Gross fixed capital formation – Sources and methods

State splits for new and used dwellings are constructed using new residential building data from the Building Activity Survey.

State level estimates are constructed by allocating GFS data for each state to the relevant state. Estimates for the Commonwealth jurisdiction are allocated using a proportion based on public employment from the Survey of Employment and Earnings (SEE).

Total public and private sector new and used dwellings are deflated using Residential Property Price Indexes, Eight Capital Cities. State indexes are derived as a weighted average of a price index for contract-built houses and non-contract-built houses.

Alterations and additions to existing dwellings are estimated using data from the regular Building Activity Survey and from the periodic Household Expenditure Survey (HES).

State estimates are constructed using Alterations and additions to residential buildings from BACS, this excludes estimates under $10,000. These are modelled based on data from the HES. Between HES years the under $10,000 component is assumed to move in the same proportion as items from the BACS survey.

Current price estimates are deflated by applying a two quarter ending moving average of the project home price index from Residential Property Price Indexes, Eight Capital Cities.

The main source is the quarterly Building Activity Survey. This survey covers work done on private sector owned non-residential building valued at $50,000 or more.

The following adjustments are made at the state level:

• for work done on non-residential building with an approval value of less than $50,000;
• where approvals are not obtained such as for farm buildings; and
• for services involved in the construction of the building such as architectural fees.

State-specific price indexes are derived as a three-quarter ending moving average of new building price indexes.

The main source is the Engineering Construction Survey.

As farm non-dwelling construction is not included in the ECS, adjustments are made to capital formation to estimate expenditure of farm non-dwelling construction.

Current price estimates are deflated using a composite of price indexes for roads, dams, sewerage, electricity infrastructure and telecommunications infrastructure. For all but road construction, these price indexes are derived for Australia only.

The price indexes used are from the Producer Price Indexes, Australia, Wage Price Index, Australia and the Consumer Price Index, Australia.

The estimates from both the BACS and the ECS are adjusted to reflect net purchases of second-hand assets from the public sector by using Government Finance Statistics data.

Current price estimates are deflated for each state using the state-specific implicit price deflator for the aggregate of private new non-dwelling building and new engineering construction.

State splits are sourced from Survey of New Capital Expenditure (Private New Capital Expenditure and Expected Expenditure, Australia). This survey excludes a number of industries for which adjustment are made including:

• Agriculture, forestry and fishing industry - import statistics from International Merchandise Imports, Australia.
• Public administration and safety, Education and training and Health care and social assistance industries are produced annually from GFS data, with estimates modelled quarterly.

Current price estimates of GFCF for new machinery and equipment are deflated using state-specific chain price indexes derived from the Consumer Price Index, Australia; Producer Price Indexes, Australia; International Trade Price Indexes, Australia; and several price indexes from overseas, including the US Bureau of Economic Analysis (BEA) hedonic computer price index.

Net purchase of second-hand assets includes:

• net purchases of second hand assets from the public sector from GFS data;
• used motor vehicle sales from businesses to households is allocated to states from national ABS Survey of Motor Vehicle Use and motor vehicle sales data available through the VFACTS service; and
• used equipment sold overseas (which is deducted from private GFCF). Estimates of merchandised goods are used to value used equipment sold overseas.

Current price estimates of GFCF for net purchases of second-hand machinery and equipment are deflated using state-specific chain price indexes derived from the Consumer Price Index, Australia; Producer Price Indexes, Australia; International Trade Price Indexes, Australia; and several price indexes from overseas, including the BEA hedonic computer price index.

Interpolation of annual estimates.

The volume of capital expenditure on R&D is calculated by deflating the cost-based expenditure values. These current price estimates are deflated using price indexes for labour inputs and other current expenditure used as inputs into the R&D products. This is undertaken at state level. Quarterly estimates for state, like national, are calculated using trend.

Quarterly estimates are obtained from Mineral and Petroleum Exploration, Australia.

Current price estimates are deflated using a composite index of the Wage Price Index for ANZSIC Division B Mining Division and a producer price index for equipment and material categories associated with exploration—steel pipes and tubes, non-ferrous pipe fittings, iron and steel casting and forging, and other industrial machinery.

Interpolation of annual estimates.

Volume estimates are produced by deflating current prices estimates with the Manufacturing Industry (APMI) price index.

Interpolation of annual estimates.

Volume estimates are produced by deflating current prices estimates using a combination of data from Producer Price Indexes, Australia; Consumer Price Index, Australia and the historic publication, Price Indexes of Articles Produced by Manufacturing Industry, Australia (this publication has been ceased but data from it still underpins estimates).

State estimates for both own account R&D expenditure and R&D undertaken on contract by other institutions are derived from the Survey of Research and Experimental Development published in Research and Experimental Development, Businesses, Australia; Research and Experimental Development, Government and Private Non-Profit Organisations, Australia; and Research and Experimental Development, Higher Education Organisations, Australia.

The volume of capital expenditure on R&D is calculated by deflating the cost based expenditure values. These current price estimates are deflated using price indexes for labour inputs and other current expenditure used as inputs into the R&D products. This is undertaken at state level. Quarterly estimates for state, like national, are calculated using trend.

The sum of quarterly estimates are obtained from Mineral and Petroleum Exploration, Australia.

Current price estimates are deflated using a composite index of the Wage Price Index for ANZSIC Division B Mining and a producer price index for equipment and material categories associated with exploration—steel pipes and tubes, non-ferrous pipe fittings, iron and steel casting and forging, and other industrial machinery.

State estimates are derived by allocating national estimates using fixed weight splits produced largely from historic surveys for in house software, as well as packaged software imports for the off-the-shelf component.

Volume estimates are produced by deflating current prices estimates with the Manufacturing Industry (APMI) price index.

State estimates of GFCF of entertainment, library and artistic originals are allocated from the national estimates using Estimated Resident Population.

Volume estimates are produced by deflating current prices estimates using a combination of data from the publications, Producer Price Indexes, Australia; Consumer Price Index, Australia; and the historic publication, Price Indexes of Articles Produced by Manufacturing Industry, Australia (this publication has been ceased but data from it still underpins estimates).

Stamp duty estimates are based on quarterly data from each State Titles Offices. These estimates are based on the number of Land Title Transfer transactions occurring in each state for the quarter, and local government charges are estimated from the number of transactions occurring in each quarter.

Real estate agents' commissions and lawyers' fees are derived from movements in a composite indicator based on state data for the number and value of real estate transactions.

Data on the number of transactions and average sale prices are obtained from State Titles Offices (land title transfers) and Valuers-General departments (average sale prices).

Volume estimates for ownership transfer costs are derived by quantity revaluation at the state level, by multiplying the number of transactions by the average price in the previous year.

Livestock uses sheep and cattle numbers adjusted slaughtering and exports from Livestock Products, Australia at state level.

Data on acquisition and disposal prices of other animals are calculated using the ABARES publication, Agriculture Commodities. Values for sheep and cattle are estimated by multiplying the number of animals by an average price per head.

Quantity revalued using ABARES data on herd size.

Orchard growth is estimated using number of trees and hectares of vines. These data are available annually from the ABS publication, Agricultural Commodities, Australia.

The current price value is derived by applying average costs incurred in the planting and growing of orchards to this data.

Quantity revalued using number of trees and hectares of vines data outlined above.

Government Finance Statistics is the main source for Commonwealth Public Corporations GFCF.

Intellectual property products estimates are constructed using external and internal data sources including Research and Experimental Development, Businesses, Australia.

Commonwealth Public Corporations GFCF is allocated to states using estimated resident population data. Allowances are made to allocate significant identifiable projects to the states where they occur.

Volume estimates are compiled from current price estimates using price deflation. Deflation is performed using composite deflators of various price indexes constructed using annual current price asset composition as weights.

Government Finance Statistics is the main source for State and local Public Corporations GFCF.

Intellectual property products estimates are constructed using external and internal data sources including Research and Experimental Development, Businesses, Australia.

The volume estimates are compiled from current price estimates using price deflation. Deflation is performed using composite deflators of various price indexes constructed using annual current price asset composition as weights

Government Finance Statistics is the main source for Commonwealth Defence GFCF.

Intellectual property products estimates are constructed using external and internal data sources including Research and Experimental Development, Government and Private Non-Profit Organisations.

Commonwealth Defence GFCF for fixed assets and computer software are allocated to states using Commonwealth employment from the ABS publication, Employment and Earnings, Public Sector, Australia. Allowances are made to allocate significant identifiable projects to the states where they occur.

Defence weapons systems, and Research and development are allocated using estimated resident population data.

The volume estimates are compiled from current price estimates using price deflation. Deflation is performed using composite deflators of various price indexes constructed using annual current price asset composition as weights.

Government Finance Statistics is the main source for National Non-defence GFCF.

Intellectual property products estimates are constructed using external and internal data sources including Research and Experimental Development, Government and Private Non-Profit Organisations.

National non-defence GFCF is allocated to states using Commonwealth employment from the ABS publication, Employment and Earnings, Public Sector, Australia. Allowances are made to allocate significant identifiable projects to the states where they occur.

The volume estimates are compiled from current price estimates using price deflation. Deflation is performed using composite deflators of various price indexes constructed using annual current price asset composition as the weights.

Government Finance Statistics is the main source for State and local GFCF.

Intellectual property products estimates are constructed using external and internal data sources including Research and Experimental Development, Government and Private Non-Profit Organisations.

The volume estimates are compiled from current price estimates using price deflation. Deflation is performed using composite deflators of various price indexes constructed using annual current price asset composition as weights.

Volume measures are obtained by deflation of the current price values, using relevant ABS price indexes underlying those published in:

• Consumer Price Index, Australia;
• Price Indexes of Articles Produced by Manufacturing Industries, Australia; and
• Wage Price Index, Australia.