2.8 Producer types

The definition of the production boundary requires a producer. In the current system producers are divided into three groups according to their main type of output:

1. Market producers
2. Producers for own final use
3. Other non-market producers

Market output is sold on the market and at least 50 per cent of production costs is covered by sales. Most market output is sold at prices that cover or exceed production costs. Market producers include all business enterprises; sometimes the public sector may also be a market producer.

Non-market producers produce output that is provided free of charge, the price for which does not cover 50 per cent of production costs or for which there is no market. Non-market producers are divided into two groups, viz. producers for own final use and other non-market producers. Most public sector products represent non-market output, as do the goods and services produced by non-profit institutions serving households.

Producers for own final use are households that produce goods or services for their own consumption. There is no market for these services, but for purposes of national accounting they are valued according to the prices of market output and therefore they are not placed under the category of other non-market output. Household production for own final use and included within the national accounts production boundary includes the value of agricultural products produced and retained by households, the value of own account construction and the (computed) housing services of owner-occupied housing.