Archive:Consolidated supply, use and input-output tables

A comparison of the EU and the United States economies

Data extracted in May 2016. Most recent data: Further Eurostat information, Main tables and Database. Planned update of the article: October2016.

This article presents the latest available European consolidated supply, use and input-output tables for the period 2005 to 2014 in terms of the NACE Rev. 2 classification, together with some practical and methodological background information. Tables are disseminated under the new ESA 2010 methodology. European tables for the years 2012 to 2014 are based on projection from the 2011 European consolidated tables. Back data for the years 2005 to 2009 are results of projection methods based on the 2010 European consolidated tables.

The consolidated supply, use and input-output tables are used for macro-analysis of the European Union (EU) and euro area (EA) economies. They give an annual snapshot of overall production and use of products, distinguishing 64 NACE activities and 64 products from the CPA classification. The US data were compiled by Eurostat using the same classifications.

The data are broken down into 10 activities and 10 product groups.

Figure 1: Sectoral structure of output in the EU, the euro area (year 2014) and in the US (year 2012) (in % of output) - Source: Eurostat (naio_10_cp)

Figure 2: Input coefficients for the European Union, 2014 by product groups - Source: Eurostat (naio_10_cp)

Figure 3: Input coefficients for the US, 2012 by product groups - Source: Eurostat (naio_10_cp)

Figure 4: Composition of the EU revenues, 2014, by product groups - Source: Eurostat (naio_10_cp)

Figure 5: Composition of the US revenues, 2012, by product groups - Source: Eurostat (naio_10_cp)

Figure 6: Output multipliers for the EU (2014) and the US (2012), by product groups - Source: Eurostat (naio_10_cp) and own calculations

Figure 7: Employment and embodied employment in exports in the EU, the euro area and the US (thousand hours worked) - Source: Eurostat (naio_10_cp) and own calculations

Figure 8: Embodied employment in exports in the EU, the euro area and the US (in % of thousand hours worked) - Source: Eurostat (naio_10_cp) and own calculations

Table 1:Embodied employment in exports (in thousand of hours worked) - Source: Eurostat (nama_10_a10_e) and BEA (US)

Main statistical findings

In 2014, the EU was more oriented towards industry, construction and trade than the US economy in 2012. Industrial products and trade services represent 29 % and 19 % respectively of total EU output (see Figure 1). In the United States, industrial products represent 24 % of total output, followed by trade services and administration services with 17 %. The euro area has the same dominant groups as the EU, with industrial products and trade services (wholesale and retail trade, transportation and storage, accommodation and food services) accounting for 31 % and 18 % respectively of total output. Construction works is a significant area of industrial output in both the EU and the United States, with 7 % and 4 % respectively. In all cases, agricultural products represent a very low proportion of total output (2 % in 2014 for EU and euro area, same for US in 2012).

The US economy is more oriented towards services and public administration than the EU’s

Figure 1 shows that, unlike the EU economy, the US economy is more geared to services than industry, construction and trade. All services account for 53 % of total output in the United States, but only 44 % in the EU (43 % for the EA). Financial services (including insurance and real-estate services) represent 16 % of total output in the United States, a higher proportion than in the EU (12 %). In 2012, 17 % of US output came from public administration services (including defence, education, human health and social work services), while the EU figure was 13 % in 2014.

Different cost structures in the EU and the United States

Intermediate consumption represents the most costly input in the EU economy, while labour input dominates in the US economy. The input-output (I-O) tables show the production structures of the EU and US economies. The columns in the tables represent the cost structure of the industry and the rows the composition of its revenues. The value added is the difference between output and intermediate consumption.

The I-O tables highlight some differences between the two economies (see Figures 2 and 3): except for agricultural products and public administration services, input from intermediate consumption is more important for EU than for the United States. As regards industrial products, intermediate consumption makes up 59 % of the total for the EU, as against 51 % for the United States. In trade services and accommodation services, intermediate consumption accounts for 46 % of total output in the EU but 38 % in the United States. For agricultural products, the proportion represented by intermediate consumption is comparable in the two economies with 52 %. For public administration services, intermediate consumption is less in the EU than in the United States as a proportion of output (24 % as against 34 %).

Intermediate consumption

As regards the composition of revenues, the EU uses a greater proportion of its products for intermediate consumption than the United States: 52% for the EU and 39% for the US. In Figures 4 and 5, the first bar on the left shows intermediate consumption as a proportion of total uses. For all product groups except agricultural products and real-estate services, the proportion is higher in the EU than in the United States. For both economies, the highest proportion (around 75 %) relates to professional and support services. Proportions for final consumption are comparable between the EU and the United States, except for agricultural products and trade, transportation, accommodation and food services. 25 % of the EU’s agricultural production is for final consumption and only 4 % for exports, while 14 % of US agricultural production is for final consumption and 11 % for exports. The other product group for which there are differences is trade, transportation, accommodation and food services, where 44 % of EU output goes to final consumption, while in the United States the proportion is 56 %.

Impact of final demand on the EU and US economies

Output multipliers reflect the direct and indirect requirements of domestic production per unit of final demand. One additional unit of final demand for agricultural products would generate around two units of revenue/output in both the United States and the EU (Figure 6). In the EU, the biggest output multiplier is for industrial products, where one additional unit of final demand would create 2.2 units of output (1.9 in the United States in 2012). Output multipliers are generally higher in the EU than in the United States, i.e. the European economy would produce more than the US economy in response to an increase of one unit of final demand. The one exception is public administration, defence, education and health services, where the multiplier for the United States (1.6) is larger than the EU’s (1.4).

Embodied employment in exports in the EU, the euro area and the United States

Embodied employment in exports represent the number of persons employed by the firms that are directly engaged in exporting activities (direct effects) including also those used by upstream industries for the supply of the necessary inputs to these firms (indirect effects).

Over the years 2010 to 2014, the employment by firms engaged in export activities (directly and indirectly) measured in hours worked decreased on average by 0.8% each year in the EU and rose with an annual average of 3.7 % in the euro area. In the United States, such employment increased by 8% on average from 2010 to 2012 (see Table 1). Embodied employment in exports represents 13 % of total employment in the EU, 19 % in the euro area and 6 % in the United States (see Fig 7).

In 2014, the production of manufactured products for export accounted for an average of 65 % of embodied employment in EU, 60 % in EA and 37 % in US exports (see Fig 8). Services in the trade, transport, accommodation and food, and information and communication sectors accounted for 18 % of the total employment by firms engaged in export activities in the EU, 20 % in the EA and 23 % in the United States.

Data sources and availability

On the basis of the European I-O tables, a standard input-output technique was used to calculate the results of the Leontief quantity model applied to employment. First, a domestic input coefficient matrix (A) was calculated for each homogeneous branch of activity, showing direct input requirements for the production of one unit of output. Then the Leontief inverse matrix (the inverse of I — A, being I, the identity matrix) was computed to obtain the matrix of output multipliers. Next, the inverse matrix was post-multiplied by a column vector of exports to calculate the total output embodied in those exports. Finally, output coefficients of employment pre-multiplied the former results to obtain the figure for employment embodied in exports.

Embodied employment in exports is measured by hours worked of persons employed by firms directly engaged in export activities (direct effects), including those employed by upstream industries for the supply of the necessary inputs (indirect effects);

Eurostat compiles supply and use tables for the EU, the euro area and the US ( BEA) under the ESA 2010 methodology. All statistics relating to national accounts are now developed in this methodological framework, which is the European adaptation of the 2008 System of National Accounts. For the US, the make table, use table at producers values are available from the Bureau of Economic Analysis (BEA).

Context

The data are collected under the European System of National and Regional Accounts (ESA 2010) transmission programme. EU Member States transmit supply and use tables (SUTs) to Eurostat annually and input-output tables (IOTs) every five years, up to 36 months after the end of the reference period.

The SUTs give detailed information on production processes, interdependencies in production, the use of goods and services, and income generated in production. They form the basis for symmetrical IOTs, which are produced by applying certain assumptions to the relationship between outputs and inputs and are used by policy-makers for input-output analysis.

Environmentally extended (EE) IOTs, an extension in Eurostat, represent another powerful analytical instrument to inform policy.

Eurostat has compiled consolidated European tables for the EU-28 and the EA in ESA 2010 from reference year 2010 onwards.

Further Eurostat information

Publications

Database

ESA Supply, use and Input-output tables , see:

Supply, use and Input-output tables (naio_10_cp)

Dedicated section

ESA Supply, Use and Input-output tables

Methodology / Metadata

Source data for tables, figures and maps (MS Excel)

Consolidated supply, use and input-output tables - graphs and tables

External links

International Input-Output Association (IIAO) - IIAO newsletters