Inter-industry trading data
Input Output Data
The trading data used in Arium's Trade Analysis Tool are input output data designed to show how all the industries of an economy interact.
First compiled by Wassily Leontief in the early 20th Century, the intent of input output data is to measure the direct and indirect effects of changes in economic activity throughout the economy. Leontief's work won the Nobel Prize for Economics in 1973.
The information, usually displayed in a matrix, has the inputs to each industry entered in a column and its outputs or sales in a row. Even when presented in summary form, this format shows the relative dependencies of each industry on all others in the economy, both as customer of their outputs and as supplier of their inputs.
Input Output Matrix
| Outputs | Agriculture | Industry | Services | Final Demand | Total Outputs |
|---|---|---|---|---|---|
| Inputs | |||||
| Agriculture | 100 | 150 | 0 | 50 | 300 |
| Industry | 50 | 2000 | 1000 | 2600 | 5650 |
| Services | 50 | 1500 | 4000 | 7950 | 13500 |
| Value added | 100 | 2000 | 8500 | 0 | 10600 | Total Inputs | 300 | 2650 | 13500 | 10600 | 30050 |
Data Source
To maximise its relevance, the data used in Arium's Trade Analysis Tool are the most detailed publicly available. They come from the US input output benchmark data.
The benchmark data are produced by the US Bureau of Economic Analysis in full detail every five years, with annual high-level updates. Definition of the industries comes from the North American Industry Classification System (NAICS). The benchmark data, therefore, measure trade between an industry (defined by a NAICS code) and industries in every other NAICS code.
The intensely detailed nature of these data means that the trading relationships shown correspond much more closely to the contracts agreed and transactions made in the market than do normal sector studies. They give a more accurate picture of the diversity and connectedness between industries than is possible when using higher-level sector data.
US data are the best currently available globally for Arium's Trade Analysis Tool, not just because the US leads or has strong representation in many industries, but also because, when analysed in this detailed way, the structure of trade patterns is relatively stable over time and relatively comparable across countries.
Use In Trade Analysis Tool
The US benchmark input-output data are published as a matrix of 350,000 elements. Although the data are tremendously useful, the interface does not make it easy to follow the flow of trade through several industries.
Arium's Trade Analysis Tool allows the user to see the relationships as a network, showing how risks, prosperity and financial dependency propagate between industries and companies. In a network this appears much more vividly than would be possible in the original matrix. Arium has also made a major extension to the scope of the published tables by 70 per cent. Thus the Arium data not only shows links between the suppliers and users of products, but traces transactions through the different sectors of wholesaling and retailing that act as intermediaries.
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