Archive for the 'Industry' Category

Industry in Focus: How Health Care and Social Assistance Fared in Third Quarter

Health care is an industry that many of us experience firsthand, whether receiving treatment for an illness or injury or simply getting an annual check-up. In the third quarter of 2015, health care and social assistance was the second-leading contributor to the 2 percent increase in the U.S. economy’s growth, providing 0.38 percentage point to real GDP.

Of particular interest: health care and social assistance accelerated from July through September, after decelerating for three consecutive quarters. (We describe an industry as accelerating when its growth in the current quarter is faster than its growth in the previous quarter. Conversely, we describe an industry as decelerating when its growth in the current quarter is slower than its growth in the previous quarter.)

We learn even more about what is happening inside the health care sector when we dig down into the underlying detail tables that we introduced last quarter.

Health care and social assistance consists of four underlying industries—ambulatory health care services, hospitals, nursing and residential care facilities, and social assistance. A glance at the contributions of the underlying industries reveals that three of the four industries had actually been declining for two quarters.

However, growth in ambulatory health care services (which includes outpatient-services providers such as physicians, dentists, or optometrists) had hidden those declines. In the third quarter those three industries stopped declining and started growing again, which explains why health care and social assistance as a whole both grew and accelerated during the period.

Combining all of these observations from just a handful of tables allows one to paint a rich picture of what’s actually going on in the economy. What started as a relatively straightforward story—“health care grew in the third quarter”—becomes far more interesting when we begin to look at how that growth changed from previous quarters and how different parts of the industry fared.

Widespread Industry Growth Drives Upturn in GDP in Second Quarter

Widespread industry growth drove the U.S. economy’s second-quarter rebound, with 19 of the 22 industry groups tracked contributing 6.7 percentage points to real Gross Domestic Product. Finance, insurance, real estate, rental and leasing; manufacturing; and agriculture, forestry, fishing and hunting led the way.

Real GDP increased 4.6 percent in the second quarter, after decreasing 2.1 percent in the first quarter.

Real Value Added by Industry

Real value added —a measure of an industry’s contribution to GDP—for finance, insurance, real estate, rental, and leasing increased 2.7 percent in the second quarter, after decreasing 4.1 percent in the first

quarter. The upturn was primarily concentrated in the finance and insurance sector, which includes banking, brokerage and other types of financial services.  Real gross output for the finance and insurance sector – a measure of an industry’s sales or receipts adjusted for inflation – increased 2.7 percent in the second quarter, after increasing 2.3 percent.

Real value added for the manufacturing sector also turned up, increasing 6.8 percent, after decreasing 1.3 percent in the first quarter. Durable-goods manufacturing, which includes motor vehicle manufacturing and computer and electronic product manufacturing, led the overall upturn in manufacturing, increasing 8 percent in the second quarter, after decreasing 4.5 percent.  Similarly, real gross output for durable-goods manufacturing increased 7.3 percent, after decreasing 2.7 percent in the first quarter.

Real value added for the agriculture, forestry, fishing and hunting sector increased 14.2 percent.  The sector’s real gross output also rebounded in the second quarter, increasing 6.3 percent, after falling 19.9 percent.

Quarterly GDP by industry statistics, including value added, gross output, and intermediate inputs, can be accessed in BEA’s Interactive Data Application at www.bea.gov/itable/.

New Statistics Will Provide More Timely Snapshot of How Industries are Performing

Want to know how much manufacturing contributed to U.S. economic growth in a given quarter? How about educational services?

For the first time, the Bureau of Economic Analysis (BEA) will soon start producing on a regular basis quarterly estimates of economic activity generated by 22 industries.

The first quarterly gross domestic product (GDP) by industry report will be released April 25 and will provide information on how these industries fared in the fourth quarter of 2013 as well as how they performed in previous quarters back to the first quarter of 2005. The report will also provide annual statistics for 2013. Previously, BEA published GDP by industry statistics only on an annual basis, so businesses and policymakers had a much longer wait for such information.

The new quarterly statistics will provide a different look at quarterly economic growth.  For instance, on February 28, BEA reported that the U.S. economy grew at a 2.4 percent pace in the fourth quarter of 2013. While that GDP report provides a lot of crucial information, the new quarterly GDP by industry report will shed light on whether most industries contributed to the nation’s economic growth or whether just a handful of industries accounted for most of it.

The new quarterly statistics also will serve as a better barometer for potential turning points in the U.S. economy and give businesses and policymakers a better understanding of the strengths and weaknesses of the overall economy. For instance, in 2005—during the run up to the great recession—the U.S. economy grew 3.4 percent. Finance, insurance, real estate, rental, and leasing accounted for 1.3 percentage points of that growth—more than a third. Providing regular, timely updates on how economic growth is distributed across the industries can help policymakers and business leaders identify potential trouble spots in the economy.

BEA officials will discuss these new GDP by industry statistics at a data user conference March 11 at BEA.

These new estimates are just one way that BEA is innovating to better measure the 21st Century economy. This year, BEA also will introduce real (inflation-adjusted) estimates of personal income for states and metropolitan areas, along with prototype estimates of quarterly GDP by state and annual consumer spending by state. Providing businesses and individuals with new data tools like these is a priority of the Commerce Department’s “Open for Business Agenda.”


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