Gross domestic product (or value added) by industry and gross output by industry are both published as part of BEA's outdoor recreation satellite account, and both sets of statistics provide important insights into an industry’s contribution to the overall economy.

Gross output is principally a measure of sales or revenue from production for most industries, although it is measured as sales or revenue less cost of goods sold for margin industries like retail and wholesale trade. Intermediate inputs are the foreign and domestically-produced goods and services used up by an industry in the process of producing its gross output. Value added is the difference between gross output and intermediate inputs and represents the value of labor and capital used in producing gross output. The sum of value added across all industries is equal to gross domestic product for the economy. Value added is also measured as the sum of an industry’s compensation of employees, taxes on production and imports, less subsidies, and gross operating surplus.

A simplified example illustrates how these different concepts are related. A manufacturer buys fiberglass, rubber, and aluminum to produce kayaks. The manufacturer uses energy to operate the facility and equipment used to mold and assemble the kayak hull and deck. The manufacturer employs one person to transport the finished kayaks to customers. In this case, the kayak manufacturer’s gross output is the revenue earned from kayak sales. Intermediate inputs are the costs of operating the facility and the materials the manufacturer uses up in the production of kayaks. Value added equals the difference between the gross output and the cost of intermediate inputs. The manufacturer pays a portion of its value added as compensation to its employee, remits taxes to operate the business to the local government, and retains the remainder as profit.

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