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For more information on this release:
E-mail: nat_acc@cso.ie Michael Connolly (+353) 1 498 4006 Mary Brew (+353) 1 498 4365
For general information on CSO statistics:
information@cso.ie (+353) 21 453 5000 On-line ISSN 2009-5600
CSO statistical release, , 11am

Quarterly Institutional Sector Accounts Non-Financial

Quarter 1 2016

 Gross Operating Surplus/Gross Mixed Income by Institutional Sector
 Non-Financial CorporationsFinancial CorporationsGeneral GovernmentHouseholds and NPISH
 (S.11)(S.12)(S.13)(S.14 + S.15)
201467,0368,8003,93522,852
2015120,5248,2534,21424,946
    €million

2015 - Non-Financial Corporate Sector Explains Step Change in GDP

Gross Household Savings Ratio Seasonally adjusted Q1 2014 – Q1 2016
go to full release

The National Income and Expenditure Accounts for 2015 released on 12 July 2016 reported a substantial increase in GDP. This release gives further insights into economic developments over the quarters and years of 2014 and 2015, along with the first quarter of 2016. In fact, the substantial revisions in GDP are largely explained by developments in the non-financial corporate sector (S.11) where gross operating surplus increased by €53,488m, from €67,036m in 2014 to €120,524m in 2015, an annual increase of 80 per cent.

 Disposable Income by Institutional Sector
 Non-Financial CorporationsFinancial CorporationsGeneral GovernmentHouseholds and NPISH
 (S.11)(S.12)(S.13)(S.14 + S.15)
201432,49811,37229,18890,615
201560,06410,43434,68295,425
    €million
Figure 2

Households were experiencing a 5.3 per cent increase in disposable income (B.6g) while these corporate events were taking place. This increase of €4,810m, from €90,615 in 2014 to €95,425m in 2015, is largely explained by increased estimates for compensation of employees (D.1), which increased from €73,993m in 2014 to €78,203m in 2015. New data sources have been introduced into the compilation process for compensation of employees (see Background Notes). Most of this increase in disposable income was absorbed through increases in final consumption expenditure of households (P.3) that increased by €4,694m from €82,566 in 2014 to €87,260 in 2015. As a result gross saving of households (B.8g) in 2015 increased by only €353m from €10,314m in 2014 to €10,667 in 2015.

The saving ratio of households, which expresses saving as a percentage of total gross disposable income (B.6g), decreased from 11.1 per cent in 2014 to 10.9 per cent in 2015 (see Background Notes - Definition of Household Saving Ratio).

The seasonally adjusted series of Gross Disposable Income, Personal Consumption of Goods and Services and Gross Saving of the Household and NPISH sector is currently unavailable for Q1 2016 and all prior periods. Once the revised annual series is available the quarterly series will be estimated both seasonally and non-seasonally adjusted.

Household Saving Increased in the First Quarter of 2016

In the first quarter of 2016 gross disposable income of households (B.6g) increased by €1,476m to €25,416m compared to €23,940m in the first quarter of 2015. Household expenditure (P.3) increased by €1,269m to €22,549m over this same period. Consequently, gross household saving (B.8g) increased by €210m in the year. 

Decrease in Net Borrowing of Government (S.13)

Gross dissaving of Government was €366m in the first quarter of 2016, an improvement of €397m on the Q1 2015 deficit of €763m. An increase of €303m in taxes paid on production and imports (D.2) and an increase in taxes on income and wealth (D.5) of €275m were the main contributors to the change in gross saving.

On the capital side of the accounts a decrease in gross capital formation (P.5) of €338m taken together with the improvement in saving of €397m resulted in a borrowing requirement (B.9) for Government of €1,469m in Q1 2016 compared to €2,331m in Q1 2015.

Non-Financial (S.11) and Financial (S.12) Corporations

The gross saving of non-financial corporations was €14,332m in Q1 2016 – an increase of €1,827m compared with the Q1 2015 figure of €12,505m.

An increase of net property income (D.4) totaling €3,386m was offset by a decrease of €1,487m in the gross operating surplus (B.2g) of the non-financial corporations. A decrease in the distributed income of corporations (D.42) paid by the sector and an increase in reinvested earnings (D.43) received by the sector are the main factors in explaining the change in D.4. However, net lending (B.9) by this sector in Q1 2016 has increased by €343m to €3,687m.

Financial corporations had gross saving of €2,978m in Q1 2016, an increase of €1,099m on the Q1 2015 result. An increase of €710m in the gross operating surplus (B.2g) of financial corporations together with an increase in net property income (D.4) amounting to €416m were the main reasons for the increase in saving. Net lending (B.9) increased by €1,112m to €2,639m in Q1 2016.

Rest of the World Sector (S.2)

The net borrowing (B.9) by the rest of the world from Ireland amounted to €6,588m in Q1 2016 compared with a net borrowing of €4,222m in Q1 2015. The net borrowing position reflects the level of gross saving in the Irish economy.

Table 1: Quarterly Accounts by Institutional Sector, Q1 2014 - Q1 2016 Summary€million
  Key VariablesQuarterS.2 Rest of WorldS.1 Total EconomyS.1N Not SectorizedS.11 Non-Financial CorporationsS.12 Financial CorporationsS.13 General GovernmentS.14+S.15 Households including NPISH
(a)B.1*gGross Domestic ProductQ1 2014 44,9504,09725,2903,7705,7536,040
   Q2 2014 46,6843,24927,3383,8395,6536,605
   Q3 2014 51,1584,40129,8084,1155,4677,368
   Q4 2014 50,3673,87330,7194,1185,4066,250
   2014 193,16015,621113,15515,84322,27926,262
   Q1 2015 61,5084,95539,2754,0195,9607,299
   Q2 2015 61,3764,06840,6563,7315,8587,062
   Q3 2015 64,0895,46542,6723,5975,6666,690
   Q4 2015 68,8394,51447,6813,9925,6047,049
   2015 255,81319,002170,28415,33923,08828,100
   Q1 2016 62,8275,51538,3724,4806,0908,370
           
(b)B.2g/B.3gGross Operating Surplus Q1 2014 21,405-44514,1271,8839844,856
  / Mixed IncomeQ2 2014 24,142-46215,8882,1839845,550
   Q3 2014 27,471-50718,2812,4349846,279
   Q4 2014 27,691-49918,7402,3009846,167
   2014 100,710-1,91367,0368,8003,93522,852
   Q1 2015 36,6823727,4052,0751,0536,112
   Q2 2015 37,5463728,4262,0081,0536,021
   Q3 2015 38,9503930,0271,9201,0535,911
   Q4 2015 44,9144234,6672,2511,0536,902
   2015 158,092155120,5248,2534,21424,946
   Q1 2016 36,7893825,9172,7851,0546,994
           
(c)D.1_D.4Net Primary IncomeQ1 2014 16,1410-7,4255193,80319,244
   Q2 2014 14,6000-9,0213434,00919,269
   Q3 2014 15,8710-7,5994413,89419,135
   Q4 2014 17,1680-6,0831423,15919,950
   2014 63,7810-30,1271,44514,86577,598
   Q1 2015 10,1310-14,279-444,32120,133
   Q2 2015 13,8780-11,7348404,47620,297
   Q3 2015 11,3050-13,8111334,47820,504
   Q4 2015 10,4800-14,3984213,36921,088
   2015 45,7940-54,2221,35016,64482,021
   Q1 2016 14,9040-10,8923714,34921,076
           
(d)B.5gGross National Income = (b + c)Q1 2014 37,546-4456,7032,4034,78624,100
   Q2 2014 38,742-4626,8672,5254,99324,820
   Q3 2014 43,343-50710,6822,8754,87825,414
   Q4 2014 44,859-49912,6572,4414,14326,116
   2014 164,490-1,91336,90910,24518,800100,449
   Q1 2015 46,8143713,1262,0305,37426,245
   Q2 2015 51,4243716,6912,8485,52926,318
   Q3 2015 50,2543916,2162,0535,53126,415
   Q4 2015 55,3944220,2692,6724,42227,989
   2015 203,88615566,3029,60320,857106,968
   Q1 2016 51,6933815,0253,1565,40428,070
           
(e)D.5_D.7Net Current TransfersQ1 2014 -8990-3724721,077-2,076
   Q2 2014 -6040-1,3311972,694-2,163
   Q3 2014 -5260-9163292,246-2,185
   Q4 2014 -7020-1,7911284,371-3,410
   2014 -2,7300-4,4101,12710,388-9,835
   Q1 2015 -8930-6214781,555-2,305
   Q2 2015 -7230-1,884933,190-2,122
   Q3 2015 -5020-1,1123242,758-2,471
   Q4 2015 -1,0090-2,621-646,321-4,645
   2015 -3,1270-6,23983113,824-11,543
   Q1 2016 -6590-6934542,235-2,654
           
(f)B.6gGross Disposable Income = (d + e)Q1 2014 36,647-4456,3312,8755,86322,023
   Q2 2014 38,139-4625,5352,7227,68722,656
   Q3 2014 42,817-5079,7673,2057,12423,228
   Q4 2014 44,158-49910,8662,5708,51422,707
   2014 161,760-1,91332,49811,37229,18890,615
   Q1 2015 45,9213712,5052,5086,93023,940
   Q2 2015 50,7013714,8072,9418,71924,196
   Q3 2015 49,7533915,1042,3778,28923,945
   Q4 2015 54,3854217,6472,60810,74423,344
   2015 200,75915560,06410,43434,68295,425
   Q1 2016 51,0343814,3323,6107,63825,416
           
(g)P.3+D8Use of Disposable IncomeQ1 2014 -27,59100-552-7,418-19,621
   Q2 2014 -27,88600-559-7,887-19,439
   Q3 2014 -28,36700-569-8,333-19,465
   Q4 2014 -30,39500-584-8,036-21,774
   2014 -114,24000-2,265-31,674-80,301
   Q1 2015 -28,97300-629-7,692-20,652
   Q2 2015 -28,85200-623-7,875-20,354
   Q3 2015 -29,72700-621-8,345-20,760
   Q4 2015 -31,80900-629-8,188-22,992
   2015 -119,36200-2,503-32,101-84,757
   Q1 2016 -30,55400-632-8,004-21,918
           
(h)B.8gGross Saving = (f+g)Q1 2014 9,056-4456,3312,323-1,5542,402
   Q2 2014 10,253-4625,5352,163-2003,217
   Q3 2014 14,449-5079,7672,636-1,2093,763
   Q4 2014 13,763-49910,8661,985478932
   2014 47,521-1,91332,4989,107-2,48610,314
   Q1 2015 16,9473712,5051,879-7633,289
   Q2 2015 21,8483714,8072,3188443,842
   Q3 2015 20,0263915,1041,755-563,184
   Q4 2015 22,5764217,6471,9792,555352
   2015 81,39815560,0647,9312,58010,667
   Q1 2016 20,4803814,3322,978-3663,498
           
(i) Changes in Capital AccountsQ1 2014 -5,871-445-4,410-109-449-457
   Q2 2014 -4,352-462-2,666-103-422-699
   Q3 2014 -5,499-507-4,634-73-43-243
   Q4 2014 -4,467-499-3,380-36-354-198
   2014 -20,190-1,913-15,091-321-1,269-1,597
   Q1 2015 -1,21437330-167-662-752
   Q2 2015 -84937-192-187193-700
   Q3 2015 3,685394,064-14676-348
   Q4 2015 3,439424,8931,997-3,176-317
   2015 5,0621559,0941,496-3,568-2,116
   Q1 2016 -50938523-121-196-752
           
(j)P.51CConsumption of Fixed CapitalQ1 2014 6,368 4,372185858953
   Q2 2014 6,437 4,427187858965
   Q3 2014 8,018 5,6812408581,238
   Q4 2014 10,067 7,3073098581,593
   2014 30,891021,7869223,4334,749
   Q1 2015 11,511 9,490184907929
   Q2 2015 13,768 11,5102249071,127
   Q3 2015 17,113 14,5042829071,420
   Q4 2015 19,167 16,3423179071,600
   2015 61,558051,8471,0073,6275,077
   Q1 2016 13,385 11,1682179071,094
           
(k)B.9Net Lending(+)/Net Borrowing(-)Q1 20143,184-3,183-890-2,4522,029-2,862992
  = (h + i) - jQ2 2014537-537-925-1,5581,873-1,4811,553
   Q3 2014-930932-1,013-5482,322-2,1102,281
   Q4 2014773-772-9971791,640-735-858
   20143,564-3,560-3,825-4,3797,864-7,1873,968
   Q1 2015-4,2224,223753,3451,527-2,3311,608
   Q2 2015-7,2317,232743,1051,9071302,015
   Q3 2015-6,5996,598784,6641,327-8871,416
   Q4 2015-6,8496,848836,1983,659-1,527-1,565
   2015-24,90124,90131017,3118,421-4,6153,474
   Q1 2016-6,5886,587763,6872,640-1,4691,652
Quarterly Accounts by Institutional Sector, Q1 2016€million
USESCURRENT ACCOUNTSRESOURCES
S.14+S.15 Households including NPISHS.13 General governmentS.12 Financial CorporationsS.11 Non-Financial CorporationsS.1N Not SectorizedS.1 Total EconomyS.2 Rest of WorldS.1+S.2 Sum Over SectorsS.1+S.2 Sum Over SectorsS.2 Rest of WorldS.1 Total EconomyS.1N Not SectorizedS.11 Non-Financial CorporationsS.12 Financial CorporationsS.13 General governmentS.14+S.15 Households including NPISH
1.2 GENERATION OF INCOME ACCOUNT
        B.1*gGross Domestic Product  62,8275,51538,3724,4806,0908,370
1,2065,0351,81612,066 20,12313620,259D.1Compensation of Employees        
2450-1205175,6776,319 6,319D.2Taxes on Production and Imports, paid        
        D.3Subsidies, received403 4032001280075
6,9941,0542,78525,9173836,789  B.2g/ B.3gGross Operating Surplus/ Mixed Income        
1.3 ALLOCATION OF PRIMARY INCOME ACCOUNT
        B.2g/ B.3gGross Operating Surplus/ Mixed Income  36,7893825,9172,7851,0546,994
        D.1Compensation of Employees20,25915420,105    20,105
        D.2Taxes on Production and Imports, received6,319726,246   6,246 
 381   38122403D.3Subsidies, paid        
3521,61013,48914,243 29,69315,71845,411D.4Property Income45,41026,78218,628 3,35113,860941,323
3011,6103,6031,510 7,0249,14416,168D.41 Interest16,1675,18610,981 -2010,65286264
005864,772 5,3572,3547,711D.42 Distributed Income of Corporations7,7104,6863,024 1712,1887659
001,6757,960 9,6363,85113,487D.43 Reinvested earnings on direct foreign investment13,4879,6363,851 3,20065100
007,6240 7,6243697,993D.44 Other investment income7,9947,274720 03690350
51001 52 52D.45 Rent52 52 00151
28,0705,4043,15615,0253851,693  B.5gGross National Income        
Quarterly Accounts by Institutional Sector, Q1 2016€million
USESCURRENT ACCOUNTSRESOURCES
S.14+S.15 Households including NPISHS.13 General governmentS.12 Financial CorporationsS.11 Non-Financial CorporationsS.1N Not SectorizedS.1 Total EconomyS.2 Rest of WorldS.1+S.2 Sum Over SectorsS.1+S.2 Sum Over SectorsS.2 Rest of WorldS.1 Total EconomyS.1N Not SectorizedS.11 Non-Financial CorporationsS.12 Financial CorporationsS.13 General governmentS.14+S.15 Households including NPISH
1.5 SECONDARY DISTRIBUTION OF INCOME ACCOUNT
        B.5gGross National Income  51,6933815,0253,1565,40428,070
4,9360153556 5,646195,665D.5Current Taxes on Income, Wealth, etc.5,665205,645   5,645 
4,339    4,33904,339D.61 Social contributions4,33904,339 01,3772,9620
05,7457450 6,490786,568D.62 Social benefits other than social transfers in kind6,568826,486    6,486
1,1176942,044237 4,0931,0495,142D.7Other Current Transfers5,1421,7043,438 1012,019661,253
25,4167,6383,61014,3323851,034  B.6gGross Disposable Income        
1.6 USE OF DISPOSABLE INCOME ACCOUNT
        B.6gGross Disposable Income  51,0343814,3323,6107,63825,416
22,5508,004   30,554  P.3Final Consumption Expenditure        
  632  6320632D.8Adjustment for the Change in Pension Entitlements6320632    632
3,498-3662,97814,3323820,480  B.8gGross Saving        
1.7 EXTERNAL ACCOUNT
 75,007 P.6Exports of Goods and Services        
        P.7Imports of Goods and Services 54,259      
      -20,748 B.11External Balance of Goods and Services        
     77,71517,02294,737D.1 to D.8Primary Incomes and Current Transfers94,73628,81465,922     
      -8,956 B.12Current External Balance        
Quarterly Accounts by Institutional Sector, Q1 2016€million
CHANGES IN ASSETSCAPITAL ACCOUNTSCHANGES IN LIABILITIES
S.14+S.15 Households including NPISHS.13 General governmentS.12 Financial CorporationsS.11 Non-Financial CorporationsS.1N Not SectorizedS.1 Total EconomyS.2 Rest of WorldS.1+S.2 Sum Over SectorsS.1+S.2 Sum Over SectorsS.2 Rest of WorldS.1 Total EconomyS.1N Not SectorizedS.11 Non-Financial CorporationsS.12 Financial CorporationsS.13 General governmentS.14+S.15 Households including NPISH
1.8 CHANGES IN NET WORTH DUE TO SAVING AND CAPITAL TRANSFERS ACCOUNT
B.8gGross Saving  20,4803814,3322,978-3663,498
        B.12Current External Balance -8,956      
47295046 38827415D.9Capital Transfers4150415 1500120145
1,09490721711,168 13,385  P.51CConsumption of Fixed Capital        
2,503-1,4482,7613,268387,122-8,983-1,861B.10.1Changes in Net Worth due to Saving and Capital Transfers        
1.9 ACQUISITION OF NON-FINANCIAL ASSETS ACCOUNT
        B.10.1Changes in Net Worth due to Saving and Capital Transfers-1,861-8,9837,122383,2682,761-1,4482,503
1,9449283388,353-3811,526 11,526P.5Gross Capital Formation        
        P.51CConsumption of Fixed Capital13,385 13,385 11,1682179071,094
0002,395 2395-23950NPAcquisitions less Disposals of Non-Produced Assets        
1,652-1,4692,6403,687766,587-6,588-1B.9Net Lending (+) / Net Borrowing (-)        

Background Notes

Description of Institutional Sectors

In the sector accounts, Institutional Sectors are distinguished not in terms of the nature of their production activity (such as agriculture, industry, services, etc.) but rather in terms primarily of the institutional form of the units that make them up. Thus companies, whether engaged in commercial non-financial or financial business, are grouped in a different sector from households, even though the latter are in many cases also engaged in commercial production, and from government or other non-market producers such as voluntary agencies.

Institutional Sectors

The classification system is that of the European System of Accounts 2010 (ESA2010). The sectors and sub-sectors distinguished in the present publication are as follows:

S.1 Resident Economy is the sum of all the sectors of the domestic economy.

S.11 Non-Financial Corporations are corporate bodies producing goods and non-financial services on a commercial basis. They include public limited companies, private companies and other corporate forms of business, whether owned by residents (including the government) or non-residents or both. In particular, therefore, Irish subsidiaries of foreign companies and the Irish branches of foreign companies operating in Ireland on a branch basis are included; while the foreign subsidiaries of Irish companies and the foreign branches of Irish companies operating abroad are excluded (they form part of the Rest of the World sector S.2). The business activities of self-employed persons (quasi-corporations) are in principle to be included here if separate accounts are available for statistical purposes. Under the implementation of ESA2010, entities which operate as holding companies for non-financial corporations are now classified in the financial sector.

S.12 Financial Corporations are corporate bodies producing financial services on a commercial basis. As with S.11, they can take various legal forms, with a range of ownership arrangements. They include monetary financial institutions, other financial intermediaries, financial auxiliaries and insurance corporations and pension funds.

S.13 General Government consists of central and local government. Central government includes the Ireland Strategic Investment Fund (formerly the NPRF), and non-commercial agencies owned and funded by government, but does not include commercial state-owned companies (which are proper to S.11 or S.12 as appropriate).

S.14 + S.15 Households and Non-Profit Institutions Serving Households. S.14 consists of persons in their capacity as holders of financial assets or as borrowers. The business assets and liabilities of unincorporated self-employed persons are also mainly reflected in this sector. S.15 consists of non-profit institutions such as charities, and non-commercial agencies not owned by the government, such as some schools and hospitals.

S.2 Rest of the World. The figures represent the economy’s transactions with non-residents. The conceptual definition is the same as in the Balance of Payments (BOP) statistics. In particular, non-residents include foreign subsidiaries of Irish companies, the foreign branches of Irish companies that operate abroad on a branch basis, and the head offices of foreign companies that operate in Ireland on a branch basis.

S.1N Not Sectorised. In the non-financial accounts an additional residual sector is used to report taxes and subsidies in the Generation of Income Account (Account 1.2) as it is not possible to allocate these amounts to Institutional Sectors. In addition, throughout these accounts S.1N is used to report the amounts that appear as the statistical discrepancy in the National Income and Expenditure GDP accounts, arising from the use of two independent estimates of GDP (from the Income and Expenditure approaches). In the Annual National Accounts NIE tables 3 and 5, the official estimate of GDP is reported as the average of the two measures, and the discrepancy is therefore displayed as half the difference between the two independent estimates (and thus with different signs in the two tables). The discrepancy is projected forward on a quarterly basis in line with the trends in the Expenditure components and is presented in Table 2 of the Quarterly National Accounts. In the quarterly sector accounts it appears in Gross Domestic Product, the opening item in the Generation of Income Account and is then carried through successive accounts via the balancing item. In the final non-financial account, the full amount of the discrepancy then emerges as the unallocated net lending or borrowing in the economy.

Description of Detailed Non-Financial Accounts

Sector accounts present a coherent overview of all economic processes and the roles played by the various sectors. Each economic process is described in a separate account. The accounts describe successively generation of income, primary and secondary income distribution, final consumption, redistribution by means of capital transfers and capital formation. Note that the Production Account (1.1) from the Annual Accounts is not included in these quarterly accounts as the data is not available on a quarterly basis.  The accounts record economic transactions, distinguishing between uses and resources, (e.g. the resources side of the transaction category Interest (D.41) records the amounts of interest receivable by the different sectors of the economy and the uses side shows interest payable) with a special item to balance the two sides of each account. By passing on the balancing item from one account to the next a connection is created between successive accounts.

The accounts are compiled for the total economy and include accounts for separate domestic sectors and the Rest of the World sector. In this way the sector accounts describe:

  • for each economic process the role of each sector, for instance General Government in income redistribution and Financial Corporations in financing.
  • for each sector all economic transactions and their relation with other domestic sectors and the Rest of the World.

The successive accounts are explained in more detail below. 

Current Accounts:

1.1 Production Account

This account is not presented in the Quarterly Non-Financial Accounts as quarterly data is not available.

1.2 Generation of Income Account

This account displays the transactions through which Gross Domestic Product at market prices is distributed to labour (compensation of employees), capital (operating surplus) and government (the balance of taxes and subsidies on production). The balancing item for the Household and NPISH sector in this account is called mixed income, because apart from operating surplus it also contains compensation for work by self-employed persons and their family members. Gross Operating Surplus/Gross Mixed Income (B.2g/B.3g) is the balancing item for the entire account.

1.3 Allocation of Primary Income Account

This account records, as resources, the income from direct participation in the production process, as well as property income received in exchange for the use of land, financial resources and other intangible assets. In addition, this account records the taxes on production and imports received by the government. On the uses side, property income is recorded as well as the subsidies paid by the government.

On this account the interest paid and received are recorded excluding imputed bank services (financial intermediation services indirectly measured - FISIM). In the national accounts insurance technical reserves are seen as a liability of insurance enterprises and pension funds to policyholders. Therefore, the receipts from investing these reserves are recorded as payments from insurance enterprises and pension funds to households, under Other Investment Income (D.44). The balancing item of this account for each sector is Gross National Income (B.5g). The Primary Income for the total economy is the National Income.

1.4 Memorandum-Entrepreneurial Income Account

This account is not presented in the Quarterly series.

1.5 Secondary Distribution of Income Account

The Secondary Distribution of Income account shows how primary income is redistributed by means of current taxes on income and wealth, social contributions (including contributions to pension schemes), social benefits (including pension benefits) and other current transfers. The balancing item of this account is Gross Disposable Income (B.6g). For the consuming sectors (Households, NPISH and General Government) this item is passed on to Use of Disposable Income Account (1.6). For the other sectors the disposable income is generally equal to saving. This is then passed on to the Change in Net Worth due to Saving and Capital Transfers Account (1.8).

1.6 Use of Disposable Income Account

This account shows the element of disposable income that is spent on final consumption and also the element that is saved. As mentioned above final consumption only exists for Households, NPISH and General Government. The net equity of Households in pension funds is seen as a financial asset that belongs to Households. Changes in these reserves need to be included in the saving of Households. However, contributions to pension schemes and pension benefits have already been recorded on Secondary Distribution of Income Account (1.5) as social contributions and social benefits. Therefore, an adjustment is needed in the saving of Households to include the change in pension funds reserves on which they have a definite claim. This adjustment is called Adjustment for the Change in Pension Entitlements (D.8). There is no need for a similar adjustment concerning life insurance because life insurance premiums and benefits are not recorded as current transactions. The balancing item for this account is Gross Saving (B.8g).

1.7 External Account

This account records the summarised transactions of the Rest of the World Sector (S.2), including on the uses side exports of goods and services, primary incomes and current transfers receivable. The resources side of this account includes imports of goods and services together with primary incomes and transfers payable. The balancing item is Current External Balance (B.12), which records the balance on current accounts with the Rest of the World.

Capital Accounts:

1.8 Change in Net Worth due to Saving and Capital Transfers

On this account the capital transfers are recorded and combined with gross saving and the current external balance. The resulting balancing item is Changes in Net Worth due to Saving and Capital Transfers (B.10.1).

1.9 Acquisition of Non-Financial Assets Account

On this account, Gross Fixed Capital Formation (P.5), Changes in Inventories and Acquisitions less Disposals of Valuables and Non-Produced Non-Financial Assets (NP) are recorded among the uses. The decline in the value of fixed capital goods caused by consumption of fixed capital goods is recorded among the resources (P.51C). The balancing item is Net Lending(+) or Borrowing(-) (B.9). It shows the amount a sector can lend/invest or has to borrow as a result of its current and capital transactions.

Seasonal Adjustment

Seasonally adjusted estimates of Household Saving are done using the indirect seasonal adjustment approach. Under this approach the two main aggregates, Household Disposable Income (B.6g + D.8) and Final Consumption Expenditure of Households (P.3), are independently adjusted. In the case of Household Saving (B.8g), however, this estimate is derived by taking the difference between the two adjusted series of Household Disposable Income and Final Expenditure of Households. This method for estimating the seasonally adjusted value for a small net residual of two large aggregates, such as Household Saving is considered a more appropriate estimation procedure.

As part of the seasonal adjustment process, ARIMA models are identified for each series based on unadjusted data spanning Q1 1999 to Q4 2015. These models are then applied to the entire series (Q1 1999 to Q4 2015). Seasonal factors and the parameters of the ARIMA models are updated each quarter.

The adjustments are completed by applying the X-12-ARIMA model, developed by the U.S. Census Bureau to the unadjusted data. This methodology estimates seasonal factors while also taking into consideration factors that impact on the quality of the seasonal adjustment such as, for example:

  • calendar effects, e.g. the timing of Easter
  • outliers, temporary changes and level shifts in the series

For additional information on the use of X-12-ARIMA, see Findley, D.F., B.C. Monsell, W.R. Bell, M.C. Otto, and B. Chen (1998), “New Capabilities and Methods of the X-12-Arima Seasonal Adjustment Program”, Journal of Business & Economic Statistics, 16, pp.127-177.

Definition of Household Saving Ratio

The Household Saving Ratio is Gross Household Saving (B.8g) expressed as a percentage of total resources, i.e. the sum of Gross Household Disposable Income (B.6g) and the Adjustment for the Change in Pension Entitlements (D.8). Household Saving in the relevant quarter represents that part of Disposable Income that is not spent on Final Consumption of Goods and Services (P.3).  The use of these savings either for financial investment or debt reduction is not recorded in these accounts but is recorded in the financial account (see Quarterly Financial Accounts http://www.centralbank.ie/polstats/stats/qfaccounts/Pages/releases.aspx published by the Central Bank of Ireland and http://www.cso.ie/en/releasesandpublications/ep/p-isanff/isanff2014/ for annual integrated financial and non financial accounts).

Compensation of Employees

The Central Statistics Office (CSO) has re-examined the methodology used to calculate the compensation of employees (COE) results in the annual national accounts. Previously the main sources were the structural business censuses of industrial production and services. Now the administrative P35 data collected by the Revenue Commissioners (the State Tax collection authority) is used as the primary source of data. The years where the method has changed are 2011 – 2015. The P35 datasets give a more census-level coverage of the labour market in Ireland and contain information (at a person-job level) on pay for tax and for Social Insurance purposes and the amount of mandatory Employer’s Contribution to Social Insurance. They contain details of commencements/cessations of employment, employee personal public service (PPS) numbers, employer registration numbers (with links to employer information – e.g. NACE coding, institutional sector) and details of tax paid.  Other labour costs such as non-pension contributions of employers and benefits-in-kind are based on the results in the CSO’s Earnings, Hours and Employment Costs Survey (EHECS) at the detail level (A88).  In the case of pensions, data from the Irish Pensions Authority (IPA) is used directly in the estimate as it is deemed more accurate.

 

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