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Broad economic categories
Classification and coding process

Classification criteria

Commodities are generally allocated to the categories of the New Zealand Broad Economic Category (NZBEC) according to their main end–use. Subject to this limitation, an objective of the NZBEC is to provide categories which can be aligned with the basic classes of the System of National Accounts (SNA): capital goods, intermediate goods and consumer goods.

Classification

The standard classification of broad economic categories is a hierarchical classification of five levels. Level 1 of the classification has seven categories, level 2 has 15 categories, level 3 has 44 categories, level 4 has 90 categories and level 5 of the classification has 74 categories.

You can download the full classification from the 'Available files' section of this page.

Coding Process

In general, when allocating commodities to the NZBEC classification, commodities that have been classified as primary are those that are characteristically products of primary sectors of the economy, that is, farming, forestry, fishing, hunting and the extractive industries. Commodities that are characteristically products of other sectors (such as manufacturing, where the product underwent a minor change), are classified as primary in cases where nearly all the value of the product is contributed by one of the primary sectors of the economy.

If a commodity is not defined as primary, it is classified as processed.

The main or usual end-use of many of the food items in NZBEC category 1 (food and beverages) is for household consumption, while many other food items belong to the intermediate goods class in the SNA. In order to facilitate analysis in terms of the three SNA classes, category 11 (primary food and beverages) and category 12 (processed food and beverages), have been subdivided to provide for commodities mainly for industry and mainly for household consumption. This situation, however, is made complex by dual-use (that is, in some instances food items may be used for industry, and in other instances for household consumption).

In category 11, majority of items are capable of dual-use and the only practicable way of making the dissection between the SNA classes in this category is on a conventional basis. For example, the convention is adopted that when traded internationally, food-grains are normally for household consumption. In category 12, the majority of items can be allocated between the SNA classes with greater certainty, but a conventional element is nevertheless involved in the case of several commodities.

A separate category (category 321) which is not allocated to a specific SNA class has been established in the NZBEC for motor spirit. This is because this commodity is important in terms of trade and is commonly used both by industry and by consumers.

Capital goods (except transport equipment) and parts and accessories (category 4) are divided into two sub-categories which classify commodities according to whether their main end-use is as capital goods or as intermediate goods. In this category, machinery (such as electrical generators and computers), and other manufactured goods (such as medical furniture), are used by industry, government and non-profit private institutions. They are in fact, producers' goods that are defined in the SNA as part of fixed capital formation.

Parts and accessories essential to the maintenance of machinery and unassembled components of machinery used as supplies to assembling plants are inputs to industry and are considered intermediate goods.

Unassembled vehicles (SITC group 781, 782 and 783.1) which input into assembling plants and should be allocated to NZBEC category 53 are actually classified together with the corresponding assembled vehicles in categories 51 and 52, because assembled and unassembled vehicles are classified within the same SITC group.

Transport equipment and parts and accessories thereof (category 4) covers finished ships, road vehicles, whether motorised or not, aircraft, railway and tramway rolling stock plus their parts and other accessories.

In the SNA, the finished commodities are classified as capital goods or as (durable) consumer goods, while parts and accessories are treated as intermediate goods. Most of the transport equipment traded internationally is classified as capital goods, and is therefore treated in the NZBEC as industrial. However, several items such as motorcycles and bicycles are normally used by consumers and are therefore classified as non-industrial transport equipment. A problem occurs with passenger motor cars, which are important in international trade but are commonly used either as capital goods or as durable consumer goods. To overcome this problem a separate category (category 51), which is not allocated to a specific SNA class has been established in the NZBEC.

Durable consumer goods are defined as a) commodities with an expected life-time of more than one year and a relatively high value (such as refrigerators and washing machines), and b) commodities with a useful life of three years or more.

Semi-durable consumer goods are those which have an expected life-time use of more than one year but less than three years and are not relatively high value.

Non-durable consumer goods are those with an expected life-time of a year or less.

Military equipment, including arms and ammunition, is generally classified in category 7 as goods not elsewhere specified.

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