I am trying to understand what's the difference between intermediate consumption and intermediate demand. The context is the European System of Accounts, which says that intermediate demand is the same as intermediate consumption for the total economy, but not whithin sectors. I think the difference may be related to trade margins or transport, but I can't find it. Thank you so much


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Intermediate consumption

total intermediate consumption is the difference between gross output (sales or receipts, which can include sales to final users in the economy or sales to other industries (intermediate inputs) and Value added GDP (total market value of all final goods and services produced).

This difference would be called intermediate inputs which are goods and services that are used in the production process of other goods and services and are not sold as final goods.

They are consumed or used up as inputs in production process by businesses, they are typically subcategorized as raw materials, energy, and purchased business services (which include various other operating expenses).

Intermediate demand

intermediate demand which is called Intrasector transactions or Intrasectoral transactions. I will go with the name intrasectoral transactions (they all mean the same thing). It is the value of production sold to other industries( i.e. NAICS 481, 482 ) within the same sector (NAICS 48).

To avoid double counting with the economic measurement within a sector intrasectoral transactions(the value of certain inputs produced within the same industry/sector) are removed.

The sectoral measures remain the only estimate that is useful at both the detailed industry level and the aggregate sector economy level.

When measuring the total economy one would use intermediate input in order to construct gross output but when you are measuring sector level data and you are using the same intermediate inputs that are produced by industries within the same sector then those values need to be removed in order to prevent double counting.


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