
Government admin. and defence	8,138	37,672	237	-	150	38,058	46,196
Intermediate use	469,282	409,458	111,569	2,843	107,568	631,438	1,100,720
Compensation of employees	286,610	-	-	-	-	-	286,610
Gross operating surplus and gross mixed income	235,465	-	-	-	-	-	235,465
Taxes on products (net)	18,325	22,071	7,716	717	256	30,761	49,086
Other taxes on production (net)	20,756	-	-	-	-	-	20,756
Competing imports	70,203	30,889	19,622	1,093	4,200	55,803	126,007
Complementary imports	79	266	92	10	-	367	446
Australian production	1,100,720	462,684	138,999	4,662	112,025	718,370	1,819,090
Gross value added	542,831	. .	. .	. .	. .	. .	542,831
Gross domestic product	. .	. .	. .	. .	. .	. .	591,917
Source: Australian National Accounts: Input-Output Tables, 1998-99 (5209.0.55.001).

29.24 THE AUSTRALIAN ECONOMY, Flow of goods and services - 1998-99