Value added by industry is an indicator of business productivity in The Hills Shire. It shows how productive each industry sector is at increasing the value of its inputs. It is a more refined measure of the productivity of an industry sector than output (total gross revenue), as some industries have high levels of output but require large amounts of input expenditure to achieve that.
Detailed notes about how the figures are derived can be found in the data notes section.
Value-added is the value of sales generated by each industry, minus the cost of its inputs. Estimates are modelled using the NIEIR methodology, and presented in constant dollars (adjusted for inflation) at the year specified in the table header. It is calculated by subtracting the cost of industry inputs from total sales generated.
Value added data are derived from ABS State Accounts, distributed among regions by industry according to estimates of industry value-added, Census and ABS Labour Force based employment and industry earnings data from the Australian Taxation Office. An estimate of labour productivity is derived from ATO data from each region and applied to the industry workforce.
Detailed definition from NIEIR:This is equal to the total value of sales (a) less purchases of inputs from other businesses. The word ‘gross’ means that no further deduction is made for depreciation. However in regional context it also means that it includes public/major company/government enterprise surplus which in the main will not abe distributed to residents. This is a National Accounts concept. It is similar to the tax base for the GST, but includes value added by organisations not subject to GST. It excludes indirect taxes such as GST (hence ‘at factor cost).
The difference between (ba) and (a) varies by industry according to the prominence of inputs purchased from other businesses. The ratio of (ba) to (a) varies by industry, typically around 25 per cent for manufacturing and construction, 50 per cent for retail and public administration, 75 per cent for labour-intensive non-profit public services like health. The aggregate ratio for Monash is remarkably constant at around 41 per cent.
Industry (headline) gross product (value added) comprises amounts paid to employees (wages etc) and costs in respect of capital (depreciation, interest, profits), sometimes referred to as gross surplus. It is derived from industry activity located within LGA boundaries. By convention, capital costs in government production are imputed at low rates. Industry gross product excludes the gross surplus generated by public/major companies and public enterprises which in the main be distributed to stakeholders outside the LGA. It is the sum of wages and mixed income for the LGA.
Value added is calculated by estimating the employment in each region using the ABS Labour Force Survey, working out the component of total economic output that this relates to, and adjusting for differences in worker productivity using ATO income data.
Please note that these modelled estimates are subject to change. Estimates are reviewed when more recent and robust data becomes available, particularly when new National or State Accounts data are released by the ABS, or new tax office income data are released. Most recent financial year estimates are based on a combination of factors including Centrelink and Labour Force Survey data, which is replaced by ATO income data when it becomes available. As a result of this, revisions to the most recent 6 quarters (18 months) of data should be anticipated by users, which could change the statistical outcomes.
Source: National Institute of Economic and Industry Research (NIEIR) ©2012
Please note that NIEIR modelled estimates are subject to change and review for the most recent two financial years.
Please refer to the data notes for more information.
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