RELATIONSHIP WITH OTHER ABS MACROECONOMIC STATISTICS
12.1 International merchandise trade statistics are important statistics in their own right, as measures of the nature, quantity and value of trade between Australia and the rest of the world. They are an important data source for other statistics produced by the ABS, such as the balance of payments, the national accounts, and the international trade price indexes. Selected international merchandise trade statistics are also used in and/or to validate other statistics produced by the ABS. For example, international merchandise trade data are used in validating data compiled for the Energy Accounts, Australia (cat. no. 4604.0).
12.2 This chapter begins by briefly describing the conceptual frameworks underlying economic statistics namely the International Merchandise Trade Statistics: Concepts and Definitions (IMTS 2010), System of National Accounts (SNA 2008) and Balance of Payments and International Investment Manual (BPM6). It then explains the relationships between Australia's international merchandise trade statistics and its balance of payments, national accounts and international trade price indexes, which all use international merchandise trade data.
12.3 IMTS 2010 was developed after 2008 SNA and BPM6. It therefore contains recommendations intended to make data compiled on an IMTS 2010 basis as consistent with the requirements of those systems as possible. However, the importance of providing statistics about the physical movement of goods across borders means that the main elements of IMTS 2010 are different to 2008 SNA and BPM6 which are based on the principles of economic ownership and residence. The conceptual differences between IMTS 2010 and BPM6 are fully explained in IMTS 2010, Annex F. These differences are explained in the context of Australia's statistics in Table 12.1 below.
BALANCE OF PAYMENTS STATISTICS
12.4 The balance of payments is a statement that summarises the economic transactions between residents and non-residents of the compiling economy during a specific time period. It consists of the goods and services account, the primary income account, the secondary income account, the capital account and the financial account.
12.5 The goods component of the goods and services account in Australia's balance of payments is largely compiled from international merchandise trade data. To compile goods data on a balance of payments basis adjustments are applied to international merchandise trade data to ensure that the transactions are correctly recorded in terms of coverage, timing and valuation.
12.6 Coverage adjustments are made to: include transactions which are not part of the international merchandise trade data; and remove transactions recorded in international merchandise trade which are not between residents and non-residents. Timing adjustments are made to ensure transactions are recorded in the period in which ownership changed, rather than in the period in which the transaction was recorded in international merchandise trade statistics. Valuation adjustments are made when the value recorded on the international merchandise trade transaction is found to be incorrectly estimated or reported.
12.7 Table 12.1 below lists and explains the differences between Australia's international merchandise trade statistics and the goods component of the balance of payments. These differences can be categorised as:
- differences between the standards (IMTS 2010 and BPM6)
- differences due to Australia's practical application of the international standards.
The type of adjustment and treatment in Australia's balance of payments is also explained.
TABLE 12.1 DIFFERENCES BETWEEN AUSTRALIA'S INTERNATIONAL MERCHANDISE TRADE AND BALANCE OF PAYMENTS STATISTICS
|Description of goods or difference||Difference between the standards (IMTS 2010 and BPM6) or Australia's practical application?||Australia's International Merchandise Trade Statistics||Australia's Balance of Payments - Goods||Type of adjustment/treatment in Australia's Balance of Payments|
|Goods for processing||difference in the standards||Included||Excluded if there is no change of ownership.||If there is no change of ownership the related processing services are included in Manufacturing services on physical inputs owned by others|
|Returned goods||difference in the standards||Included||Where the transactions are significant in value terms the returned good and the original export are excluded. Otherwise the treatment is the same as Australia's IMTS.||Coverage adjustment|
|Migrants effects||difference in the standards||Included||Excluded if identified and the transactions are significant in value terms. Otherwise the treatment is the same as Australia's IMTS.||Coverage adjustment|
|Illegal goods||difference in the standards||Excluded||Included if identified and the transactions are significant in value terms. Otherwise the treatment is the same as Australia's IMTS.||Coverage adjustment|
|Goods lost or destroyed after export (whether or not a change of ownership)||difference in the standards||Included in exports, excluded from imports.||Included in exports and imports if there is a change of ownership prior to loss or destruction, otherwise excluded from both. These goods are only identified and recorded differently in exceptional circumstances.||Coverage adjustment|
|Goods for construction projects imported by non-residents||difference in the standards||Included. |
Note: All construction in Australia is treated as being by residents. Therefore, there is no effective difference.
|Excluded if identified and the transactions are significant in value terms. Otherwise the treatment is the same as Australia's IMTS.||Coverage adjustment|
|Goods transferred to a buffer stock organisation||difference in the standards||Included||Included if/when ownership changes otherwise excluded. ||One example is a historical timing adjustment for wool|
|Goods that cross borders between related parties||difference in the standards||Included||Excluded if it is determined that there is no change of ownership and the transactions are significant in value terms.||Coverage adjustment|
|Non-monetary gold||difference in the standards||Included if there is a physical movement of the gold across the customs frontier.||Included if there is a change of ownership whether or not there is a physical movement of the gold across the customs frontier.||Coverage adjustment|
|Goods under merchanting(a)||difference in the standards||Excluded||Included when there is a change of ownership.||Goods sold under merchanting are not included in IMTS. Net exports of merchanting data are compiled separately.|
|Difference in time of recording||difference in the standards||Imports are recorded when the declaration is finalised by The Department of Home Affairs. Exports are recorded when the goods leave Australia.||Goods are recorded when ownership changes.||Timing adjustment for high value transactions. For imports the timing adjustment may also cover differences between the time of change of ownership and the timing of finalised import declarations from the Department of Home Affairs.|
|Mobile equipment, pipelines etc that involve a change of ownership between a resident and a non-resident without crossing Australia's customs frontier||difference in Australia's practical application||Excluded||Included||Coverage adjustment|
|Fish catch, minerals from the seabed and salvage which involve a change of ownership between a resident and a non-resident while outside Australia's customs territory||difference in Australia's practical application||Excluded||Included||Coverage adjustment|
|Bunkers, stores, ballast and dunnage involving a change of ownership between a resident and a non-resident while outside Australia's customs territory||difference in Australia's practical application||Excluded||Included||Coverage adjustment|
|Low value goods(b)||difference in Australia's practical application||Goods with values below the customs full declaration thresholds are excluded.||Included||Coverage adjustment|
|Statistical territory||difference in Australia's practical application||Statistical territory excludes Norfolk Is, Cocos Is, Christmas Is, Heard Is, McDonald Is, Ashmore and Cartier Is, Australia's Antarctic Territory, Australia's enclaves abroad and the JPDA ||For the balance of payments Australia's statistical territory aligns with its economic territory which includes Norfolk Is, Cocos Is, Christmas Is, Heard Is, McDonald Is, Ashmore and Cartier Is, Australia's Antarctic Territory, Australia's enclaves abroad and the JPDA ||Coverage adjustment|
|Value identified as incorrectly estimated or reported||difference in Australia's practical application||Included but value may be revised or incorrect.||Included but value may be revised||Valuation adjustment until international merchandise trade data are revised,|
|(a) BPM6 defines merchanting as 'the purchase of goods by a resident (of the compiling economy) from a non-resident combined with the subsequent resale of the same goods to another non-resident without the goods being present in the compiling economy'.|
(b) Measuring the value of low value goods is an encouragement in IMTS 2010. Encouragements are desirable practices.
12.8 There are also differences in the classification and presentation of goods credits (exports) and goods debits (imports) in the balance of payments. These are shown in Table 12.2 below.
TABLE 12.2 PRESENTATION OF MERCHANDISE EXPORTS AND IMPORTS IN AUSTRALIA'S BALANCE OF PAYMENTS
|Australia' International Merchandise Trade Statistics||Australia's Balance of Payments - Goods component|
|Merchandise exports ||Goods credits|
|classification of goods by HS, SITC, BEC||General merchandise|
|Net exports of goods under merchanting|
|Merchandise imports||Goods debits|
|classification by HS, SITC, BoPBEC, BEC||General merchandise|
|Capital goods |
|Intermediate and other merchandise goods |
12.9 The balance on goods and services is published in the monthly International Trade in Goods and Services, Australia
(cat no 5368.0) This publication presents the major aggregates for, and the balance on, international trade in goods and services (on a balance of payments basis) in original, seasonally adjusted and trend terms. Each quarter, Australia's balance of payments is published in Balance of Payments and International Investment Position, Australia
(cat. no. 5302.0).
In this publication, the original quarterly data for the latest quarter is the sum of the monthly data published in International Trade in Goods and Services, Australia
(cat. no. 5368.0) with any changes kept to a minimum.
Conceptually, Australia's balance of payments is part of the Australian System of National Accounts (ASNA). The exports and imports series shown in the national accounts are identical to those in the balance of payments.
12.11 The ASNA is designed to provide a systematic summary of economic activity and has been developed to facilitate the practical application of economic theory. At their summary level, the accounts reflect key economic flows: production, income, consumption, investment and saving. At their more detailed level, they are designed to present a statistical picture of the structure of the economy and the detailed processes that make up the domestic production and its distribution. For many analysts, gross domestic product (GDP) is the key economic aggregate. GDP is based on the concept of value added
which is the unduplicated value of goods and services produced in the Australian economy in any period.
12.12 In the national accounts, exports and imports are included in the expenditure based measure of GDP. This measure is derived as the sum of final consumption expenditure by government and households, plus investment in fixed capital formation and changes in inventories, plus exports
imports (of both goods and services). See box 12.3 below.
BOX 12.3 INTERNATIONAL MERCHANDISE TRADE STATISTICS AS INPUT TO THE DERIVATION OF GDP (E)
|GDP (E)||= Final consumption expenditure|
+ Gross fixed capital formation
+ Changes in inventories
+ Exports (includes goods and services)
- Imports (includes goods and services)
12.13 The Australian national accounts are compiled according to the 2008 SNA. Australia's application of this standard is described in the Australian System of National Accounts: Concepts, Sources and Methods
(cat. no. 5216.0).
Private new capital expenditure
12.14 Estimates of expenditure on machinery and equipment (a component of private gross fixed capital formation) is another component of GDP(E). For recent quarters these estimates are compiled mainly from data collected in the quarterly Survey of New Capital Expenditure and published in Private New Capital Expenditure and Expected Expenditure, Australia
(cat. no. 5625.0).
12.15 Details of large value capital equipment imports reported in International Trade in Goods and Services, Australia
(cat. no. 5368.0) are used as a coverage check to ensure all large transactions have been included in the Survey of New Capital Expenditure. There is also regular communication between staff involved in compiling capital expenditure, balance of payments and international merchandise trade statistics to ensure coherent coverage and treatment of machinery and equipment and engineering construction projects.
Chain volume measures
12.16 Chain volume measures are estimates of growth (or the change in volume) after the direct effect of price changes have been eliminated.
Chain volume measures are published, along with other measures of Australia's economy, in the quarterly Australian National Accounts: National Income, Expenditure and Product
(cat. no. 5206.0) and Balance of Payments and International Investment Position, Australia
(cat. no. 5302.0), and in the annual Australian System of National Accounts
(cat. no. 5204.0).
12.17 Chain volume measures for approximately 70% of export commodities are obtained by quantity revaluation using quantity information recorded in the international merchandise trade statistics, on a quarterly basis. The remaining 30% are calculated by deflating current price values using export price indexes. The compilation of chain volume measures is described in detail in the ABS publication Spotlight on National Accounts, July 2011
(cat. no. 5202.0).
12.18 The chain volume measures of coverage and timing adjustments that are made to bring exports as recorded in the international merchandise trade statistics onto the required national accounts/balance of payments basis are derived using relevant implicit price deflators from the underlying quantity data, or the export price index or a combination of both.
12.19 Chain volume measures for import commodities are obtained by price deflation. Chain volume measures for merchandise trade (on a Balance of Payments basis) are also constructed in the Balance of Payments and International Investment Position, Australia
(cat. no. 5302.0) publication using a similar methodology.
12.20 Input-output tables also use international merchandise trade statistics. These tables present a detailed picture of the supply and use of all products in the economy and the income generated from production. In simple terms imports are part of the supply of products to the Australian economy and exports are one of the ways that products are used (and so are included in the use table).
12.21 In the compilation of input-output tables, international merchandise trade data are reclassified to Input Output Product Classifications (IOPCs), which are then aggregated to the Input Output Product Groups (IOPGs). To be consistent with the rest of the national accounts the international merchandise trade data (by IOPC and IOPG) are then adjusted to a balance of payments basis.
12.22 Input-output tables are published annually in the Australian National Accounts: Input-Output Tables
(cat. no. 5209.0.55.001). Further information about the tables can be found in that publication or for a detailed explanation see Chapter 22 of Australian System of National Accounts: Concepts, Sources and Methods
(cat. no. 5216.0).
12.23 Australia's national accounts includes accounts for each of Australia's states and territories. Estimates of the components of state final demand (which includes exports and imports of goods) are published quarterly in the Australian National Accounts: National Income, Expenditure and Product
(cat. no. 5206.0). A more complete set of accounts and estimates of gross state product are published annually in the publication Australian National Accounts: State Accounts
(cat. no. 5220.0). The exports and imports data in these tables are largely sourced from international merchandise trade statistics.
INTERNATIONAL TRADE PRICE INDEXES
12.24 Export and import price indexes measure price movements for a subset of Australian exports and imports. Selected international merchandise trade statistics are used to provide coverage checks for updating price samples with new commodities and contributors. The information is also used for annually re-weighting both indexes each September quarter.
12.25 In addition, price samples are supplemented with unit prices for selected homogeneous commodities, calculated directly from international merchandise trade data. Export and import price indexes are released quarterly, categorised by commodity and industry, in the ABS publication International Trade Price Indexes, Australia
(cat. no. 6457.0).
12.26 International price pressures can have a significant impact on domestic prices, directly through exchange rates and imports, and indirectly through exports. There is considerable policy interest in import prices as a potential source of inflation and in the impact of export prices on national income. In disaggregated form, the export and import price indexes are used extensively in Australia's system of national accounts and balance of payments to deflate external trade values to provide indicators of the volume of international trade.