Sectoral output for an industry or combination of industries ("sector") is the value of its output sold outside that sector. It is usually calculated as the value of the sector's
gross output
In economics, gross output (GO) is a measure of the value of production of new goods and services during an accounting period. Gross output represents the total value of ''sales'' by producing enterprises (their gross revenue or turnover) in an ac ...
minus the value of shipments within the sector from one establishment to another.
Value here is measured for a specified time period and usually in units of nominal money. It may be converted to constant units by multiplying by a
price index
A price index (''plural'': "price indices" or "price indexes") is a normalized average (typically a weighted average) of price relatives for a given class of goods or services in a specific region over a defined time period. It is a statistic ...
to adjust for changes in prices over time and changes in quality of the goods and services produced.
A sectoral output measure is conceptually different from measures of
gross output
In economics, gross output (GO) is a measure of the value of production of new goods and services during an accounting period. Gross output represents the total value of ''sales'' by producing enterprises (their gross revenue or turnover) in an ac ...
or
value-added output. Gross output for the sector consists of sales, or receipts, and other operating income, plus excise taxes paid and net increases in inventories. Value-added measures exclude the value of intermediate inputs such as material, energy, and services, whether from the same industry or others. Thus gross output is larger than sectoral output which is larger than value-added output.
Sectoral output is the measure of output used in "KLEMS"
multifactor measures of productivity, which attempt to account for all direct inputs to production: capital services (K), labor services (L), energy (E), materials purchased (M), and services purchased (S)
When calculating
labor productivity
Workforce productivity is the amount of goods and services that a group of workers produce in a given amount of time. It is one of several types of productivity that economists measure. Workforce productivity, often referred to as labor produc ...
, a value-added measure of output should be used to avoid counting other inputs (like purchased materials) as if they were created by the labor and capital applied within the sector.
The definition of sectoral output has been attributed to Frank M. Gollop.
[William Gullickson. 1995]
Measurement of productivity growth in U.S. manufacturing
''Monthly Labor Review
The ''Monthly Labor Review'' (''MLR'') is published by the U.S. Bureau of Labor Statistics
The Bureau of Labor Statistics (BLS) is a unit of the United States Department of Labor. It is the principal fact-finding agency for the government o ...
'', p.14, citing the source "Accounting for Intermediate Input: The Link Between Sectoral and Aggregate Measures of Productivity Growth," in ''Measurement and Interpretation of Productivity'' (Washington, National Academy of Sciences, 1979), pp. 318–33.]
See also
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GDP
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GNP
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Input–output model
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Intermediate consumption
Intermediate consumption (also called "intermediate expenditure") is an economic concept used in national accounts, such as the United Nations System of National Accounts (UNSNA), the US National Income and Product Accounts (NIPA) and the Europe ...
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National accounts
National accounts or national account systems (NAS) are the implementation of complete and consistent accounting Scientific technique, techniques for measuring the economic activity of a nation. These include detailed underlying measures that ...
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Net output
Net output is an accounting concept used in national accounts such as the United Nations System of National Accounts (UNSNA) and the NIPAs, and sometimes in corporate or government accounts. The concept was originally invented to measure the to ...
References
{{DEFAULTSORT:Sectoral output
Economic data
Production economics
National accounts