BEA and the Bureau of Labor Statistics have updated and expanded their joint data set showing sources of growth or decline in industries and how those sources affect the U.S. economy overall. New detail was added about the contributions of information technology and other types of capital assets.
The U.S. integrated industry-level production account was updated in March with new estimates for 2019 and updated estimates for 1987-2018. This data set presents a bottom-up picture of the sources of economic growth that can be used to study structural changes in the U.S. economy, globalization, the impact of new technologies, and the origins of productivity growth.
The account integrates data from BEA and BLS to show the contributions of capital, labor, and productivity to industries’ outputs and gross domestic product. This is sometimes called "KLEMS" data, for the broad categories of inputs used by industries (K=capital, L=labor, E=energy, M=materials, and S=purchased services).
From 1987 through 2019, growth in value added, or gross domestic product, for the total economy averaged 2.44 percent per year. The data show that half of that growth, 1.22 percentage points, can be attributed to growth in capital inputs; 0.77 percentage point can be attributed to growth in labor inputs; and the remaining 0.45 percentage point is attributed to multifactor productivity. Multifactor productivity, or MFP, is change in productivity beyond the change in measured inputs, for example, gains that might come from more efficient technology or better management.
This year’s update of the account includes experimental data that expand the number of capital asset groups from five to nine. The information technology group was split into communications equipment and computer hardware. The “other” assets group was divided into instruments and other office equipment; transportation equipment; other equipment; and structures, land, and inventories. The remaining groups are research and development, software, and entertainment originals.
The new detail on capital inputs is useful for understanding growth across industries. For example, during 1987-2019, the largest contribution of IT capital assets to gross output growth was in the broadcasting and telecommunications industry, accounting for 1.45 percentage points out of the industry’s average annual growth of 4.55 percent. The newly available detail shows that 1.23 percentage points of the contribution from IT are explained by communications equipment, while 0.22 percentage point is explained by computer hardware.
Furthermore, comparing the period 1987-2000 to the period 2000-2019, the new detail shows an acceleration in the average contribution from communications equipment and a corresponding deceleration in the average contribution from computer hardware, a shift in composition that would not be apparent without the new detail.
The full data files are available on the integrated industry-level production account page of bea.gov. Highlights and more information about the data will be published in an upcoming issue of the Survey of Current Business.