In 2009, annual gross domestic product (GDP) for durable goods manufacturing showed a double-digit decline. The industry was the leading annual contributor to the bottoming out of the U.S. economy for that year. But looking at the results through a new experimental quarterly data series reveals a more nuanced and complete picture of what was happening in durable goods manufacturing. It shows that the decline in 2009 largely came from big drops in the fourth quarter of 2008 and the first quarter of 2009. After that durable goods actually increased for seven straight quarters.
This is an example of how BEA’s experimental quarterly GDP by industry statistics can provide a more detailed and precise view of how various industries are contributing to overall economic activity in the country, particularly around turning points. The recent recession and recovery illustrated the need for data that track how industries respond quarter to quarter, rather than year to year, to recessions and to various stimulus programs and other factors during a recovery.
While annual statistics on GDP by industry can be used to describe the leading contributors to business cycle dynamics over a full recession and recovery period, they are less useful in providing a picture of the dynamic U.S. economy as it is evolving. Annual data aren’t sufficient when trying to fully analyze the response of industries to changes in economic conditions and public policy, and they aren’t sufficient for gauging the economic impact and effectiveness of specific programs.
Quarterly data are not only important for improving our long-term understanding of the national economy, but also for more quickly assessing, monitoring, and adjusting decisions as the economy evolves. These statistics supplement other timely quarterly data—such as employment, wages and salaries, consumer spending, business investment, industrial production, and price statistics—allowing for a more complete analysis of business cycle dynamics and the sources of U.S. economic growth. Quarterly GDP by industry statistics also enhance the existing quarterly national income and product accounts statistics by providing a comprehensive accounting of consumer spending, investment, international trade, and industry performance on a quarterly basis.
BEA’s recently issued prototype of quarterly GDP by industry statistics updated an earlier prototype of estimates for 2007–2009 to include data for 2010–2011. It also presented quarterly estimates for gross output (that is, sales) for the first time. Adding a comprehensive set of statistics on quarterly gross output provides analysts with important information on industry-level performance. For example, coming out of the recession in 2009, GDP for the manufacturing sector grew even faster than total output for the manufacturing industry. That was a sign that productivity at factories had increased over the same period. Gross output also provides an industry breakdown of total sales, regardless of whether or not these sales are part of that industry’s contribution to GDP.
BEA plans to release one more set of prototype quarterly estimates as part of its annual revision of the industry accounts and to begin regularly producing quarterly GDP by industry statistics in 2014. Quarterly GDP by industry statistics would be available within 30 days of BEA’s third release of quarterly GDP. The quarterly data will provide industry by industry detail. As the quality of these statistics improves, BEA plans to expand the industry detail from the current 22 industries to the 65 industries now shown in the published annual statistics.
While progress continues on developing the quarterly GDP by industry statistics, more work remains before they are ready for regular production. In the meantime, BEA welcomes comments on the proposal. They can be emailed to [email protected]. You can address comments to Carol Moylan, Associate Director for Industry Economic Accounts.