national accounts gross fixed capital formation kevin naidoo seminar on developing a programme for...
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NATIONAL ACCOUNTS Gross Fixed Capital
Formation
NATIONAL ACCOUNTS Gross Fixed Capital
Formation
Kevin NaidooKevin Naidoo
Seminar on Developing a programme for the implementation of the
2008 SNA and supporting statistics17-19 October 2012
Pretoria, South Africa
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Gross Fixed Capital FormationGross Fixed Capital FormationGross Fixed Capital FormationGross Fixed Capital Formation
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Domestic fixed investment on new assetsDomestic fixed investment on new assets
– according to institutionaccording to institution• Private businesses and householdsPrivate businesses and households• Public corporationsPublic corporations• General governmentGeneral government
– according to economic activityaccording to economic activity
– according to asset typeaccording to asset type• Residential buildingsResidential buildings• Non-residential buildingsNon-residential buildings• Construction worksConstruction works• Transport equipmentTransport equipment• Computers and related equipmentComputers and related equipment• Machinery and equipmentMachinery and equipment• Transfer costsTransfer costs
Gross Capital FormationGross Capital FormationGross Capital FormationGross Capital FormationGross Fixed Capital FormationGross Fixed Capital FormationGross Fixed Capital FormationGross Fixed Capital Formation
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Benchmark yearBenchmark year Comprehensive revisions of national accounts estimates are Comprehensive revisions of national accounts estimates are
necessary in order to incorporate four major types of necessary in order to incorporate four major types of improvements:improvements:
– – Changes in definitions and classification to portray Changes in definitions and classification to portray developments in the South African economy more accurately.developments in the South African economy more accurately.
– – Statistical changes to reflect the introduction of new and Statistical changes to reflect the introduction of new and improved methodologies, and the incorporation of newly improved methodologies, and the incorporation of newly available and revised source data.available and revised source data.
– – Changes in presentation to reflect the changes in definitions Changes in presentation to reflect the changes in definitions and the statistical changes.and the statistical changes.
– – Rebasing the estimates at constant prices, by moving the base Rebasing the estimates at constant prices, by moving the base period to a more recent year so that volume indicators reflect period to a more recent year so that volume indicators reflect the current structure of the economy more accuratelythe current structure of the economy more accurately
Gross Capital FormationGross Capital FormationGross Capital FormationGross Capital FormationGross Fixed Capital FormationGross Fixed Capital FormationGross Fixed Capital FormationGross Fixed Capital Formation
Collection of dataCollection of dataCollection of dataCollection of data
Private sectorPrivate sector AgricultureAgriculture Info from Info from Department of Agriculture Department of Agriculture
MiningMining N01’s, QFS, N01’s, QFS, Chamber of mines, Interim financial reports, Chamber of mines, Interim financial reports,
Annual financial statementsAnnual financial statements
ManufacturingManufacturing N01’s , QFS (N01’s , QFS (extrapolation is usedextrapolation is used))
Electricity, gas and waterElectricity, gas and water N01’sN01’s , Interim financial reports, Annual financial statements , Interim financial reports, Annual financial statements
ConstructionConstruction N01’sN01’s , QFS , QFS ((extrapolation is usedextrapolation is used))
TradeTrade N01’s, QFS (N01’s, QFS (extrapolation is usedextrapolation is used)) 5
Collection of data - Collection of data - continuedcontinuedCollection of data - Collection of data - continuedcontinued
Private sector – Private sector – continuedcontinued Transport and communicationTransport and communication BOP imported ships and aircrafts, commercial vehicles sold, BOP imported ships and aircrafts, commercial vehicles sold,
N01’s, interim reportsN01’s, interim reports
FinanceFinance Monthly sample survey of buildings statistics from Stats SA Monthly sample survey of buildings statistics from Stats SA
((4 months moving average for houses and 9 months moving 4 months moving average for houses and 9 months moving average for flats , offices, etcaverage for flats , offices, etc))
BA900 from Money and banking division is used to get BA900 from Money and banking division is used to get information for banksinformation for banks
Insurers data is obtained from Capital market and flow of Insurers data is obtained from Capital market and flow of funds divisionfunds division
Transfer costs information is obtained from transfer duties Transfer costs information is obtained from transfer duties compiled by Capital market and flow of funds divisioncompiled by Capital market and flow of funds division
Real estate and business services data is obtained from QFS Real estate and business services data is obtained from QFS ((extrapolation is usedextrapolation is used))
ServicesServices QFS (QFS (extrapolation is usedextrapolation is used)) 6
Collection of data- Collection of data- continuedcontinuedCollection of data- Collection of data- continuedcontinued
Public corporationsPublic corporations Overall N01 informationOverall N01 information
VerificationVerification■ F04 for quarterly estimatesF04 for quarterly estimates Annual surveys of the corporations Annual surveys of the corporations
conducted by the National accountsconducted by the National accounts Annual reports mainly from all the Annual reports mainly from all the
corporations that are included in the N01 corporations that are included in the N01 surveysurvey
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Collection of data- Collection of data- continuedcontinuedCollection of data- Collection of data- continuedcontinued
General governmentGeneral government Information from Public finance divisionInformation from Public finance division
VerificationVerification
Statistics Releases from StatsSA such as:Statistics Releases from StatsSA such as: Actual and Expected Capital Expenditure by the Public Actual and Expected Capital Expenditure by the Public
Sector: Sector: P9101.1P9101.1 Consolidated Expenditure by the General Government Consolidated Expenditure by the General Government
Sector: Sector: P9119.4P9119.4 National Government Expenditure: National Government Expenditure: P9119.3P9119.3 Provincial Government Expenditure: Provincial Government Expenditure: P9121P9121 Financial Statistics of local authorities: Financial Statistics of local authorities: P9114P9114
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Process of estimationProcess of estimationProcess of estimationProcess of estimation
Residential buildings
Non- Res Construction Transport Computer equipment
Machinery Total
Agric 902 885 2,199 1,215 549 5,339 11,090
Mining 1,588 3,898 19,783 2,985 1,487 24,802 54,545
Manufacturing 0 8,222 8 1,349 4,006 69,179 82,765
Electricity 10 175 73,022 1,212 163 2,335 76,916
Construction 0 314 0 4,031 155 7,245 11,745
Trade 0 7,690 30 8,663 3,450 16,913 36,746
Transport 0 3,195 27,609 38,550 5,826 19,578 94,757
Finance 47,419 13,868 220 10,347 6,962 8,718 87,534
Services 4,105 17,141 51,624 6 3,840 10,578 87,294
Total 54,024 55,388 174,495 68,358 26,438 164,687 543,392
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Process of estimation - Process of estimation - continuedcontinuedProcess of estimation - Process of estimation - continuedcontinued
Residential buildingsResidential buildings Cement salesCement sales BERBER Non-residential buildingsNon-residential buildings Cement salesCement sales BERBER Construction worksConstruction works Cement salesCement sales BERBER Transport equipmentTransport equipment Sales of commercial vehiclesSales of commercial vehicles Computers, machinery and other equipmentComputers, machinery and other equipment Imports of machinery (BOP)Imports of machinery (BOP) Financial lease indication - intentions for capexFinancial lease indication - intentions for capex
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Judgemental estimationsJudgemental estimationsJudgemental estimationsJudgemental estimations
Budget review for public corporation Budget review for public corporation projectsprojects
Nedbank capital expenditure project Nedbank capital expenditure project listinglisting
Buildings plans passed trendBuildings plans passed trend Engineering newsEngineering news Mining weeklyMining weekly Creamer Media’s Research ChannelCreamer Media’s Research Channel Trend of credit extended to companiesTrend of credit extended to companies
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DeflationDeflationDeflationDeflation Residential buildingsResidential buildings Joint Building Contracts Committee (JBCC) Contract Price Joint Building Contracts Committee (JBCC) Contract Price
Adjustment Provision Work Groups Indices published by Statssa Adjustment Provision Work Groups Indices published by Statssa (PO151)” - item 180 “lump sum domestic buildings(PO151)” - item 180 “lump sum domestic buildings
Non-residential buildingsNon-residential buildings Joint Building Contracts Committee (JBCC) Contract Price Joint Building Contracts Committee (JBCC) Contract Price
Adjustment Provision Work Groups Indices published by Statssa Adjustment Provision Work Groups Indices published by Statssa (PO151)” - item 181 “Commercial/industrial buildings”(PO151)” - item 181 “Commercial/industrial buildings”
Construction worksConstruction works Safcec ‘s combination of indices i.e. for labour, materials, plant and Safcec ‘s combination of indices i.e. for labour, materials, plant and
fuel.fuel. Incorporate three other indices form the PPI Incorporate three other indices form the PPI P0142.1 P0142.1 published by published by
Stats SA, namely building and construction, electrical engineering Stats SA, namely building and construction, electrical engineering and mechanical engineering.and mechanical engineering.
Certain components form the JBCC publications that are related to Certain components form the JBCC publications that are related to construction activities i.e. earthworks, concrete (excluding formwork), construction activities i.e. earthworks, concrete (excluding formwork), formwork, reinforcement, roadwork and mechanical servicesformwork, reinforcement, roadwork and mechanical services
Transport equipmentTransport equipment Statssa’s producer price index – P0142.1Statssa’s producer price index – P0142.1 Computer equipment Computer equipment Statssa’s producer price index – P0142.1Statssa’s producer price index – P0142.1 Machinery and other equipmentMachinery and other equipment Statssa’s producer price index – P0142.1Statssa’s producer price index – P0142.1 12
Consumption of fixed capital Consumption of fixed capital Consumption of fixed capital Consumption of fixed capital
Type of asset Sector LifetimeResidential buildings 50 yearsNon-residential buildings 50 years
Construction works Agriculture 80 years
Mining 30 years
General government 80 years
Other 50 yearsTransport equipment 8 years
Computer equipment 5 years
Machinery & other equipment
Manufacturing 8 years
Mining & Electricity, gas and water
16 years
Other 10 years13
The consumption of fixed capital can be defined as the decline in the current value of the stock of fixed assets owned by a producer as a result of physical deterioration or normal accidental damageEstimates are based on a straight-line method
n
1* ]I[
n = WV nt
Fixed capital stockFixed capital stockFixed capital stockFixed capital stock
Fixed capital stock is the accumulation of gross fixed Fixed capital stock is the accumulation of gross fixed capital formation over a particular period less capital formation over a particular period less consumption of fixed capital. consumption of fixed capital.
For a certain period For a certain period
KVRKVRt t = KVR= KVRt-1 t-1 + IVS+ IVSt t - WDE- WDEtt
Where KVR = Capital stockWhere KVR = Capital stock
IVS = Gross fixed capital formationIVS = Gross fixed capital formation
WDE = Consumption of fixed capitalWDE = Consumption of fixed capital
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Thank YouThank YouThank YouThank You
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