Output (P.1)

3.14 Definition:

Output consists of the products created during the accounting period.

Particular cases included are:

  1. the goods and services which one local KAU provides to a different local KAU belonging to the same institutional unit;
  2. the goods which are produced by a local KAU and remain in inventories at the end of the period in which they are produced, whatever their subsequent use.
However, goods or services produced and consumed within the same accounting period and within the same local KAU are not separately identified. They are therefore not recorded as part of the output or intermediate consumption of that local KAU.

3.15 When an institutional unit contains more than one local KAU, the output of the institutional unit is the sum of the outputs of its component local KAUs, including outputs delivered between the component local KAUs.

3.16 Three types of output are distinguished in the ESA:

  1. market output (P.11);
  2. output produced for own final use (P.12);
  3. other non-market output (P.13).
This distinction is also applied to local KAUs and institutional units:
  1. market producers;
  2. producers for own final use;
  3. other non-market producers.
The distinction between market, for own final use and other non-market is fundamental, because it determines the valuation principles to be applied to output: market output, output produced for own final use and total output of market producers and producers for own final use are valued at basic prices, while the total output of other non-market producers (local KAUs) is valued from the costs side. The total output of an institutional unit is valued as the sum of the total outputs of its local KAUs and depends thus also on the distinction between market, for own final use and other non-market (see paragraphs 3.54. – 3.56.). Furthermore, the distinction is also used to classify institutional units by sector (see paragraphs 3.27. – 3.37.).

The distinctions are defined in a top-down way, i.e. the distinction is first defined for institutional units, then for local KAUs and then for their output. As a consequence, the exact meaning of the distinction on the product level (i.e. the definition of the concepts of market output, output for own final use and other non-market output) can only be understood by looking also at features of the institutional unit and the local KAU that produce that output.

After the general definitions of the three types of output and of the three types of producers (see paragraphs 3.17. – 3.26.), the distinction between market, for own final use and other non-market is presented in a top-down way.

3.17 Definition:

Market output consists of output that is disposed of on the market or intended to be disposed of on the market.

3.18 Market output includes:

  1. products sold at economically significant prices;
  2. products bartered;
  3. products used for payments in kind (including compensation of employees in kind and mixed income in kind);
  4. products supplied by one local KAU to another within the same institutional unit to be used as intermediate inputs or for final uses;
  5. products added to the inventories of finished goods and work-in-progress intended for one or other of the above uses (including natural growth of animal and vegetable products and uncompleted structures for which the buyer is unknown).
3.19 Definition:

In the ESA, the economically significant price of a product is defined partly in relation to the institutional unit and local KAU that has produced the output (see paragraphs 3.27. – 3.40.). For example, by convention all the output of unincorporated enterprises owned by households sold to other institutional units is sold at economically significant prices, i.e. is to be regarded as market output. For the output of some other institutional units, output is only sold at economically significant prices when more than 50% of the production costs is covered by sales (see paragraphs 3.32. – 3.37.).

3.20 Definition:

Output produced for own final use consists of goods or services that are retained either for final consumption by the same institutional unit or for gross fixed capital formation by the same institutional unit.

3.21 Products retained for own final consumption can only be produced by the household sector. Typical examples are:

  1. agricultural products retained by farmers;
  2. housing services produced by owner-occupiers;
  3. household services produced by employing paid staff.

3.22 Products used for own gross fixed capital formation can be produced by any sector. Examples are:

  1. special machine tools produced by engineering enterprises;
  2. dwellings, or extensions to dwellings, produced by households;
  3. own-account construction, including communal construction undertaken by groups of households.
3.23 Definition:

Other non-market output covers output that is provided free, or at prices that are not economically significant, to other units.

Other non-market output (P.13) can be subdivided into two items: “Payments for the other non-market output” (P.131), which consist of various fees and charges, and “Other non-market output, other” (P.132), covering output that is provided free.

3.24 Definition:

Market producers are local KAUs or institutional units the major part of whose output is market output.

It should be noted that if a local KAU or institutional unit is a market producer its main output is by definition market output, as the concept of market output is defined after having applied the distinction market, for own final use and other non-market to the local KAU and institutional unit that have produced that output.

3.25 Definition:

Producers for own final use are local KAUs or institutional units the major part of whose output is for own final use within the same institutional unit.

3.26 Definition:

Other non-market producers are local KAUs or institutional units whose major part of output is provided free or at not economically significant prices.