Output and income components of GDP; activities, NA, 1969-2016

Table explanation

Description topics

Value added from the output

The way value added is formed by underlying components in the so-called production approach. In this approach value added equals the sum of value added over all branches (including non-commercial ones). Value added is thereby registered at basic prices.

Value at current prices

The values are expressed at prices of the reporting period. Alternatively, values may be expressed at constant prices. In this case, prices of a reference period are used.

Output basic prices

The ensemble of goods and services produced. Also called production. Three types of output are distinguished:
- market output: goods and services sold at a market or intended for sale at a market
- the own-account production of all goods that are retained by their producers for their own final consumption or gross fixed capital formation.
- non-market output: goods and services delivered for free or at economically non-significant prices to other units

Output is valued at basic prices. These are the prices experienced by the producers: product-related taxes have been subtracted from the original prices, subsidies haven been added to them. Costs of transportation, when charged separately by the producer, are not included. Changes in the values of financial and non-financial assets during the reference period are not included either.

Included is the output by all kind-of-activity units residing in the Netherlands, including those that are held by foreign owners. The kind-of-activity units include general government units and other non-commercial units.

Intermediate consumption (-)

Goods and services used as input in a production process, with the exception of capital goods. Intermediate consumption consists of goods reshaped into other goods or consumed entirely in the course of the production process (by definition, this holds for all hired services). According to international standards an acquired good or hired service is classified as a fixed asset rather than intermediate consumption when it lasts over one year in a production process. Goods and services that are part of intermediate consumption are valued at market prices at the time they were used.

Gross value added basic prices

The value of all goods and services produced ('production value' or 'output'), minus those that have been intermediately used upon production. Value added is rated at basic prices, the prices experienced by the producer: per branch product related taxes have been subtracted from the original prices, and subsidies haven been added to them.

Value added at market prices of the total economy (GDP) is calculated as follows:

  total value added at basic prices of industries
plus:  balance of taxes and subsidies on products
plus:  difference imputed and paid VAT
=  GDP (market prices)

VAT, taxes on imports and subsidies on re-exports cannot be attributed to individual industries. Therefore, GDP at market prices cannot be broken down completely by industry.
Value added can be valued gross (including consumption of fixed capital) or net (excluding consumption of fixed capital).

Value added from generation of income

The way total value added is formed by underlying components in the so-called income approach. In this approach the components are the incomes generated from production activities: compensation of employees and operating surplus / mixed income.

Value at current prices

The values are expressed at prices of the reporting period. Alternatively, values may be expressed at constant prices. In this case, prices of a reference period are used.

Compensation of employees

The compensation of employees is the total remuneration, in cash or in kind, payable by an employer to an employee in return for work done by the latter during an accounting period. The compensation of employees is equal to the sum of wages and salaries and employers' social contributions.

Total

Wages and salaries

Wages and salaries are the remunerations an employee receives in return for work done during an accounting period. Wages and salaries include social contributions, income taxes and other payments payable by the employee, including those withheld by the employer and paid directly to social insurance schemes, tax authorities etc. on behalf of the employee. The most important form of wages and salaries is wages in cash (including withheld income taxes and social contributions). Wages in cash are composed of regular gross wages, standard extra allowances (for instance for hazardous work), bonuses, overtime pay, tips and compensation for costs related to employment (for instance refunds of fares to and from work). Bonuses include holiday pay, tantième, gratifications, profit shares and a thirteenth or fourteenth month. Wages in kind occur if an employee benefits from his or her job besides being paid wages. Examples of payment in kind are private use of a company car, free housing, free food, lower interest rates on mortgages, free or cheap use of the company’s products or services, and company supplied or subsidised child care.

Employers' social contributions

Employers’ social contributions are social contributions payable by employers to social security schemes or other employment-related social insurance schemes to secure social benefits for their employees. Employer’s social contributions may be either actual or imputed. As set out by the ESA 2010, pay over periods in which no work is done due to illness or bad weather is registered as part of employers’ social contributions.

Gross operating surplus

The surplus that remains after compensation of employees and taxes less subsidies on production and imports have been subtracted from the sum of value added at basic prices. For the self-employed (who are part of the sector households) the surplus is called mixed income, it is partly a reward for their entrepreneurship compensation for their labour.

In the system of national accounts gross means that consumption of fixed capital (depreciation) has not been subtracted. When it has, net is used. Depreciation must be paid for from the gross operating surplus.

Gross

Consumption of fixed capital (-)

The decline in value of fixed assets owned, as a result of normal wear and tear and obsolescence.

For the estimation of the consumption of fixed capital the perpetual inventory method (PIM) is applied. The capital stock at the beginning of the year is brought to replacement value because of price changes. The fixed capital formation during the year is added to this capital stock. Next it is diminished with the value of capital goods discarded. This gives to value of capital stock at the end of the year. The consumption of fixed obtained by applying a depreciation percentage.
This method may differ considerably from the method used to calculate depreciation in business accounts, which is based on historical costs or fiscal life span.

Net

Gross operating surplus minus consumption of fixed capital.

Other taxes, subsidies on production

Other taxes on production, other subsidies on production and the difference between taxes and subsidies on production.

Taxes less subsidies

Other taxes on production less other subsidies on production.

Other taxes on production

Other taxes on production include all taxes on production paid by producers, not related to the value or volume of products produced or transacted. Examples are real estate tax and sewerage charges paid by producers.

Other subsidies on production

Other subsidies on production include all subsidies on production paid to producers, not related to the value or volume of products domestically produced or transacted. These are subsidies on agricultural products, subsidies on R&D and wage subsidies.

Gross value added basic prices

The value of all goods and services produced ('production value' or 'output'), minus those that have been intermediately used upon production. Value added is rated at basic prices, the prices experienced by the producer: per branch product related taxes have been subtracted from the original prices, and subsidies haven been added to them.

Value added at market prices of the total economy (GDP) is calculated as follows:

  total value added at basic prices of industries
plus:  balance of taxes and subsidies on products
plus:  difference imputed and paid VAT
=  GDP (market prices)

VAT, taxes on imports and subsidies on re-exports cannot be attributed to individual industries. Therefore, GDP at market prices cannot be broken down completely by industry.
Value added can be valued gross (including consumption of fixed capital) or net (excluding consumption of fixed capital).