3.6 Output and intermediate consumption

Output consists of the products and services produced during the accounting period. It comprises both individual and collective goods and services supplied by the producer to other units. The producer is always a local kind-of-activity unit. Goods and services produced by one such unit for another unit are counted in the output of the producing unit.

Output consists of market output, output for own final use and other non-market output. Market output is sold or intended to be sold in the market at a price that covers production costs. Other non-market output consists of production that is supplied to other units free of charge or at economically insignificant prices.

Output for own final use consists of products retained by the same economic unit for its own consumption or investment (i.e. gross fixed capital formation). Typically, goods retained for own consumption include agricultural and forestry products reserved for one's own use. Own capital formation can include independent software production or housing construction, for example. As for services produced for own final consumption, only (imputed) housing services and the domestic and personal services produced by paid domestic staff are included in output; other services produced by households for their own use, are not included.

Intermediate consumption refers to the goods and services used by the local kind-of-activity unit to generate its output. These goods and services can either be transformed or used up in the production process. Both SNA93 and the more detailed EU guidelines ESA95 specify this definition by listing borderline cases that are included in intermediate consumption (such as the regular maintenance and repair of equipment and buildings, the operational leasing of machines and cars, small tools and various ancillary activities such as bookkeeping and marketing); and also borderline cases that are excluded from intermediate consumption (such as major renovations or enlargements, software purchased or produced on own account and the acquisition of valuables, all of which are interpreted as gross formation of capital).

Examples