A Manual for the Construction of a Sport Satellite Account ...ec.europa.eu/assets/eac/sport/library/documents/xg-stat-ssa-manual... · Manual for the construction of an SSA XG SHP,

A Manual for the Construction of a Sport Satellite Account (SSA)

Thanos Panagouleas

Themis Kokolakakis

Sport Industry Research Centre

Sheffield Hallam University

September 2012

Manual for the construction of an SSA XG SHP, April 2012

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TABLE OF CONTENTS

1. Introduction 3

2. Context 3

3. Definition of a sport satellite account (SSA) 4

4. Definition of sport in the economic sense 5

5. Data collection 6

6. Constructing a sport satellite account (SSA) 12

7. Conclusions 18

ABBREVIATIONS 20

Annex A: Country-specific examples 21


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1. Introduction

This paper illustrates the methodological framework for the construction of a Sport

Satellite Account (SSA). The objective is to be a general manual that could be

followed for any country. However, in terms of identifying data sources it has to be

specific to one country, which is the UK. If it were used for another country it would

be necessary to identify comparable data to that used in the UK case. For most

European countries identifying comparable data sources should be quite

straightforward.

2. Context

In its 2007 White Paper on Sport the European Commission announced that, in

close cooperation with the Member States, it would seek to develop a European

statistical method for measuring the economic impact of sport as a basis for the

construction of national SSAs, which could in time lead to a European Satellite

Account for sport. Accordingly, the EU Working Group and Sport and Economics,

set up by EU Sport Ministers in 2006, developed a common joint definition, the

“Vilnius Definition of Sport”, as the basis for the collection and production of data

for the compilation of an SSA. The 2011 Communication on sport gives further

impetus to this process by announcing that the Commission and the Member

States produce SSAs compatible with the agreed European definition. So far five

countries, Austria, Cyprus, the Netherlands, Poland and the UK, have produced an

SSA based on the Vilnius Definition. Until mid-2011, these initiatives were

coordinated by the EU Working Group on Sport and Economics that had met 8

times. The Expert Group on Sport Statistics (XG STAT) established by the Council

through the EU Work Plan for Sport of May 2011 has taken over this coordination


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role. The XG has received the mandate to make recommendations to further

promote data collection in line with the Vilnius Definition and to evaluate the results.

It met for the first time in October 2011 and will have to deliver its output by the

end of 2013.

3. Definition of a sport satellite account (SSA)

A satellite account system is specifically aimed at subjects, themes, or sectors of

the economy, which are not observable in the traditional system of national

accounts, because they do not correspond to a specific statistically delineated

economic activity. In other words, a satellite account system is a robust statistical

framework for measuring the economic importance of a specific industry, e.g. the

sport sector, within the national economy. An SSA identifies all sport-related

economic activities in the national accounts and puts these in a separate (satellite)

account while maintaining the structure of the overall National Accounts. Without a

satellite account, sport-related economic activities are for the most part concealed

in broader categories in the National Accounts. Thus sports clothing is concealed

within the overall clothing figures and sports shoes are included with all shoes in

the accounts.

The European project on satellite accounts allows international comparisons of the

economic importance of sport for the first time because each country has adopted

the same definition of sport (the 'Vilnius Definition') and the same methodology to

measure the economic importance of sport. Several countries have measured the

economic importance of sport before but each country had adopted different

definitions of sport and used different methodologies and consequently the results

were non-comparable.


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4. Definition of sport in the economic sense

After a scrutinised examination of the Classification of Economic Activities in the

European Community (NACE), it was jointly decided which categories or sub-

categories are fully or partly related to sport and the definition to which they belong.

To arrive at this definition the Classification of Products by Activity 2002 (CPA

2002) was used. The CPA relates directly to the classification structure under

NACE. Given the fact that the CPA is a highly segregated classification of products,

its use can provide further guidance in identifying and estimating the sport-related

element of every NACE category.

In parallel to the employment of the CPA, the consumption of sport goods and

services of every CPA category was distinguished between intermediate and final.

The former relates to raw materials in the production process, while the latter

refers mainly to household or public consumption, investment and exports. This

clarification is essential but difficult to construct.

The economic classification that has been used as a point of reference for any

economic activity related to sport is the NACE. The Vilnius Definition used in the

SSA is a three-way definition incorporating the statistical definition, the narrow

definition, and the broad definition. Sport in the statistical definition is what is

explicitly identified in the national accounts. It includes the operation of sport

facilities and other sport services and it is equivalent to the NACE category 92.6:

'Sporting Activities'. Sport in the narrow definition includes all the products and

services which are necessary as inputs for (doing) sport (i.e. to produce sport as

an output). For example, manufacture, retail and wholesale of sporting goods and

sport infrastructure. Lastly, sport in the broad definition incorporates all products


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and services which have a (direct or indirect) relation to any sport activity but

without being necessary to do sport (i.e. which draw upon sport as an input). This

includes, sport tourism, publications, media and medical care related to sport.

The above three definitions have the following inter-relationships: While everything

covered by the statistical and narrow definitions is always part of the broader

definition, not everything comprised by the statistical definition is part of the narrow

definition, and in turn not everything comprised by the narrow definition is part of

the statistical definition.

5. Data collection

The core of the SSA in every country is the Input-Output tables (IOTs). In simple

terms, the SSA focuses on the part of the Supply and Use tables (SUTs) that are

related to sport.

The sport economy has been defined in terms of NACE categories. This implies

that the first step for the creation of the SSA is to identify the correspondence

between the NACE and the 123 I-O industry/product groups of the Supply and Use

Tables (SUTs). Table 1 presents in bold the 53 industry/product groups which are

related to sport.


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Table 1: Classification of Input-Output industry/product groups by SIC(03) (Bold lines represent sport-related economic sectors)

123 Industry Product Groups SIC (03) 1 Agriculture, hunting and related service Activities 1 2 Forestry, logging and related service activities 2

Agriculture

3 Fishing, fish farming and related service activities 5

4 Mining of coal and lignite; extraction of peat 10

5 Extraction of crude petroleum and natural gas; service activities incidental to oil and gas ... 11+12

6 Mining of metal ores 13

Mining and quarrying

7 Other mining and quarrying 14

8 Production, processing and preserving of meat and meat products 15.1

9 Processing and preserving of fish and fish products; fruit and vegetables 15.2+15.3

10 Vegetable and animal oils and fats 15.4

11 Dairy products 15.5

12 Grain mill products, starches and starch products 15.6

13 Prepared animal feeds 15.7

14 Bread, rusks and biscuits; pastry goods and cakes 15.81+15.82

15 Sugar 15.83

16 Cocoa; Chocolate and sugar confectionary 15.84 17 Other food products 15.85 to 15.89 18 Alcoholic beverages - alcohol and malt 15.91 to 15.97 19 Production of mineral waters and soft drinks 15.98 20 Tobacco products 16

21 Preparation and spinning of textile fibres 17.1

22 Textile waving 17.2

23 Finishing of textiles 17.3 24 Made-up textile articles, except apparel 17.4 25 Carpets and rugs 17.51 26 Other textiles 17.52 to 17.54 27 Knitted and crocheted fabrics and articles 17.6+17.7 28 Wearing apparel; dressing and dyeing of fur 18 29 Tanning and dressing of leather; luggage, handbags, saddlery and harness 19.1+19.2 30 Footwear 19.3 31 Wood and wood products, except furniture 20

32 Pulp, paper and paperboard 21.1

33 Articles of papers and paperboard 21.2 34 Publishing, printing and reproduction of recorded media 22 35 Coke, refined petroleum products and nuclear fuel 23

36 Industrial gases, dyes and pigments 24.11+24.12

37 Other inorganic basic chemicals 24.13

38 Other organic basic chemicals 24.14

39 Fertilisers and nitrogen compounds 24.15

40 Plastics and synthetic rubber in primary forms 24.16+24.17

Manufacturing

41 Pesticides and other agro-chemical products 24.2


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42 Paints, varnishes and similar coatings, printing ink and mastics 24.3 43 Pharmaceuticals, medicinal chemicals and botanical products 24.4 44 Soap and detergents, cleaning and polishing preparations, perfumes and toilet preparations 24.5

45 Other chemical products 24.6

46 Man-made fibres 24.7 47 Rubber products 25.1 48 Plastic products 25.2

49 Glass and glass products 26.1

50 Ceramic goods 26.2+26.3

51 Bricks, tiles and construction products in baked clay 26.4

52 Cement, lime and plaster 26.5

53 Articles of concrete plaster and cement; cutting, shaping and finishing of stone; manufacture ... 26.6 to 26.8

54 Basic Iron and steel and of ferro-alloys; manufacture of tubes and other first processing of iron ... 27.1 to 27.3

55 Basic precious and non-ferrous metals 27.4

56 Casting of metals 27.5

57 Structural metal products 28.1

58 Tanks, reservoirs and containers of metal; central heating radiators and boilers; steam ... 28.2+28.3

59 Forging, pressing, stamping and roll forming of metal; powder metallurgy; treatment and ... 28.4+28.5

60 Cutlery, tools and general hardware 28.6 61 Other fabricated metal products 28.7 62 Machinery for the production and use of mechanical power; except aircraft, vehicle and cycle ... 29.1 63 Other general purpose machinery 29.2

64 Agricultural and forestry machinery 29.3

65 Machine tools 29.4

66 Other special purpose machinery 29.5 67 Weapons and ammunition 29.6 68 Domestic appliances not elsewhere classified 29.7

69 Office machinery and computers 30

70 Electric motors, generators and transformers; manufacture of electricity distribution and ... 31.1+31.2

71 Insulated wire and cable 31.3 72 Electrical equipment not elsewhere classified 31.4 to 31.6 73 Electronic valves and tubes and other electronic components 32.1 74 Television and radio transmitters and apparatus for line telephony and line telegraphy 32.2 75 Television and radio receivers, sound or video recording or reproducing apparatus and ... 32.3 76 Medical, precision and optical instruments, watches and clocks 33 77 Motor vehicles, trailers and semi-trailers 34 78 Building and repairing of ships and boats 35.1 79 Other transport equipment 35.2+35.4+35.5 80 Aircraft and spacecraft 35.3 81 Furniture 36.1

82 Jewellery and related articles; musical instruments 36.2+36.3 83 Sports goods, games and toys 36.4+36.5 84 Miscellaneous manufacturing not elsewhere classified; recycling 36.6+37 85 Production, transmission and distribution of electricity 40.1 Electricity, gas and

water supply 86 Gas; distribution of gaseous fuels through mains; steam and hot water supply 40.2+40.3


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87 Collection, purification and distribution of water 41 Construction 88 Construction 45

89 Sale, maintenance and repair of motor vehicles and motorcycles; retail sale of automotive fuel 50 90 Wholesale trade and commission trade, except of motor vehicles and motorcycles 51 91 Retail trade, except of motor vehicles and motorcycles; repair of personal and household goods 52

Wholesale and retail trade

92 Hotels and restaurants 55 93 Transport via railways 60.1 94 Other land transport; transport via pipelines 60.2+60.3 95 Water transport 61 96 Air transport 62 97 Supporting and auxiliary transport activities; activities of travel agencies 63 98 Post and courier activities 64.1

Transport and communication

99 Telecommunications 64.2 100 Financial intermediation, except insurance and pension funding 65 101 Insurance and pension funding, except compulsory social security 66 102 Activities auxiliary to financial intermediation 67

103 Real estate activities with own property; letting of own property, except dwellings 70.1+70.2(pt)

104 Letting of dwellings, including imputed rent 70.2(pt)

105 Real estate activities on a fee or contract basis 70.3 106 Renting of machinery and equipment without operator and of personal and household goods 71 107 Computer and related activities 72 108 Research and development 73 109 Legal activities 74.11 110 Accounting, book-keeping and auditing activities; tax consultancy 74.12 111 Market research and public opinion polling; business / management consultancy activities; ... 74.13 to 74.15 112 Architectural and engineering activities and related technical consultancy; technical testing and ... 74.2+74.3 113 Advertising 74.4

Financial Intermediation

114 Other business services 74.5 to 74.8 Public administration 115 Public administration and defence; compulsory social security 75

116 Education 80 117 Human health and veterinary activities 85.1+85.2

Education, health and social work

118 Social work activities 85.3

119 Sewage and refuse disposal, sanitation and similar activities 90

120 Activities of membership organisations not elsewhere classified 91 121 Recreational, cultural and sporting activities 92 122 Other Service Activities 93

Other services

123 Private households employing staff and undifferentiated production activities of households ... 95 to 97 Source: United Kingdom Input Output analysis, 2006 Edition, (ONS)


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The most up to date publication containing the UK SUTs is the UK Input-Output

Analyses 2006 Edition produced by the Office of National Statistics (ONS). This

publication contains SUTs for 2004. This is also the year the EU Working Group

on Sport and Economics has decided to use as the base year for the creation of

the national SSAs.

The UK Input-Output Analyses 2006 provides data for 123 industry/product groups.

Every industry is classified according to which product accounts for the greatest

part of its output. The type of business (i.e. type of product) related to each

industry is defined by the ONS Inter-Departmental Business Register (IDBR). The

I-O 123 industry/product classification is consistent with Standard Industrial

Classification (SIC) in the sense that each SIC sub-category relates to a single I-O

category (i.e. there are no overlaps). As mentioned above, this relationship is

presented in Table I. Furthermore, NACE and SIC are consistent with each other

in the sense that they are identical up to the 4 digit level.

The UK I-O tables are a cornucopia of information as they provide a wider

coverage of data for the whole of the UK economy than any other publication.

Unfortunately, however, they do not provide detailed data (i.e. only 123

industry/product categories). There are other ONS publications which can provide

information in further detail: the Annual Survey of Hours and Earnings (ASHE), UK

Trade in Goods, Product Sales and Trade, Consumer Trends, Family Spending,

and the Annual Business Inquiry (ABI). The first two and the ABI make use of the

Standard Industrial Classification (SIC), Consumer Trends and Family Spending

use the Classification of Individual Consumption by Purchase (COICOP) which is

inconsistent with any classification mentioned above. Lastly, Product Sales and


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Trade is based on the PRODucts of the European COMmunity (PRODCOM) which

is a very analytical classification consistent with the NACE or SIC.

Usually, these official sources do not contain sufficient data for estimating the

sport-related element of every economic activity. Research based on secondary

sources is also necessary.

This manual does not focus on secondary sources even though they are essential

for the estimation of the sport-related element of each economic category. The

reason is that generalised conclusions on them cannot be drawn, as they are too

many and very diverse in nature. In essence, this paper sets the basis for a

standard methodology on how collection of data should commence. Once official

sources have been utilised up to the highest possible classification level,

secondary sources for more detailed data should follow. Finally, the construction of

an SSA can begin once the data has been collected.

Most important aggregates

The most important aggregates for the construction of the SSA are the Gross

Value Added (GVA), employment cost, number of Jobs (average salary is derived

by the division of the last two), consumer spending, imports and exports.

Additional statistics such as public expenditure and gross capital formation are

also important but much smaller in magnitude. Profits and net taxes (taxes less

subsidies) are also essential, as their addition with employment cost equals GVA.

Table 2 summarises the aggregates for which the ONS publications provide data.


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Table 2: The main economic aggregates and the main official data sources

Statistics I-O table ABI Consumer Trends ASHE

UK trade in goods

Product sales and

trade Family

Spending

GVA √ √ Emp. Costs √ √ √ No of jobs √ √ Avg. Ann. Salary √ √ Profits √ Net taxes √ Cons. spending √ √ √ Imports √ √ √ Exports √ √ √

Nomenclature 123

Ind./Pr. Groups

SIC(03) COICOP SIC(03) SIC(03) (PRODCOM) COICOP

√ indicates that data for the particular variable exists Note: The 123 Industry Product Groups of the I-O tables are consistent with the SIC(03). SIC(03), PRODCOM and NACE are always consistent up to the 4th digit of classification.

6. Constructing a sport satellite account (SSA)

Figure 1 demonstrates the proposed steps that need to be followed. The starting

point is the identification of the sport-related element of every sport-related sector

of the economy. In other words, all the sport-related sectors have to be segregated

into two parts: sport and non-sport. In the Use table (as well as in the Supply table),

this is represented by both a row-wise and a column-wise expansion. Note that

since the industry/product groups related to the sports industry in the Combined

Supply and Use tables are 53 out of the total of 123, the corresponding expansion

will be 53 columns and 53 rows respectively (see Table 4). The 53 sport-related

groups can be seen in bold numbers in Table I.

The next stage is to the estimate the total and final consumption (note: total =

intermediate + final). The distribution of the intermediate consumption can be done

according to the technical coefficients of the relevant industry as they appear in the


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Combined Use Table of the I-O Accounts. For example, it is a reasonable

assumption that the technical coefficients in sports clothing are the same as in the

case of general clothing. Although this is an assumption, it simplifies the process

to a significant extent.

The SSA will present intermediate and final consumption in the Use Table using

purchasers' prices (as in the Combined Tables). This is convenient enough

because the collection of most data for the estimation of the sport element is

expressed in the same way.

Figure 1: Setting up of an SSA and its incorporation in the Analytical Tables framework

The methodology suggests that the intermediate imports (i.e. totals for every

industry) are expressed separately, outside the intermediate and final demand

2004 Combined Supply & Use Tables (SUT) (123 pr./ind. groups)

2004 Sport satellite account (SSA) (176 pr./ind. groups)

2004 Domestic Tables (138 pr./ind. groups)

Multipliers & Effects

Non-Sport Economy (123 pr./ind. groups)

Isolation of imports Coefficients accounting for imports, taxes less subsidies on products and Trade margins together

Sport Economy (60 pr./ind. groups)

Non-Sport Economy (138 pr./ind. groups)

SSA based on 2004 Analytical Tables (138 pr. groups)

Coefficient for every individual cell

Sport Economy (53 pr./ind. groups)


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matrices. This comes in contrast to the Combined Use table of 2004 included in

the United Kingdom Input-Output Analysis where this distinction does not occur. A

simple way by which imports can be isolated is to make use of the total imports

from the Supply table included in the United Kingdom Input-Output Analysis and

assume a similar distribution with intermediate and final demand matrices from the

1995 Import Use tables. By splitting the economy into sport and non-sport and

isolating imports in a different row, the format of the Combined Use Table will

correspond to the one in Table 3.


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Table 3: The Expanded Combined Use Table at purchasers' prices

Sectors Without Sports Sports-related Sectors

n = 123 m = 53

Sector 1 ... Sector n Sector 1 ... Sector m Final Demand

Sector 1

...

Sect

ors

with

out

Spor

ts

Sector n

Sector 1

...

Spor

ts-r

elat

ed

Sect

ors

Sector m

Inte

rmed

iate

Dem

and

Hou

seho

ld F

CE

Non

-Pro

fit In

stitu

tions

S

ervi

ng H

ouse

hold

s FC

E

Cen

tral G

over

nmen

t FC

E

Loca

l Gov

ernm

ent F

CE

Gro

ss F

ixed

Cap

ital F

orm

atio

n

Val

uabl

es

Cha

nges

in In

vent

orie

s

Exp

orts

of G

oods

and

ser

vice

s

T O

T A

L

D

E M

A N

D

Imports (Raw Materials)

Total Intermediate Consumption

Total Domestic Intermediate Consumption Taxes (less subsidies) on production

Compensation of employees Gross Value

Added Gross operating surplus

T O T A L O U T P U T Notes: 1. In the Use Table, Intermediate Demand/Consumption as well as Final Demand are expressed in purchasers' prices. 2. Intermediate imports (Raw materials) are expressed separately


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Once the 2004 SUTs have been constructed, updates can be produced by using

the RAS /TRAS methodology. This implies the update of the technical coefficients

of the intermediate consumption and production matrices based on new

aggregates such as total output, GVA and Final demand. It accounts for structural

and price changes affecting each sector. Information regarding the methodology

can be found in the United Nations Handbook of National Accounting: Input-Output

Table Compilation and Analysis.

The methodology also involves the construction of an SSA based on Analytical

Tables (ATs). The most important and difficult task again is the extraction of the

sport element out of the identified categories of the Input-Output Tables. However,

this task requires the existence of ATs for 2004. It is necessary to construct of

approximated ATs for 2004 based on the last ones published by the ONS which

refer to the year 1995.

The ATs are always constructed by applying modifications on the product-by-

industry Combined Supply and Use tables (SUTs). By modifying the SUTs, the

product-by-industry Domestic Supply and Use tables at basic prices can be

produced. This includes changes in the tables' structure to allow the transition from

purchasers' to basic prices. Additional changes on the tables can produce the ATs

at basic prices. These last changes refer to the expression of the tables in a

symmetric form (e.g. from product-by-Industry to product-by-product). The 1995

UK ATs as well as explanations related to their construction can be found in the

ONS publication: United Kingdom Input-Output Analytical Tables, 1995. The

publication has also extended the number of I-O industry/product groups from 123

to 138 in order to reflect the different input structures of the Government and Non-

Profit Institutions Serving Households non-market sectors from the market sectors.


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Moreover, the I-O groups of the 2004 SUT are constructed upon the SIC(03) while

the ones of the 1995 AT are based on the SIC(92). The two classifications do have

some small differences which may need to be taken into account.

The methodology for the transformation of the Domestic Table to a symmetric form

assumes that the supply table has no off-diagonal data. This is interpreted as

saying that there is a one-to-one relationship between products and industries. In

other words, every industry produces only one product (the principal product). The

methodology by which the off-diagonal production is re-allocated into the diagonal

by the ONS is based on a hybrid technology assumption that is a mixture of the

product technology and the industry technology assumptions.

The latest UK Domestic and Analytical tables refer to 1995. The structural

changes between the 1995 Combined and Domestic as well as the 1995 Domestic

and Analytical tables can be traced by identifying the individual coefficients that if

multiplied with the former's cells, provide the latter table. These coefficients can be

used on the 2004 Combined Use tables to approximate Domestic and Analytical

tables for the same year.

Using ATs extensive economic inference can be provided, as they allow the

construction of the Matrix of technical coefficients and the Leontief Inverse

matrices. These two matrices assist the derivation of multipliers and effects which

are useful tools in assessing the structure of the economy and in policy making. A

comprehensive analysis on the derivation and interpretation of multipliers and

effects are included in the ONS United Kingdom Input-Output Analytical Tables,

1995 and in the UN's Handbook of National Accounting - Input-Output Table

Compilation and Analysis.


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Since some of the data are not included because of ONS disclosure rules, it would

be impossible to construct Analytical Tables for 2004 on a similar way as the ONS.

Hence, the afore-mentioned changes of the SUTs of 2004 can be made by tracing

the proportional changes between the Domestic and ATs of 1995 as explained

above. In this case it is implicitly assumed that the structure of the UK's economy

has not changed between1995 and 2004.

Major structural changes in the economy do not take place over short periods of

time. This is the main reason why the ONS has agreed to produce ATs every 5

years. Hence, on one hand, the employment of 1995 data estimates may not

produce very accurate estimates for 2004, but on the other hand statistical

discrepancies are not expected to be very large in magnitude. Thus, the multipliers

derived from the 2004 estimates are expected to be fairly accurate.

7. Conclusions

This manual presents a comprehensive analysis of issues related to the

construction of a Sport Satellite Account. It sets out the framework for investigating

any section of the economy by highlighting the most important official sources and

the classifications used. Because it is necessary to discuss specific data sources

the paper has used the UK as a case-study.

The starting point for collecting data is the I-O tables. More detailed data can be

found in other publications; the most important of which are the ABI, Consumer

Trends and the UK Trade in Goods. The first step is the collection of official data

for every NACE category up to the highest possible digit. The estimation of the

sport-related fraction of these sub-categories comes next and needs to be based

on secondary sources which are numerous and diverse in nature.


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The final collected data can be incorporated in the existing I-O tables by

segregating all the sport-related sectors into two parts: sport and non-sport. This

would be represented by a row and column-wise expansion of the domestic supply

and intermediate demand matrices in the SUTs. For the creation of the SSA,

imports should be subtracted from the intermediate and final demand matrices and

presented in a separate row.

Additional alterations have to be made for macroeconomic inference to carry on.

These alterations refer to the transformation of the (industry by product) Combined

Use table at purchasers' prices to the (industry by product) Domestic Use table at

basic and finally the transformation of the latter to a Symmetric (product by product)

table at basic prices. At this point, secondary analysis based on multipliers and

effects for every sector can be obtained.


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ABBREVIATIONS

GDP Gross domestic Product

GVA Gross Value Added

SA Satellite Account

SSA Sport Satellite Account

ATs Analytical Tables

UN United Nations

IDBR Inter-Departmental Business Register

SUTs Supply and Use Tables

NACE Classification of Economic Activities in the European Community

ESA European system of Accounts

SNA United Nations' System of National and Regional Accounts

CPA Classification of Products by Economic Activity

I-O Input - Output

SIC Standard Industry Classification

ONS Office of National Statistics

ASHE Annual Survery of Hours and Earnings

ABI Annual Business Inquiry

COICOP Classification of Individual Consumption by Purpose

PRODCOM PRODucts of the European COMmunity

HHFCE Household Final Consumption Expenditure

VAT Value Added Tax

PAYE Pay As You Earn

HMRC Her Majesty Revenu and Customs


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Annex I Results for Austria, Cyprus, and the UK: 2004 A1 Introduction This Annex reports the results of the satellite account projects for three countries:

Austria, Cyprus and the UK for 2004, which was chosen as the base year for the

European project.

A2 Consumer Spending in Austria, Cyprus and the UK, in 2004 TABLE A1: SPORT RELATED CONSUMER SPENDING 2004.

Austria Cyprus

UK NACE

€m % C£(000s) % £m % codes Food/drinks 45.34 0.97 1661.71 0.95 239.00 1.01 15Textiles 52.81 1.13 476.48 0.27 433.96 1.84 17Wearing apparel 341.65 7.29 16477.97 9.40 2763.00 11.72 18Leather/footwear 71.00 1.51 16414.78 9.37 1371.00 5.82 19Publishing and printing 35.30 0.75 1937.98 1.11 876.00 3.72 22Coke, petroleum 107.81 2.30 871.83 0.50 246.00 1.04 23Pharmaceuticals 14.63 0.31 2887.61 1.65 157.80 0.67 24Various metal products 1.85 0.04 0.00 0.00 1.50 0.01 28Machinery/weapons 0.25 0.01 1543.55 0.88 15.00 0.06 29Optical instruments 14.13 0.30 24.67 0.01 22.80 0.10 33Motor vehicles 4.23 0.09 190.53 0.11 82.00 0.35 34Boats/Aircraft/Cycles 70.27 1.50 4384.54 2.50 1637.00 6.94 35Sport goods 675.18 14.40 3531.21 2.02 1677.00 7.11 36Maintenance of motor vehicles 47.18 1.01 0.00 0.00 0.00 0.00 50Hotels and restaurants 1762.19 37.58 873.39 0.50 2067.00 8.77 55Land transport 7.12 0.15 17.70 0.01 89.00 0.38 60Water transport 0.10 0.00 0.00 0.00 3.20 0.01 61Air transport 22.05 0.47 275.33 0.16 115.00 0.49 62Travel agencies 8.58 0.18 18.48 0.01 64.00 0.27 63Telecommunications 0.00 0.00 0.00 0.00 2335.00 9.91 64Insurance 45.43 0.97 2180.72 1.24 45.64 0.19 66Renting of Machinery and equipment 29.67 0.63 160.53 0.09 102.00 0.43 71Education 109.01 2.32 10021.78 5.72 173.00 0.73 80


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Health and vet services 202.80 4.32 3745.38 2.14 175.50 0.74 85Sporting activities 976.07 20.81 107525.82 61.37 8878.00 37.66 92-93other 45.00 0.96 0.00 0.00 2.00 0.01 TOTAL 4,690 175,222 23,571

Table A1 shows consumer spending in Austria, Cyprus and the UK in 2004. The

absolute size of consumer spending as reflected in the final line of the table is of

secondary importance as this reflects the size of the national economy. Hence

there, is nothing significant in the fact that the UK at £23.6bn is significantly

greater than both Austria and Cyprus. The important statistics for a meaningful

comparison appear in the percentage columns. This shows each element as a

percentage of its total. For example, the ‘Food/drinks’ category represents 0.97%

of total consumer spending on sport in Austria, and 1.01% in the UK. The last

column of the table, shows the NACE categories used to define each category. At

the end of the report we attach a table that shows the correspondence of the

NACE categories used with the codes of the Input Output publications in the UK.

The major categories in both UK and Cyprus economies are sporting and

recreational activities accounting for 38% and 61% of total sports spending

correspondingly. This includes elements such as: dance schools, spectator sports,

health and fitness, massage and sport betting. In the case of Austria, the most

important category is 'Hotel and restaurants', at 38% of the market. This reflects

the strong sports tourism element particularly from German tourists. This is an

element of the Austrian sports market which results from its own geography,

against which the UK can neither compete nor be compared. After 'Hotels and

restaurants', the next most important sector in Austria is sporting activities

accounting for 21% of the market. Some other sectors form an important

component of the sports market. Health and vet services are important in Austria

and Cyprus, accounting for 4% and 2% of the market respectively. Similarly sport

related education is a strong factor in both these countries accounting for 2% in

Austria and 6% in Cyprus. The commercialisation of television sport in the UK

(mainly through BSkyB) resulted in a very large share of sport-related spending at

10%. Note that this sector has not been recorded in the Austrian and Cyprus


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categories. 'Hotels and restaurants' is a large sport-related consumer sector in the

UK, at 9%, although much smaller in importance than in Austria. Spending on

sport goods is a strong sector in all countries, reaching 14%, 2% and 7% in Austria,

Cyprus and the UK correspondingly. Spending on 'Boats/Aircrafts/Cycles' and

sport-related publications is particularly strong in the UK, accounting for 7% and

4% of all spending respectively. This is not the case in Austria and Cyprus where

these categories are much smaller in importance. As expected, spending on

'Wearing apparel' is strong throughout, accounting for 7%, 10% and 12% in

Austria, Cyprus and the UK respectively. Finally spending on leather/footwear is

weak in Austria but very strong in Cyprus (10%) and the UK (6%).

TABLE A2: CONSUMER SPENDING ON SPORT ACTIVITIES, 2004

AU CY UK NACE

€m % C£(000s) % £m % codes Dancing schools 44.00 0.01 542.780 0.00 133.00 0.01 92.34Swimming pools and stadiums 812.74 0.17 69,160.799 0.39 4456.00 0.19 92.61/2Sport betting 11.88 0.00 18,158.650 0.10 3318.00 0.14 92.71Massage and fitness centres 43.37 0.01 5,888.364 0.03 871.00 0.04 93

Table A2 above shows some detailed sports activities that can be derived

consistently from the satellite accounts of Austria, Cyprus and the UK. It is

immediately apparent that in Austria the sports betting market is extremely small,

while in Cyprus and the UK it accounts for 10% and 14% of total sport spending.

The category 'Swimming pools and stadiums' includes health and fitness and

spectator sports. This is extremely important in Cyprus (39%) followed by the UK

(19%) and Austria (17%). Spending on 'Massage and fitness centres' is highest in

the UK accounting for 4% of total spending. The least significant category

examined in spending terms is 'Dancing schools' accounting for only 1% in both

Austria and the UK.


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A3 Gross Value Added in Austria, Cyprus and the UK, in 2004 Table A3 presents the results we could extract from the three satellite accounts

regarding final output. This is represented as gross value added in the case of

Austria and the UK, but as gross output in the case of Cyprus. Although a total

figure of gross value added is available for Cyprus, a detailed breakdown was not

possible. Hence, although the monetary values represent different concepts, the

percentage distributions should

TABLE A3 SPORT RELATED OUTPUT, 2004

AU CY UK NACE €m % C£(000s) % £m % Agriculture 3.58 0.04 816.44 0.31 392.00 1.61 1Food/drinks 14.18 0.17 2577.27 0.97 94.00 0.39 15Textiles 17.99 0.21 224.75 0.08 114.00 0.47 17Wearing apparel 19.43 0.23 4779.68 1.81 112.00 0.46 18Leather/footwear 8.09 0.10 2013.08 0.76 9.00 0.04 19Publishing and printing 32.58 0.38 3901.84 1.48 369.00 1.52 22Coke, petroleum 13.40 0.16 3304.95 1.25 39.00 0.16 23Pharmaceuticals 12.67 0.15 3702.23 1.40 42.00 0.17 24Rubber products 0.40 0.00 425.97 0.16 3.00 0.01 25Various metal products 12.63 0.15 228.72 0.09 2.00 0.01 28Machinery/weapons 0.72 0.01 1351.84 0.51 20.50 0.08 29Optical instruments 16.88 0.20 15.94 0.01 33.50 0.14 33Motor vehicles 3.28 0.04 85.87 0.03 39.00 0.16 34Boats/Aircraft 72.29 0.85 3083.86 1.17 621.90 2.55 35Sport goods 231.48 2.73 1279.89 0.48 214.40 0.88 36Construction 131.52 1.55 11534.89 4.36 152.50 0.63 45Maintenance of motor vehicles 61.52 0.73 816.69 0.31 55.70 0.23 50Wholesale 303.33 3.58 4408.00 1.67 334.20 1.37 51Retail 539.49 6.36 10723.97 4.06 668.40 2.75 52Hotels and restaurants 4254.53 50.20 4560.96 1.72 488.80 2.01 55Land transport 16.30 0.19 949.13 0.36 114.90 0.47 60Water transport 0.18 0.00 0.00 0.00 1.80 0.01 61Air transport 16.87 0.20 1391.01 0.53 55.40 0.23 62Travel agencies 8.26 0.10 605.62 0.23 626.70 2.57 63Telecommunications 0.00 0.00 1812.03 0.69 2136.00 8.78 64Financial intermediation 32.54 0.38 1138.01 0.43 442.00 1.82 65Insurance 32.44 0.38 3556.25 1.34 32.60 0.13 66Renting of Machinery /equipment 73.10 0.86 339.59 0.13 97.20 0.40 71


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Research and development 1.57 0.02 0.00 0.00 26.80 0.11 73Advertising, business activities 20.22 0.24 6537.11 2.47 907.20 3.73 74Administration 83.46 0.98 761.14 0.29 30.00 0.12 75Education 982.64 11.59 32607.14 12.33 1088.00 4.47 80Health and vet services 583.85 6.89 6253.55 2.37 58.00 0.24 85Sporting activities 874.15 10.31 131097.87 49.58 14845.00 60.99 92-3other 0.43 0.01 17522.73 6.63 74.10 0.30 TOTAL 8,476 264,408 24,341

be indicative of the structure of sport in each country.

The structure of consumer spending is similar to some extent in the case of output

but with some interesting variations. As before, the most important sectors in

Austria and the UK are hotels/restaurants, and sporting activities respectively.

However, their shares of sport output have increased dramatically to 50% in the

case of Austria and 61% in the case of the UK compared to the equivalent

spending categories. The most likely explanation is that these sectors are

extremely profitable because of international trade and or/intermediate demand,

hence their GVA share is inflated way above the consumption shares. In the case

of Cyprus, the share of sporting activities out of total sport output is at 50%. Note

that wearing apparel, although very important in terms of consumer spending, it is

not a major category in terms of output. Austria has a very high level of GVA in

the cases of sporting activities and health/vet services accounting for 10% and 7%

correspondingly. Sport-related education is very important in Austria and Cyprus

reaching 12% in both countries, while in the UK it is at a lesser level of 4%. The

UK produces relatively more value added in 'Telecommunications' (9%) and

'Advertising,business activities' (4%), while Austria Cyprus had a strong presence

in the construction industry accounting for 4% of total sport-related output.

A4 Importance of sport in Austria, Cyprus and the UK, in 2004

Table A4 below illustrates the importance of sport in Austria, Cyprus, and the UK

in terms of Gross Value Added and consumer spending. The monetary values are

in national currencies.


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TABLE A4: IMPORTANCE OF SPORT, 2004

Austria Cyprus UK

€m, % C£m,% £m,% Sport-related GVA 8,476 181.01 24,341 as % of total GVA 4.0% 2.4% 2.3% Sport-related consumer spending 4,690 175.22 23,571 as % of total spending 3.6% 3.7% 3.2%

Looking at consumer spending, there is not much difference in the importance of

sport in the three countries. The percentage of sports-related consumer spending

in Austria, Cyprus and the UK is 3.6%, 3.7% and 3.2% respectively. However,

looking at the importance of sport in terms of GVA two changes take place. Firstly,

the percentage share of Austria becomes considerably larger at 4%. This is

attributed to the unusually high value of international sport tourism in the country.

Secondly, the UK and Cyprus are closer together at 2.3% and 2.4% respectively.

The figures for employment appear in Table A5 below.

TABLE A5: EMPLOYMENT IN SPORT, 2004

Austria Cyprus UK

€m, % C£m,% £m,% Employment in sport 219,000 7,600 592,400

% of total employment 5.8% 2.2% 2.7%

The much higher level of sport-related employment in Austria is due to the very

high level of sport-related tourism there, in particular the skiing industry. Since

tourism is a labour intensive industry, sport-related employment is a higher

percentage of the total than the percentage of GVA that is sport-related.


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