Intermediate Expenditure

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
European System of Accounts
(ESA).
Conceptually, the aggregate
"intermediate consumption" is
equal to the amount of the
difference between Gross Output
(roughly, the total sales value)
and Net output (gross value
added or GDP). In the US
economy, total intermediate
consumption represents about
45% of Gross Output. The
services component in
intermediate consumption has
grown strongly in the US, from
about 30% in the 1980s to more
than 40% today.
Thus, intermediate consumption
is an accounting flow which
consists of the total monetary
value of goods and services
consumed or used up as inputs
in production by enterprises,
including raw materials, services
and various other operating
expenses.
Because this value must be
subtracted from Gross Output to
arrive at GDP, how it is exactly
defined and estimated will
importantly affect the size of the
GDP estimate.
Intermediate goods or services
used in production can be either
changed in form (e.g. bulk
sugar) or completely used up
(e.g. electric power).
Intermediate consumption
(unlike fixed assets) is not
normally classified in national
accounts by type of good or
service, because the accounts will
show net output by sector of
activity. However, sometimes
more detail is available in
sectoral accounts of income &
outlay (e.g. manufacturing), and
from input-output tables
showing the value of transactions
between economic sectors